How the cloud transforms workflow and processes...
... from onboarding, to accounting and tax, and beyond
The problem: Accountancy firms struggle to drive a fluid flow of information around their organisation. This can become worse when team members and clients want information on the go. Their technology is often unlinked, and processes can be both manual and inconsistent.
The solution: Cloud-based workflow solutions are able to communicate, share, approve and signoff on information/documents and more – all in a paperless environment. This could be from client onboarding; to managing their compliance needs; through to analyzing client information to provide more valuable, forward-looking, services.
These tools provide accountants:
Ease of access
They don’t require accountants to be in a specific location or environment, and information can be available on any device – mobile or desktop.
No upfront or high overheads
With the cloud there is no pricey, one-time or high overhead cost. It’s a ‘pay as you go’ model.
Low monthly access fees
You can access the appropriate resources for your need at an appropriate monthly fee. You’re not spending excess money on superfluous accessories and applications.
Cloud tools are ‘responsive’ to a practice’s needs
This model allows for constant upkeep and improvement. Moving away from a hosted solution means that clients can expect good service and improving product features.
The outcome
As you look to transform your accounting practice, look for an affordable, flexible and scaleable digital transformation tool.
One Paper Lane is helping accounting firms of all sizes digitise workflow and automate their client work, with little coding required and deployed rapidly. Data and real-time analytics can then be accessed to improve business performance.
Who we are and what we do
We are One Paper Lane, the digital process automation and collaboration platform of the future. We are launching in the UK at Accountex on stand 490.
Our technology will enable you to streamline, automate and improve your processes. It can work together with your existing software, apps and tech tools.
We have already helped accountancy and other professional services firms increase productivity and improve both the client and team member experiences.
Visit us and our UK partner, practice advisers Foulger Underwood, at Accountex. Alternatively, for more details, contact Julia Whistler at [email protected]
Preparing for your first submission in an MTD world
The 1st of April has come and gone but the transition to Making Tax Digital for VAT filing is far from over. The true impact of the change will be felt at the first VAT return submission. What should be top of mind for you is keeping digital records, reviewing your VAT clients and assessing your current processes to ensure they are fully compliant.
While it may seem overwhelming at first, start with these simple considerations as you prepare for your first submission.
How are you submitting VAT returns today?
Firstly, consider how you submit VAT returns today. Are you submitting on behalf of your client using a bookkeeping product, or using a spreadsheet to come to the nine figures only to manually type them into HMRC’s online service? Do your clients prefer to submit their own VAT returns using a bookkeeping product or HMRC’s online service? The final question should be, are these processes compliant and if so, do you want to maintain them?
How will you maintain digital records?
The next fundamental step should be to start maintaining digital records to ensure the first VAT return submission is compliant. The good news is that spreadsheets remain acceptable for digitally capturing data. For some, this might be the logical first step to digitalisation. Providing you use API-enabled or bridging software to make the final submission, you have the freedom to keep spreadsheets with valuable historic data and calculations in the process.
How do your clients currently submit their VAT returns?
Finally, in preparation for the first submission, whether you submit monthly or quarterly, you should be completing your final reviews on all your VAT clients to establish:
• Do they want to complete and file the VAT return themselves?
• Do they want your practice to prepare and file on their behalf?
• Do they want your practice to validate and file the return after they prepare the data?
Once you have agreed on how to proceed for each of your clients, the next step is reviewing the system you use today and even setting up a new system for monitoring your deadlines. This will ensure that you know when all the different activities are due and are alerted to filing deadlines ahead of time.
How do you currently monitor your VAT returns?
Research shows that most practices have been using spreadsheets to monitor returns, which tend to list out the key milestones and deadlines. One solution that practices are looking at is being able to set up an automated workflow within their tax and accounting software which incorporates the alert data, the activities and when they need to be completed.
The key question to ask yourself would be, is the process you have efficient and compliant? If the answer to either question is no, join us, Wolters Kluwer, at stand 1060 at Accountex on 1 and 2 May to find out how you can achieve both.
Are traditional accounting firms dead?
What is the future of the accounting industry?
We won’t recognise traditional accounting firms in 10 years because of the merging of humans and technology that will have taken place. Like most innovations, the changes will occur first at the Big 4 and the larger regionals, but it will eventually trickle down to medium and small local firms. It’s not a question of if, but when.
