By Russell Gammon, below, Chief Solutions Officer, Tax Systems
As a traditionally risk-averse sector, the tax industry can often be hesitant to embrace new technology; a great example of this is cloud-based applications. Despite rapid adoption amongst other industries over the last decade, many tax professionals still had a clear preference for desktop-based tax applications as little as two years ago. However, as the popularity of Software-as-a-Service (SaaS) models continues to grow, the benefits on offer have simply become too good to pass up. The result is that more and more organisations are embracing cloud-based tax technology, and vendors are responding accordingly. Today, there are more options than ever for tax teams to choose from, all of which are designed to simplify challenges and optimise productivity in the ever-changing tax ecosystem.
Technology suited to the modern business environment
So, what are the benefits of migrating to the cloud? One of the biggest is the ability to use convenient subscription models that only charge people for what they use, rather than having to pay large sums up front for software that isn’t immediately (and may never be) utilised. Cloud solutions also offer superior levels of security, performance and service compared to on-premises alternatives, making them much better suited to the modern business environment. In fact, the benefits have become so compelling that the value of the SaaS market has jumped from approximately $197 billion in 2023 to an estimated $247 billion in 2024, as more organisations continue to make the switch.
Looking specifically at the role of the cloud for tax professionals, a number of key trends within the industry are further accelerating its adoption. For example, tax is steadily becoming digital-first, with HMRC’s Making Tax Digital (MTD) initiative being just one of numerous high-profile examples. Within this context, cloud-based solutions make a lot of sense, not least because they give tax professionals fast, convenient access to all the information they need, backed by powerful tools and applications that help them maximise their productivity on a day-to-day basis.
Enabling a more nuanced approach to tax operations
The rise of cloud-based solutions in the tax industry is also part of a wider shift in the way businesses and tax professionals are choosing to conduct their tax affairs. In the past, most would either keep everything in-house or outsource entirely to a third-party expert – there was very little in-between. However, cloud technology is finally enabling businesses to take a more nuanced co-sourcing approach, allowing them to undertake certain parts of a task internally, whilst outsourcing other parts. Rather than “all or nothing”, processes can be split and undertaken by internal or external team members, depending on preference.
When all these factors are taken into consideration, cloud-based solutions have become much more compelling to many organisations than they were in the past. This is particularly true for those with workforces spread out over a large or multiple geographical areas, because they also eliminate the need to manually install, maintain, and roll out new software patches and updates like traditional desktop solutions do. Instead, all updates can be done centrally, giving employees instant access to them, regardless of where they are located.
Embracing cloud services can also help organisations achieve sustainability objectives – something that’s becoming increasingly important to both customers and governments around the world. This is because cloud platforms not only deliver much better environmental performance than traditional on-premise solutions, but they also allow businesses to dispense with much of their outdated, energy-hungry infrastructure in the process.
Successful migration is a collaborative process
The prospect of migrating to a cloud-based solution can often seem daunting for those without prior experience, but when done correctly it can be achieved both quickly and painlessly. However, doing so requires a concerted, collaborative effort from a variety of key stakeholders. First and foremost, it needs full buy-in from senior executives, as well as the users themselves.
Next, it requires the right level of support for all users, ranging from members of the IT team, to all the employees who will be expected to use it on a daily basis. Most leading cloud-based solutions have a wide range of training resources built into them, making it much easier to perform.
Finding a suitable technology partner is a key part of the process. The right partner can help streamline the migration process from day-one, significantly reducing the impact on overall operational efficiency during this period. Conversely, unsuitable partners can have the opposite effect.
Data integrity is another major consideration when moving to the cloud and must remain top of mind throughout the transfer process. Organisations should put safeguards in place to ensure data remains consistent whenever it is in transit and there’s no opportunity for it to get lost, damaged or stolen. It goes without saying that the ramifications of such eventualities can be extremely serious.
The tax industry may not be at the leading edge of new technology adoption, but a growing number of organisations have started to embrace the cloud for the plethora of business benefits it has to offer. For tax professionals this means much greater day-to-day efficiency, with more time spent on productive activities and less time spent on mundane, time-consuming tasks. This is only the beginning too. With further game changing technologies such as AI and automation also becoming more widespread, those willing to embrace change will be the ones who gain the most in the months and years to come.
