As Mobile and Cloud accounting become more popular for small businesses, we connected with Eileen O’Loughlin, Mobile Accounting Analyst for the online technology consultancy, Software Advice. Insights from her latest report highlight behavioral trends in the industry.
Following are excerpts from our discussion with Eileen O’Loughlin, Mobile Accounting Analyst for the online technology reviews firm Software Advice.
VP: What are the key differences between Mobile and Cloud accounting?
EO: Cloud accounting refers to the use of cloud-based accounting software, e.g., licensed, standalone business accounting software. Users have access to the full range of that product’s software capabilities using any compatible device with an internet connection. However, not every cloud-based system is designed for a mobile device interface, which can result in display issues that negatively impact the user experience.
To combat this issue and increase ease of access, some vendors will build a mobile application, which is specifically designed for a mobile device interface. Users download these native mobile apps from iTunes or Google Play and can perform many of the same accounting functions on their mobile device as they can when accessing their business accounting software from a mobile device. This is mobile accounting.
VP: What are the common uses of Mobile Accounting Apps?
EO: In our recent analysis of mobile accounting trends, we found that the most common uses of mobile accounting apps include:
- Time tracking and monitoring billable hours
- Performing bank reconciliations
- Expense management (i.e., adding receipts and submitting expenses for approval)
- Invoicing (e.g., creating and sending invoices for goods or services)
VP: Which age groups are most comfortable with mobile accounting?
EO: We found that users age 26 to 35 are most comfortable using mobile accounting apps. In fact, not only are they more likely to use a mobile application, but they use it more often than other age groups: 37 percent say they use their mobile application at least a few times per week, compared to about 20 percent of users in both the 18 to 25 and 36 to 45 age groups.
VP: What is the expected impact of mobile accounting on the industry?
EO: Despite relatively low numbers of current mobile accounting users (just 38 percent of respondents say their vendor offers a mobile app), the majority of survey respondents say that a mobile application would impact their decision to purchase one product over another in a future investment. This speaks to users’ desire for ease of access on one of the most prominent devices we have available to us as consumers. Vendors should pay attention and improve their mobile app offering, or take steps to redesign their cloud-based product to be used on a mobile interface. Over time, I expect “mobile accounting” will become synonymous with “cloud accounting,” but we are not at that point yet.
VP: Have you noticed any significant YoY trends for 2015 and 2016?
EO: Financial reporting remains the top-requested accounting software capability YoY between 2015 and 2016. Reports, such as the balance sheet, profit and loss and cash flow statement, act as a snapshot of a business’s current financial standing. Tracking this data over time provides decision makers with valuable insight into trends that affect their profitability.
VP: Why and/or how, in general, do SMBs benefit from using accounting software (of any kind)?
EO: Accounting software can have a huge impact on the organization and profitability of a business. Manual methods, including using Excel spreadsheets to keep track of finances, are time consuming and error prone. Using software to automate regular tasks can help reduce this margin for error.
The financial reports that come standard in most accounting software provide a wealth of information about trends in a company’s financial data that can impact business goals, such as department efficiency and assumed vs. actual profitability of different ventures.
Ultimately, these tools will provide business owners a better understanding of their costs and expenditures, allowing them to make more informed purchase and investment decisions.
Report images courtesy of Software Advice.