The rise of the machine
Two current buzzwords for accountants are artificial intelligence and data analytics. Today, most of us are familiar with these terms but are not so certain as to how they will affect our practices in the long term. Tomorrow, they will be as familiar to us as debits and credits.
Artificial Intelligence (AI)
AI is well known to most of us as being the theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.
For us, at its most simple level, this means a businesses’ bookkeeping system automatically allocates transactions, receipts and payments to the right part of the profit and loss account or balance sheet without the need for human involvement.
Data Analytics
This is the term used to describe the process of inspecting, cleansing and analysing data with a goal of discovering useful information such as trends, patterns and fluctuations, to suggest conclusions and support future decision making.
Data analysis has multiple facets and approaches depending on which domain it is used in. For the accountant here are three examples of what it means:
- Auditors will test entire populations of data rather than sampling, and in a fraction of the time;
- HMRC could send a bill or refund to a proportion of tax payers without the need for a tax return to be filed; and
- Businesses could know the result of a decision before they have committed to it (“What if” scenarios).
The first scenario already exists, see any of the Big 4 websites.
Data analytics is not just the domain of the Big 4, other providers have entered the market to help auditors and accountants interrogate, verify and review business data.
How will these changes affect staffing levels and the way we currently organise our firms?
For several decades now, one of the biggest issues traditional firms faced was finding and training staff. Can anyone remember when this was not the case?
If we look at the rise in the Cloud Accounting providers (for example, Intuit, Sage and Xero) driving changes in the way businesses use technology to record and process transactions and their subsequent development of practice management systems to enable firms to manage and produce accounts and tax returns, then the staff issue will eventually go away. Processing transactions on behalf of a business will become an error checking function, figures for the final accounts and tax returns will be automatically extracted.
As technology advances staffing levels for processing will reduce but not eliminate the need for staff. Someone will need to train business owners on how to use and input data, somebody will need to check the data for errors and there will always be a need for skilled people to exercise professional judgement when preparing final accounts and tax returns.
Analysing data for planning and reporting on audits will again require human professional judgement, machines might be able to provide the figures but they cannot factor in external influences.
The Big 4 are already investing heavily in the new technology. One fear is that the cost to acquire this new technology will further widen the gap between the way the large and smaller firms operate and thus further segment the market.
The rise in Cloud Accounting software has increased the number of book keeping practices (now approximately a third of the UK market for Accountancy services, by number of firms) and will continue will drive these changes.
We cannot see smaller firms being able to afford to train “traditional” Chartered and Certified accountants, this will be the domain of the larger firms, unless the Institutes and Association reorganise their qualifications into specialist (such as Audit, Tax, Advisory, Cloud) modules and qualify individuals on what functions they can and cannot be authorised to advise and perform. The Financial Conduct Authority already does this for their advisers and a similar model appears inevitable with the changes occurring in our industry.
Firms have traditionally organised their business model on leverage or a triangle, with partners at the top of the triangle and new recruits at the foot. These recruits used to come from University and into the profession. We hear firms report that entry level recruits are not prepared for the Cloud environment and the new technologies that are out pacing University curriculums.
Some firms we work with have adopted a new model of recruiting younger or A- Level students and training them immediately in Cloud software and then allocating them to “client facing” (training and support) or “error checking” client entries role. Once experienced, training on business advisory skills follows.
The firm of the future will not be a triangle but more of a diamond with some administrators, trainers, error checkers, specialists (tax, wealth management, finance, audit) and general business advisers.
Firms will offer a wider variety of services and use outsourcers or third parties to provide them.
So what do these advances in technology mean for traditional accountants and what should you be doing to protect your firm’s income and take advantage of the changing landscape?
What you just read is so “different” that it will likely cause the conservative and sceptical in our profession to either deny the reality of these changes or adopt the view that like all changes in our profession it won’t affect them.
“We’ll wait until it gets to us”.
“We survived “RTI” and what can be worse than that!”
“All these things are for the Big 4.”
“It will be decades before it trickles down to our firm and by then, the partners will be retired.”
Our biggest fear at 2020 is “denial” by traditional partners.
But…. If you have read this far, your biggest opportunity is to accept the industry is changing and take advantage of the fact that some firms won’t change and thus won’t survive, technology is your friend and you if you can embrace the changes you will succeed!
