The accounting profession has historically been slow to adapt to change, as we’ve seen in our previous two articles in this series. With the pace of technological change increasing rapidly, what does that mean for the future of Accounting?
At their global Xerocon conferences in the autumn of 2017, Xero showcased some of the machine learning technology that they are building into the platform. Very soon your accounting software will be able to do most, if not all, of the bookkeeping work for you with a very high (north of 90%) degree of accuracy.
With the advent of HMRC’s Making Tax Digital strategy, your software will also handle much of the financial reporting for you. Accounting firms that haven’t adapted and whose income still comes largely from compliance work and bookkeeping should be worried.
As an old boss of mine liked to say,”where there’s change there’s opportunity”, and that will be the case here. Those accountants who have embraced the advisory approach will find themselves in a strong position.
The Accountant as Coach will develop along similar lines to the way sports coaches support their athletes. Software such as Xero and the various add-on apps give accountants access to more data on a business than ever before. Just as sports coaches use data to help their athletes improve performance, accountants can now to do the same to help their clients improve their business results.
Clients will be used to speaking to them regularly – whether that’s bouncing ideas around, working on the strategy for the business, or forecasting future cashflows. They’ll have developed trusted relationships with their accountant, and see them as a vital member of their extended team.
Today’s accountant needs to keep up to date with the latest software coming onto the market, and because they know their clients businesses so well, they’ll be able to recommend new apps that could benefit the business. Xero’s add-on Marketplace already has over 500 apps and it’s still early days in relative terms.
Accounting firms of the future will look a little different too. The enlightened ones will begin to realise that they are businesses that happen to provide accounting services. It’s a subtle distinction, but makes a fundamental difference to the way they think, how services are delivered and the overall client experience.
With technology automating much of the bookkeeping and compliance work that traditional firms do, those departments will largely disappear. The headcount will reduce and more businesses will embrace remote working.
In an online world it’s more important to have the right specialists on the team wherever they happen to be, than to have them in the office.
Xero will continue to lead the way in accounting software, however I hope that we’ll see the rise of a credible competitor. Not because I don’t like Xero – I do – but because competition is good for the market and right now there’s no-one in the UK that comes close.
Perhaps Sage will reinvent themselves, although I think that’s highly unlikely. Maybe Quickbooks will be the challenger, or maybe someone else will enter the market. It’ll be interesting to see what happens.
Whatever happens in the future, businesses will still need a good accountant. What that accountant does, and how they do it, however, are likely to be very different from what we’re used to in 2017.
Strap yourself in for the ride, it’s going to be fun!