Cloud software as well as other technological developments are changing the role of accountants forever. Accountants are becoming less number crunchers and more creative advisors, looking for new ways to help their clients’ bottom line. Cloud pioneer Xero “found that 83 percent of accountants believe that an understanding of technology is now as important as knowledge of the trade itself,” and those accountants who continue doing the same old thing done for the last 100 years will find themselves obsolete.
Many of these developments are technological, but technology influences the accounting business itself and what clients expect. Here are some important developments, both in technology and business, that accountants must consider in order to keep clients and stay ahead of the times.
1. The Rise of Blockchain
Blockchain is a digital ledger of economic transactions that is impossible to hack and completely transparent. Some tech enthusiasts believe that it could completely obsolete accounting and auditing as we know it. Instead of private financial databases where buyer and seller record a transaction separately and which an auditor checks for accuracy, blockchain records the transaction instantly in a shared ledger that cannot be altered afterwards. As the transaction is shared in the open, there is no need for a third party to check it for accuracy.
At minimum, auditors and accountants must understand the potential and problems with blockchain, and study it in greater detail so they know how it could be used. The fact that capital market spending on blockchain has grown exponentially over the past few years indicates that many financial businesses understand its importance.
2. Knowledge of Cloud Software
Cloud software is more popular than before, but there is a staggering array of cloud accounting software that businesses can use. Intuit QuickBooks is by far the most popular. But there is also Xero, Wave, Zoho, FreshBooks, NetSuite, and about a dozen more that I could name. Small to medium-sized businesses can be confused about which cloud accounting software offers the most utility.
Accountants should be able to answer this question. This does not just mean telling them which software is the “best.” This entails describing the various legal upsides and downsides for each software, and then letting them reach an informed decision. Furthermore, if a small business should decide to choose a software different from your recommendation, an accounting firm must be ready to integrate with said software or risk losing the client.
3. The Importance of Customer Service
Accountants can now manage more clients with cloud technology instead of having to make onsite visits, and the cloud means that companies can now transfer relevant financial information to accountants faster than before. But while accountants may look at this and assume they will have more business than before, the catch is that clients can quickly switch accountants with a few clicks.
Accountants must thus stand out from the competition. The best way to do this is not with technology, but with solid customer service. This means regularly communicating with clients and being available when they need help, asking for feedback so that your business knows where it can improve, and going above and beyond your competitors. Customers will be far more impressed by a business that is always available to talk than one that offers the latest technology.
4. Accounting and AI
We have all read news articles about how robots and artificial intelligence (AI) will make certain professions obsolete, but what about accounting? Much like other professions, automation will soon overtake humans in the performance of rote administrative tasks, such as data entry and categorization.
But rather than making accounting obsolete, automation can ensure that the final product is better than ever. If data entry and rote operations are improved and human bias is removed, accounting results will be clearer and have more integrity. Accountants will still play a supervisory role to connect clients, and can thus focus on more creative opportunities, such as financial advice.
5. Accountants Must Advise
People trust accountants with their tax information more than NGOs or politicians. And accountants should use that trust to help their clients with additional financial information and not just do their taxes.
Many accountants already offer their clients advisory financial services, but these services will be more important than before as DIY solutions like TurboTax and automation make more routine jobs obsolete. Furthermore, accountants can take advantage of technology trends to make it easier to offer advice. AI may make data entry obsolete, but it will also make it easier for accountants to compile financial information that they can offer to businesses. Accountants can use ever more accurate data to offer ever more accurate advice.
Creativity and insight rather than rote labor must now define the accountant’s work. The transition phase will be challenging, but businesses that plan in advance and use technology correctly will gain a step over their competitors.