So how do we maximise opportunities in this changing digital industry?
First, look inwards at your practice, your partners and staff.
It seems Perpetual change is the only thing we can predict. Sense how you, your partners and staff feel about this. Do you see it as a negative? Are you willing to be brave and experiment? Understand this and then you can better how to embrace change in an opportunistic way.
Ask yourself what business you are truly in, are you bookkeepers tax return and accounts preparers or are you advisers to business owners. What do your clients value, the past or their future?
Model other innovative practices, some have already embraced the new technologies and are making the most of the changing landscape. Learn how they do it. Modelling parts of their approach means you can gain advantage without having to reinvent anything.
Look beyond the tech, work out what digital technology actually gives you –for example, Cloud accounting software can give you real time accounting data! Tech needs to achieve something powerful for it to matter, otherwise it does not have any real purpose. What can we use this data for and how can we make a difference to our client’s businesses and their lives?
Be productively paranoid and retain a sense of curiosity about what could potentially disrupt your practice. Start by investigating what you may have discounted as being threatening, then identify what might be harmful to your practice and integrate your thinking into an ongoing strategy.
Second, write down a Strategic vision of what your practice would look like when you have embraced these changes. For example, in 2 years, turnover, overhead, profit, staff roles, type of clients, services offered, management information required.
Third, write an action plan to bridge your practice from where it is now to where you want to be.
Monitor the changes monthly and ask the question “What have we done this month to move our practice towards our strategic vision?”
2020 Innovation Training provide the resources to help you make the changes and to optimise your opportunities. Talk to us about how we can help your practice.
Find out what 2020 has to offer and the benefits of membership
21 practical networking tips for accountants
Networking is a great skill to have, whether it’s for winning new business at Accountex … or for life in general.
But it’s a talent that, for many, doesn’t come naturally. Fear not.
“Your network is who you know. Your reputation is who knows you,” says Rob Brown, business development expert.
“I’m often asked what one skill, quality or talent, if mastered, makes everything else easier. The answer is NETWORKING,” adds Rob.
Rob has created 21 practical networking tips to help you get the most from the massive and potentially overwhelming phenomenon that is Accountex. It will help you to...
- Get on the radars of the right people and have the right conversations
- Prep properly for maximum impact and efficiency while you're there
- Make the very best of your precious time and efforts for maximum ROI.
Check out the tips HERE.
Getting serious about an advisory role for accountants
There is a lot of stuff and nonsense talked about advisory.
I’ve been an advisory partner in a top 10 firm and a 100% new business director in a regional practice plus I’ve worked in big corporate world for a large leisure company and been FD of an SME M and E contractor.
I currently run F3C Advantage and we work with accountancy practices that want to get serious about Advisory - by providing them an Advisory delivery platform called CAS – the Complete Advisory Solution.
So, I reckon I’ve got a pretty good fix on what clients want from accountants plus a pretty a good fix on what accountants feel about Advisory and why to date so many dabble rather than get serious.
OK, let’s get into our helicopters and rise up, look at the big picture, make sure we can see the whole forest and not just a few trees.
Now looking down from our helicopter, let’s keep it simple, what is advisory? The best explanation I have found of advisory is helping clients to:
- Move forward
- Protect and improve their personal positions
- Protect and develop their businesses
And when we accountants help clients we are “facilitating INSIGHTS to INSPIRE clients to INNOVATE and make changes”.
It’s all about the clients.
It starts by helping clients clarify what is most important to them. As we know clients are not all the same and they want different things. Never assume clients are clear about what is important to them.
When we help clients clarify what’s important to them this enables us to fully understand their personal and business goals and aspirations. Not only is this essential to ensure we are providing best advice but it’s one of the three things that all client surveys over the last 30 years or more have identified that clients want from their accountants
- To show they care and are in it for the long haul
- To bring new ideas
- To understand me and my business
The Success Gap Model is an excellent way of illustrating what is important to a client or prospect. Some measures of success will be financial – the pound note – others will be non-financial – the smiley face. Do you know all the pound notes and smiley faces for all your best clients?
How can we help clients achieve their pound notes and smiley faces?
Every time you look a client square between the eyes think – what’s the plan, their plan? Have they got a clear plan? Does it go beyond just numbers?
