I read some really interesting comments on AccountingWeb about why paperless is always associated with the cloud when they are two different things. My resulting comment got so lengthy, I decided to turn it into a blog instead taking up four pages of space in the comments section.

So here’s the premise of the discussion. Thanks to Robert Lopez for kicking off the topic.

“Why is paperless always associated with cloud? Paperless is one thing and cloud is another. Paperless is about office culture, interactive software, expert systems, data bases, e- learning and e-supervision. Cloud is about just one thing – hosting your stuff on a remote server. People talk about cloud as if its a big deal. The big deal is going paperless and that can be done without cloud.”

“…I still hold the view that “cloud” is not the central issue. How an application is built (open source code, language, platform etc) is interesting but different code can be used to create the same interface. I do not know the numbers but suspect a great deal of office administration, accounting etc is done on local servers. There are reasons for this. Local servers are faster than cloud. Local servers are more reliable than cloud – the former can function with intranet only, the later needs both inter and intranet. A lot of businesses do not need ongoing active online file sharing. The level and need for file sharing is low and so can be achieved with VPN logins etc. Updating software on local servers is mainly automated and very easy these days. A lot of software applications are not multi-user and do not want to be (think say Adobe Acrobat). There is more but my final point is we are totally paperless and we do this without using cloud at all. The reason for this is not that we do not get it, or have not thought about it, but because we just don’t see the advantage of putting some of our apps on a remote server. 99% of the work was getting staff to accept, live with and grow to like the culture of paperless – cloud is just not that big an issue.”

And here is my response.

That’s an interesting perspective. Our business environment is completely cloud-based, and I think maybe you are confusing the concept of working in a cloud environment with working in a hosted server environment.

“Local servers are faster than cloud.” I completely remember those days, particularly because it wasn’t very long ago… maybe five years ago or less. In fact, even sharing Excel files in a cloud tool (similar to a local server and now, I’d argue, just as fast) became really frustrating, and we would download, make changes locally, and upload again. It was really annoying. But then our company switched to Google Docs for file sharing, and our lives were totally changed. I didn’t even really realize how much we shared documents or how much we needed to collaborate until we had the proper tool for the job. There is nothing like being able to hop on the same document and make changes at the same time while having a web conference about the document. It’s better than being in the same room and definitely better than using a local server.

“A lot of businesses do not need ongoing active online file sharing.” I’ve found that not only do we need (and now use) this more internally, now that we’ve gotten a taste of it, we’re finding a need (or desire) to use this externally with our clients more as well. When you say there’s not a need for file sharing, I would argue that people simply aren’t aware of the need because they have never had it before. It’s like saying that someone who has never tried chocolate doesn’t crave chocolate so they must not like it. We literally have to share everything to run effectively… documents (Google Docs), calendars (Google Apps/Gmail), file cabinets (SmartVault), accounting software (Xero), passwords lists (LastPass), task lists (Asana), and on and on. I can’t think of a single tool we *don’t* need to share, and most of them are shared not only internally but with clients as well.

“A lot of software applications are not multi-user and do not want to be (think say Adobe Acrobat).” True, but Adobe Acrobat and others are moving into the “apps” and subscription world at an incredibly fast pace, and that’s not an accident. The world is going mobile, and local servers can’t compete with that. People want to be able to see their documents on their tablet. They want to be able to collaborate without being tied to a local server. They want to be able to quickly pull up a browser to see financial data or cookie recipes or when their child’s next ballet recital is. It’s less about multi-user and more about connectivity. Connection to what, when, and where it’s important to them, not just when they have their laptop and can VPN into a local server.

I’ll wrap it up by saying that I agree with your original premise… paperless and cloud are completely separate concepts. Paperless is one thing, and cloud is another. But more than that, it’s a gradual evolution from one to the other. I began moving to paperless before the cloud became the cloud. It was about 2005, and I was scanning everything in that I possibly could. It was painfully slow and a colossal pain, but I kept with it. In 2007 to 2008, the big question in tax firms wanting to go paperless was whether to scan documents at the beginning of the process or at the end after all the workpapers had been built. By about 2009 or 2010, I got my Fujitsu scanner that scanned at top speed, and it rocked my world. No piece of paper was safe from feverishly scanning hands. And at about the same time (as software tools caught up with demand), the answer was that you could scan at the beginning and become truly paperless. But that was just the beginning.

Now we’re reaching the next big step of the journey… the cloud. By using cloud services, we can now run our office from anywhere. All our employees work from home. We have clients in different countries. If one tool goes down (which is extremely rare), we can keep working in other tools. We can customize the solutions we bring to clients. We can look at documents on our phones. And we don’t have the burden or cost of investing in a private server that we have to maintain and support. We are scalable up and down with marginal usage costs vs. a giant outlay of cash.

But probably the biggest advantage to the cloud is how all of our favorite tools are now collaborating to connect to each other. I look at something like Hubdoc which is a rockstar app which connects to our customers’ banks to download statements we would otherwise need to log into and download one by one ourselves. And then they will download a bill from Comcast and push it into Xero with the document already attached so it’s queued up and ready for our client’s approval as soon as it’s ready to go. Or look at TSheets. Employees log in and enter hours which are sent to ZenPayroll for payroll processing, and then a bill is sent to Xero. When payment is automatically pulled into Xero from the client’s bank, we apply that directly against the awaiting bill in Xero. Boom. Done. Talk about power and monumental jumps in collaborative workflow and functionality. You just can’t get this on a local server. Literally. Because they’re building it exclusively for the cloud.

If you thought that becoming paperless was a big deal, just wait until you embrace the cloud. It’ll rock your socks off.

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