Cloud-based client accounting and small and medium accounting practices: Adoption and impact

Abstract

Cloud accounting represents a major disruptive technology for the accounting industry. This qualitative study used semi-structured interviews to collect data from eight small and medium accounting practices (SMPs) to test a preliminary model of the determinants and impact of cloud-based client accounting adoption by SMPs. Accordingly, the SMP was the unit of analysis. The complex triadic relationship between SMPs, their clients and cloud accounting provider necessitated an interorganisational perspective. Four factors contributed to SMPs’ adoption decisions: perceived benefits of cloud-based client accounting, perceived benefits of partner programs, organisational readiness (IT sophistication and client readiness), and external pressure (client and competitive pressures). Subsequent to adoption, SMPs experienced a decline in the levels of traditional (statutory) services provided. However, most noted increases in income from business advisory. All firms were at least as well off after adoption. Improvements in client relationships and the perceived value of accountants’ services were also noted. An adoption/impact typology predicted and found positive impacts for cloud initiators, in particular. The findings have implications for owners of SMPs, their SME clients, and for accounting professional bodies.