Being the person who has helped the client put their plans together is a powerful position to be. Being in the room when the decisions are being made establishes you as their MOST trusted adviser. You want to be more than just someone who helps them with implementation or solves ad hoc problems.
An annual planning event with your best clients is a great place to be and is core to Advisory.
In today’s fast-moving world not everyone wants to take a day out, so be flexible, break it down into bite size chunks. Two hour sessions are probably optimal going up to maybe half a day. The client experience is everything – when they leave you they should be thinking, “that was great and I want more”, not “that was great but I’m exhausted”! Regular client Advisory meetings with the reference point being the client plan that you helped them put together is also core to Advisory – and will result in new recurring income streams plus project spin off work.
So how do we get serious about Advisory?
Well I was the 100% new business director in a regional practice that tripled in size in two years and I have seen other firms achieve great results. How? The answer is – organise and structure advisory just as you have probably already organised and structured everything else in your business – with systems and process.
We know that good process provides
- Leverage and scale
- Consistency and quality control
- Accelerated learning and development
Most firms whether they are large or small have written or unwritten processes for how they deal with accounts and audit work or tax work. Let’s call them standard operating processes or SOP’s. Few have SOP’s for Advisory work. The successful firms have SOP’s for Advisory.
Accepting that most firms seek to be better at the WIN
W - Winning new clients
I - Increasing client spend
N - Nurturing client relationships for retention
Then successful firms develop standard operating processes
W – SOP to differentiate to attract new clients
I – SOP to broaden the services the clients buy
N – SOP to protect and develop client relationships
If you want to get serious then systems and processes are essential as is the development of SOP’s. You could create your own process in your head or you could look to bring in a proven process from outside – make sure it is client centric and can be deployed in a way that fits you and firm’s priorities.
So how does this work in practice?
I was talking with a small firm before Christmas with two partners. Partner number one has started as the champion but the plan is to involve a new director who joins them after Easter thus creating a pod – the champion model becomes a pod model. The long-term plan is build the advisory revenues and integrate advisory across the whole firm but in the short term it is champion to pod.
The firm in question reckon the have 200 or so business clients and they have segmented and targeted the top 20%. Post year end or pre year end meetings are being held with each of these clients over the next 12 months using one of the CAS tools specifically designed for such meetings. The plan is to migrate a proportion of these clients from being primarily compliance to being compliance advisory. Forty client meetings piggy backing off existing meetings over 12 months they believe is very manageable.
Supplementing this will be a process for handling prospect meetings. The plan is to attract compliance advisory clients and advisory only clients. And then migrate some of the advisory only clients to become compliance advisory clients.
Draw yourself three columns. Left hand column is your C clients. The middle column is your CA clients and the righthand column your A clients.
This firm is serious, it is organised, it’s deploying process in a way that suits them and they are making their life easier by using a delivery platform.
John will be speaking at Accountex on 2 May in the Business and Finance theatre at 11am.
Putting the client at the heart of your practice
What it means
Putting the client first, or as some may put it, ‘at the heart of your practice’, means you are focusing on their needs. Building your practice this way means it will best serve their interests and be responsive to their needs.
Why is putting the client at the heart of your practice important?
Clients want to engage with accounting firms that not just understand their needs but are able to proactively help them support their business goals. Today’s business environment is competitive and requires organisations to always plan ahead. Coupled with this, are the increasingly complex regulatory requirements that clients have to adhere to when doing business.
Maintaining a good client relationship also helps build trust, which eventually leads to long-term client loyalty and healthy business growth for them and your practice.
How do you achieve it?
Maintaining an interactive and personalised environment is key to ensuring a great client experience. Digital technology is rapidly transforming client experience and reshaping the way a practice is managed, as well as how they interact with clients.
Clients, for their part, are becoming increasingly savvy in leveraging digital technology in their day-to-day lives – be it via the numerous apps they use on their smartphones through to interacting with others using social media.
Digital technology enables clients and firms to easily share information, enabling the accountant to be responsive to a client’s needs and bringing in the flexibility and proactiveness that clients leverage in their own businesses.
But only focusing on digitising the way firms interact with clients would fail to achieve much, without also reviewing and digitising practices’ back office. By introducing digital workflow technology in its operations, a firm is able to not only improve its employee experience and be more productive, but also sustain its goal of putting the client at the heart of its practice.
