In a recent interview I did with Ed Jennings on the THRIVEal blog, I asked about the future of tax automation. You can see that 3.5 minute video here: http://thriveal.com/2010/12/23/interview-with-ed-jennings-ceo-of-copanion/
He was pretty clear that we won't be keying data in to tax returns forever. Technology will do this for us (unlike the guys above who are whacking a stump with dull garden tools).
With the convergence of technology, regulatory pressure to include cost basis in brokerage statements and our profession pushing the cloud, we are going to see greater efficiencies in the tax preparation space. This will excite some and probably scare others. For those with their nose down in a tax return every spring, this may cause some fear as to the future of your job. But for those with the eye to the future, you see the inevitable expansion and improvement of our historical profession hidden in new technologies.
As the manager of my own firm, Blumer & Associates, CPAs, PC, I came to realize early on that the tax preparer or the bookkeeper did not have a very long career. Sure, it may be all you've known for some time, but CPAs and tax professionals have got to realize that tax automation is simply going the way of all professions... towards greater efficiency in the process, towards less human intervention in the process and towards a focus on teaching the best practices of the process. Mix all of this in with a heaping dose of cloud computing and you've got an exciting new profession that can change with the times and offer new levels of service and solutions to the small business market.
Our jobs are changing, and I like to ponder the future of the CPA profession as it relates to cloud computing. Here are some great benefits and changes I see coming due to the promise of cloud computing:
1. A New Platform. I see the cloud as the new platform that all business processes will reside on. The cloud model of operation for a software company is more reliable, offers greater efficiences to their customers, and allows them to use innovative technologies to serve their customers better. The cloud simply gives the innovative online software vendor the means of control to better provide the service to the end user. That means you won't be able to order software disks in the mail forever. I believe the option won't even be available to you within 5 years. When compared to software delivery through the cloud, software companies won't be able to offer you CDs in the mail. It just won't be cost effective for them to do so. Start preparing now for this inevitable change.
2. Let Cloud Technology do your Grunt Work. Grunt work is something we've always been accustomed to in our industry. We've done write up work, or keyed in tax documents into tax software or tick and tied our manual audit work papers. But not anymore. The cloud offers great hope for eliminating some of our work for us. Again, don't let this scare you. Just view it as another "industrial revolution" where we will be asked to change. And I believe that change will bring greater enjoyment of our work and lives. There are parts of your job now that, frankly, technology can do better than you can. You may not like to hear that, but you have to know it's true. Using manual labor to populate tax software or accounting software is just not good use of your people's time anymore. Research the technology that can eliminate your grunt work, and give you your life back.
3. A Move Towards Higher Level Thinking. Anytime a product or profession is commoditized, it has to consciously move towards the services that use more brain power. That's consulting, and you can charge more for it. You can't market yourself as the best tax preparer in town anymore. When everyone is using technology geared towards tax automation and efficiency, then everyone will be basically providing the same foundational service in their tax practices. As a profession, we must move towards higher levels of thinking in our practices. We must strategically create new areas of consulting that offer new clients using new technology the new thinking that they need to succeed in a new business environment. Client's will pay for this too because they don't know how to traverse these new waters yet. It's pretty cool - we get to recreate ourselves based on the needs of the marketplace. Again, don't be scared - our profession isn't going away, we are just growing and changing into something more useful by using our brains in new effective ways.
4. Give the Cloud Gift to Your Clients. Many new products and technologies are being offered and built for the CPA profession. We are getting some pretty cool tools to make us paperless, more efficient and to put us in the clouds. But we are not applying what we are learning to our clients. Why not? Why can't we pass on to our clients the same foundational principles being offered to us? When we find our tax processes are becoming more efficient, why don't we train our clients to further deal with us digitally and stop sending us paper? Remember, our clients are getting younger. They would probably be open to send their tax documents to us electronically if we made a way for them to do so. Furthermore, we should offer cloud products to every client that comes in the door. Efficiency and Paperless complement the Cloud quite nicely. They are made for each other! And when we use them in conjunction with one another, we get greater efficiency in our daily business processes, and ultimately greater enjoyment in our work too. It's our profession's job to give these cloud gifts to our clients as well. They'll love you for it!
So let me summarize what I see as the Promise of the Cloud. The cloud will soon be the only platform available for you to operate in as you use it to eliminate any and all manual entry into your tax and accounting systems, while you create a strategy towards more profitable consulting models where you will ultimately deploy efficient paperless cloud processes in your client's businesses ultimately for their greater enjoyment. Whew. And the promise should not bring fear and loathing, just a profession where we help in new ways and enjoy our work and lives a lot more.
What do you think? Are you like the guys above whacking a stump with dull garden tools, or are you ready to serve in a new world where technology does a lot of your work for you?