It’s crunch time for the accounting profession and it is currently failing its clients by not properly advising them on the most effective software solutions, creating an unscalable and inefficient global problem.
And in the United Kingdom, 54 percent of micro-businesses say they manage their accounts with pen and paper or a spreadsheet, according to a survey by the AIA. In short, time is being wasted on outdated accounting practices, when it could be better spent proactively providing actionable business insights that have a positive effect on the bottom line.
While automatization and cloud solutions might mean that traditional accounting’s days are numbered, it will also bring about evolution in the industry. Globally, we’ll see a wide-reaching, positive impact on small business, profit margins, and, in turn, on GDP. So, where is accountancy really heading in the face of the cloud-computing revolution?
Making Accounting More Intelligent
Data is invaluable, irrefutable, and eminently available. However, as one Redditor discovered, accountants claim that they spend anywhere between 50 percent and 90 percent of their time on data entry, depending on their seniority.
The value accountants bring to their clients should be twofold: not only must they communicate financial information and audit their books, but they should also help companies grow. The problem is, when we spend all our time punching in the numbers, we are unable to analyze and give our clients the useful insight they so desperately need.
By far the biggest challenge in accountancy, then, is the nonadoption of dedicated accounting software by smaller firms. Whether they are held back by costs, habit, or even the misconception that new tools will make their jobs redundant, it’s unclear.
What is clear, however, is the need to turn this around. As Joe Woodard, founder of Woodard Consulting Group, said, “Small businesses are confronting a massive shift in technology, and they must adopt those technologies into their business processes to effectively compete in the marketplace.”
Cloud-based software in particular is beginning to catalyse change within the industry and drive such competition. By allowing smaller accounting firms to not only cut server costs, but also to scale dramatically, they can serve many more small business customers than they would otherwise be able.
The fact is, with 50 percent of US workers expected to be working remotely by 2020, adoption of services, such as that of Intuit’s QuickBooks or Sage One’s solution, will soon be widespread. These solutions, which can be accessed securely on mobile devices and smartphones from anywhere with Internet access, will become part of our working lives – whether we like it or not.
Furthermore, as clients begin to expect secure accountancy services and face-to-face consultation on-site, as well as 24/7 access to their account data, this will become ever more pertinent an issue.
Real-time Data Opens up New Opportunities
In an article for Forbes in early 2015, Joseph Tarasco, president of Accountants Advisory Group, predicted that firms would “continue to acquire consulting and advisory companies that compliment their traditional services to provide integrated solutions services to their clients.”
In the short term, this might well be true – but if we gaze further into the crystal ball, we’ll see that accountants themselves will be required to develop new skills.
Firstly, people within the industry need to adapt, deepening their knowledge of cloud-based software solutions. While there’s nothing like a spreadsheet to cast cobwebs in the mind of the average office worker, having real-time data to hand in an easy, understandable format brings clarity and comprehension. Half the battle of the accountant is done when the client has a better understanding of the books. More time can then be invested in answering questions, giving advice, and offering insight.
Clearly advising clients on the right tech services to adopt, clarifying doubts, and outlining pros and cons of different software solutions will just become part of the job description. And, of course, we can safely say those firms that reject modernization will go under or be absorbed by the competition, sooner or later.
Secondly, accountants must also develop the “soft skills” necessary to effectively communicate their ideas with clients. Long gone are the days when we could push over a bushel of stamped and signed papers and sidle out the back door unnoticed. Not only are leadership and managerial abilities now becoming a requirement, but solid listening and writing skills are key to an accountant’s success.
As reported in Economia, “76 percent of accountancy jobs advertised today demand candidates who can demonstrate strong soft skills.” Savvy accountants will start improving on these skill sets, because it’s only a matter of time before they start being pushed into more consultant-like positions.
Once we are completely plugged in and able to work from anywhere, we will spend less time on administration and more time on innovation. But it’s access to real-time data that will truly allow accountants to add the value required by their clients.
Consultation skills are, then, third on the list. Whether providing insights into reducing abnormal wastage, improving tax and financial strategy, or knowing how much capital to keep in reserve, accountants can open up new pathways to startups, SMEs, and entrepreneurs – and, ultimately, help their businesses prosper.
Consider once again, for a moment, what would happen if those 24 million SMEs in the United States adopted dedicated and automatized accountancy software. Then consider the amount of time saved and the enormous bandwidth that would open up across the country. Efficiency would go through the roof and impact positively on the bottom line. This would translate into higher GDPs all around the world.
It’s time to embrace the technological revolution in accounting. We should no longer consider ourselves simple bookkeepers; instead, it is time to become the champions of small businesses that we really want to be.