One Paper Lane is helping accounting firms of all sizes digitise workflow and automate their practice areas and client management work – one process at a time. You get more than cutting-edge technology with One Paper Lane, plus our willingness to work alongside firms, help them review and map processes and bring in custom solutions as needed.
Who we are and what we do
We are One Paper Lane, the digital process automation and collaboration platform of the future. We are launching in the UK at Accountex on stand 490.
Our technology will enable you to streamline, automate and improve your processes. It can work together with your existing software, apps and tech tools. Our specialists also help you implement these improvements.
We have already helped accountancy and other professional services firms increase productivity and improve both the client and team member experiences.
Visit us and our UK partner, practice advisers Foulger Underwood, at Accountex. Alternatively, for more details, contact Julia Whistler at [email protected]
Is there a ‘best time’ to change accounting software?
Wondering when is the best time to change accounting software? Perhaps you’ve started your own accountancy practice, business is good and your client numbers look positive for the year ahead.
Maybe you’re using software which performs the basic functions, but have begun to realise its limitations as your clients become more complex.
Whether you’ve laid down the groundwork and researched various solutions, or are just in the early stages of considering a change – how do you know when the best time is to switch?
- When it syncs with your business growth plan
If you’re feeling a bit vague about this concept, then it is time to map out some key objectives and timescales in a detailed business growth plan. Even a sole practitioner should align any investment in software with forecasts for projected growth. Perhaps you are not yet ready for the switch and would benefit by waiting until it fits better with your business growth plan.
- When your current software holds you back
Perhaps you’ve used particular software in a previous role at a different firm, and know that certain tasks can be automated, taking up less of your valuable time. According to a recent Thomson Reuters survey of 345 UK accountants, 59% believe they will spend less time on personal tax compliance tasks over the next 10 years. A sure sign that you’ve outgrown your current software is when you’re spending more time in excel than your dedicated solution! It is sensible to select software with sufficient functionality and scalability which also has knowledgeable and UK-based training and support staff.
- When the time of year permits
Few in this industry experience a definitive lull in workload at a certain time of year, but many accountants looking to change accounting software choose to do so at year-end. This is because it presents a clean break before starting reports for the new year. However, this may not be for everyone because staff may be engaged with all the usual year-end tasks. Making the switch when you have the bandwidth to give it your full attention is advised – getting your data ‘fit’ for migration is a project which is worth doing beforehand to save yourself time later down the line.
- When you can get a good deal
Who doesn’t love a good bargain? We certainly do, which is why we have a great deal for on our efficiency packs for new users. Be sure to do your research for the best long-term deal and watch out for high price hikes year-on-year which tie you in.
- When you have had enough of your current provider!
Whether you have had enough of poor customer service, extortionate price hikes and/or your account manager seems to always be on holiday, then today is the day to start looking for an alternative. If you’re tired of using several non-integrated providers, start looking for a more efficient solution for your growing practice.
Speak to us
If you think the time is ripe to make the switch, find a software provider you can trust who can convert your client data with minimal disruption to your business. Learn from accountants who have changed their accounting software successfully and have benefited from industry-leading local support.
How to define your practice’s client strategy
To deliver an articulate, cohesive service offering, practice owners need to define who they want to serve and who they don’t.
Without doing so, practices risk being left behind – as others set a direction of travel and leverage the latest technology to achieve their goals.
So, what does the process of defining client/service offering look like?
Well, the starting point is to understand what your current client base looks like – and this is usually easier said than done. Think carefully about where you hold information, how to access it and then present it in a way that is transparent - and comparable.
You must then take stock of your current offerings, and contextualise in relation to the clients, including:
- What services are being offered; and to which sector? Which are most profitable?
- What is the menu-driven pricing for those services?
- Are there opportunities to develop additional services for this client?
- Which clients are difficult?
- What technical expertise is required to service your clients?
- Have you found ‘hidden’ sector specialisms?
- Which clients are price-sensitive?
This will lead you to a point where you understand your client base – certainly by sector and/or other types of segmentation (profitability/service provided). And now, you can take a more structured approach going forward – which may even include becoming much more niche, by vertical sector or by offering.
There are then further steps to take.
Marketing, for example, must be broached. If you’re looking to push your payroll services, you may look to automate as much of the payroll process as possible – including a centralised technical/clerical team - to free up managers for business development.
