As there are many articles being written each and every day on the disruption occurring in the accounting industry thanks to technology shifts I have decided to collate and post a select collection of them each month and provide some commentary on them.
Four this past month have really focused on what is happening to the role of accountants and how it is rapidly changing.
It is obvious that the change is driven by the technology now available. Automation is making the data entry process easier and quicker and even non-existent in many cases. This we all know.
But what about the human element ? Part of the change is coming from clients demanding that their accountants start utilising this technology and so the “traditional” accountant is adapting as best as they can to meet this shift in consumer demand often from a self preservation point of view more than anything else.
But the other human element is the tech savvy accountant creating the modern practice from scratch or re-engineering their existing firm to become a modern practice. Taking the time to brand themselves as “cloud accountants” and using this as a point of difference in their marketing to attract those business owners and clients of other firms whose accountant hasn’t responded to the market shift.
Here they are:-
“Why an algorithm wants your highly skilled job”. Talks generally about how technology could take jobs away from humans…and accountants have a 94% probability of being replaced by computers !
And the next….
“A new breed of accounting firm”. Lucy Danon from Xero in the UK describes the shift she is seeing happening in the traditionally conservative profession in the UK, something that is being replicated around the globe.
And one focusing on our friends at the ATO
“ATO to Automate 4.5 Million Individual Tax Returns, Starting from 2014”. BoxFreeIT’s editor Sholto Macpherson reports on comments made by the ATO on its plans to liberate individual tax payers from any significant burden at tax time. ie, auto filing of tax returns.
My specifc thoughts on this…… How will this impact the profession? Of these 4.5million returns, 2 million are prepared by Tax Agents. At even a cheap $100 per return, that is a lot of lost revenue to the industry. How will it react ? I think it will put downward pressure on fees as those accountants/tax agents who no longer have individuals to focus on start offering cut price corporate tax return preparation services in an effort to keep their heads above water. Many small businesses who see no value with their higher priced accountant will take up this cheap service, leaving larger firms with falling revenues. The only way for larger firms to combat this is to use technology to streamline their processes but also to be able to provide higher value advisory services in a more cost efficient manner to their clients so that they do not lose these clients to cheaper service providers.
“Time to reboot the accounting profession”. The article looks at how the new players in the market are disrupting the incumbents. However it goes on the challenge if the new vendors can sustain this disruption.
All the articles support the overriding theory that change is occurring thanks to technology and detail how different parts of the market/industry from consumer, to supplier, to regulator are responding.
Check back mid March for my next collection of articles and my thoughts on their content.