If you are to expand certain offerings then outsourcing may create flexibility in pricing and scale. There are also other big issues to face, such as dropping clients that don’t fit the profile of your developing practice.
You also need to set a strategy for the practice as a whole - which will mean a deep understanding of your staff and partners ambitions, skillsets, and future direction. That’s a conversation for another day…
If your practice is facing up to these issues ->
We’d be delighted to speak to you about client strategy, and other areas of focus for your practice. Come see us on stand 490 at Accountex on 1-2 May. If you’d like to speak to us beforehand, please email Julia Whistler at [email protected].
Foulger Underwood are a team of M&A and strategy consultants focused on the accounting, legal, trust and corporate service and wealth management sectors.
How to keep up with audit technology
Audit technology is a hot topic and continues to change the way firms work. But how’s an audit firm to keep up? Here we look at major audit tech trends and cover what firms need to know.
- Artificial Intelligence
When it comes to AI, anyone could be forgiven for dismissing it as a buzzword. Whilst this tech is in its infancy, it’s already relevant.
A great example of AI being useful in audit is the IRIS Ai Auditor, based on software developed by MindBridge, that applies machine learning and other AI techniques to help auditors identify data anomalies and risky transactions within a company’s financial data. This is currently being used at several large UK accountancy firms.
For smaller firms, you’ll be able to leverage the learnings from the current trials of this cutting-edge technology. The activities at large companies are acting as a sandbox for the future of this tech. By keeping your ear to the turf, you can act on these innovations at the right time, rolling out projects that have been tested on your behalf.
- Data Analytics
There is overlap with AI here, as a lot of AI tools enhance data analytics. This tech consists of tools that quickly extract, validate and analyse large volumes of data. The tools are applied to complete populations, i.e., 100 percent of transactions, and they can be used to support judgements, draw conclusions or provide direction for further investigation.
Data visualisation is another useful part of analytics. This is simply a way to present data that makes it easier to analyse it, bring it to life and help people understand the significance of the findings. Improved data-visualisation interfaces means that data analytics can be used by non-specialists.
- Distributed Ledger Technology/Blockchain
Are distributed ledger technology (DLT) and blockchain the same thing? Not exactly. DLT is built on some of the ideas and philosophies of blockchain. In fact, a blockchain is a type of DLT.
A DLT is a database of records that is not stored or confirmed by any one central body. What makes it different to blockchain is that the implementator has greater control over it, which makes it a more feasible project in the short term. Many idealists, however, see it as a step towards blockchain and a fully decentralised world. Any data which is stored in this way is encrypted and distributed across a network of different servers.
A great example of this tech in action comes from a pilot at Ernst and Young. The EY Blockchain Analyzer helps EY audit teams gather an organisation’s entire transaction data from multiple blockchain ledgers. Auditors can then interrogate the data and perform analysis of transactions, reconciling and identifying transaction outliers. The technology has been designed to support testing of multiple Cryptocurrencies and several other crypto-assets managed or traded by exchanges or asset management firms.
What can you do today?
You may think, “Why should I care about this? I can live with how my firm operates now.” Perhaps the most important reason is that your competitors care. You can't afford to lose clients to firms that use tech to provide a superior customer experience. But you don’t have to do everything at once. Look for small wins. Changing your mentality and developing a digital philosophy for your firm is a big first step.
Confirmation will be at Accountex to help get you started. Please visit us at Stand 865!
Accounting looks to a digital future
The entire business world is going digital and accountancy is no different, driven by advances in technology and constant changes in regulation.
The role of an accountant, once perceived as a number cruncher, has already evolved to encompass new skills, with even more of a focus on technology and relationship management.
To further explore the pace and impact of technological change over the next decade, in June of this year, Thomson Reuters commissioned research into the views of senior-level accountants in practice. Most of the 345 respondents work for an accountancy practice with fewer than ten staff and just over three quarters hold a senior level role within the firm.
In addition, Thomson Reuters also invited a range of experts to share their views on the findings for their Accountant of Tomorrow report. The report explores accountants’ needs, wants and visions for the future.
The findings
Over 95 per cent of accountants surveyed stated that their role was likely to change due to technology. Some 74 per cent of these understand this change to be very likely; displaying an acceptance that technology will indeed continue to play a pivotal role in the future of accountancy.
Stephen Pell, founder of Pell Artists Accountants and one of the selected experts, sees technology as a positive for the profession. He said: “Technology is going to make life much more enjoyable and rewarding for an accountant, only bringing benefits to them as an adviser, and to their clients.”
However, many are concerned about the challenges that come with the digitisation of accounting over the next 10 years. A significant 25 per cent of participants were concerned about the digitisation of the tax authority, in particular Making Tax Digital, the government’s recent digital tax system. Some 16 per cent were extremely concerned about choosing the right software, while almost half (47 per cent ) were somewhat concerned with their software choices, giving the impression that digital tax is still a grey area for accountants.
Within the report, Thomson Reuters commented that with the significant progress in the next 10 years to move clients and practices online, cloud technology would be the most significant driver of change in the role of being an accountant. The report went on to comment that, in the same way as the anticipated requirements for Making Tax Digital, one of the consequences of cloud accounting would be the use of real-time data and more in-depth analytics.
Reflecting this, when asked which three specific advancements in technology would change their role in the next ten years, 67 per cent of accountants cited cloud-based systems, while 52 per cent highlighted the use of real-time data and more in-depth analytics. Also featured on the list of advancements were greater integration between the applications we use and artificial intelligence (AI), or machine learning.
But how will this digital influx directly impact services, and will digital free up accountants’ time – or will it impede day-to-day tasks?
When asked if participants’ time spent on standard tasks would be more, less or stay the same, most agreed that compliance exercises would see a very considerable reduction in the time required per task. Bookkeeping was viewed as the task that would most benefit accountants through digital technology. Personal tax and company tax were tasks considered to be eased the most following digital changes, whereas accounts preparation and VAT review and submission, albeit slightly less, were also deemed to be those that could be ‘digitalised’ in order to free up accountants’ time.
Automation is key
Since the introduction of digital processes, many have fought with the emergence of technology – and have been arguing that ‘robots will take our jobs’. Instead of feeling threatened by automation, it should be embraced as a means to spend time on more challenging (and chargeable) work. As Freddie Faure, co-founder at CooperFaure Accountants, argues: “Machines can only do so much, but they can’t think and they can’t interpret information. You would still need an accountant to do the critical assessments and understand how you can use that information to help the business in the future.”
When asked which critical accountancy tasks are most likely to become automated by technology in the next ten years, bookkeeping came out top, with 78 per cent of those asked agreeing that it was the most likely. Other common choices for tasks most likely to become automated were data collection and tax return submission/filing. On the other hand, those tasks deemed least likely were client communication, business plan creation and auditing.
Each of these findings lead us to deduce that the introduction of digital software will not hinder an accountant’s workload, but will instead allow more time for advisory tasks, planning, business development and nurture of the client/accountant relationship.
While accountants predict that technology will indeed absorb more traditional accountancy tasks, those such as advisory services and business development will take more time – although accountants foresee advisory to be a critical knowledge area and one with the greatest potential for growth.
Integrate new skills
Participants were asked how their role would evolve over the next ten years. Almost all agreed that they would need to integrate new skills and capabilities into their role, that their firm’s business model would be different in 10 years and that they themselves would become more efficient due to technology.
Just over 25 per cent agreed that their firm would outsource more compliance work in 10 years time. Some see this as positive – tasks absorbed through technology will ease their workload, whereas others worry that fewer accountants will be needed as a result. One thing all agree on: the world of accountancy will change.
Jon Cooper, co-founder of CooperFaure Accountants, says: “We’re at the start of a pivotal 10 years, with the advances in technology and artificial intelligence only likely to accelerate. It’s a game changer that could cut down the headcount for both accountants and businesses with in-house teams.”
So how can the ‘accountant of tomorrow’ prepare for the future? They must be open to changing core elements of their firm, such as technology, processes and their business model. Keeping clients compliant will continue to be at the heart of their offering, but much of the work to complete these tasks will be automated. More accurate and timely data will provide opportunities to offer more forward-focused services, and could cause accountants to adjust their business model.
Software partnerships will also be key in the digital age. As technology facilitates the digital world, Thomson Reuters is already working on the solutions needed to take accountants through the next 10 years, with the increasing use of real-time data and ever-changing regulatory requirements.
Download the ‘Accountant of Tomorrow’ report.