Accountants Urged to Ride the Waves of Changeby
The urge for accountants to move beyond compliance and adapt to new emerging technology and greater client collaboration in order to stay relevant in today's ever-changing world was the clear message at Synergy, Thomson Reuters' 35th annual user conference.
Nearly 1,500 attendees heard keynotes from Jon Baron, managing director of the Professional segment with the Tax & Accounting business of Thomson Reuters, and Tom Hood, chief executive of the Maryland Association of CPAs and the Business Learning Institute. Each had their own spin on the issue â but the message was clear: The rapid change in today's world needs to be embraced and acted upon by accountants, not avoided.
âChanges are coming at an accelerated pace,â Baron said. âCloud, social, mobile, massive amounts of data, and general technology convergence can create business model challenges unlike anything we've ever seen before.â
Baron pointed to a number of issues facing the accounting profession â expiring tax laws, the Affordable Care Act, client globalization, the Supreme Court ruling on same-sex marriage, tax refund identity theft, FATCA compliance, changing filing deadlines, retiring baby boomers, and higher regulation and registration/testing of tax preparers.
That, however, hasn't deterred growth. The profession has seen a rise in employment over the last year. As of August, CPA firms employ 450,100 people, an increase of 4.1 percent. That said, turnover is at its highest level in more than 10 years at 17.1 percent, Baron said, quoting from the Rosenberg Survey. It was 15 percent last year.
But one of the biggest issues accountants continue to grapple with is the fast-changing pace of technology, Baron said.
âIt's really different this year,â he said. âOur biggest challenge as accounting firms may be change management, simply keeping up. This is not simply getting up-to-date; this is a cultural shift in firms. It's a mindset to stay on top of things and keep the firm moving.â
Baron shared a good amount of data with the audience about Internet and smartphone usage (by 2020, 80 percent of adults on Earth will have a smartphone) and how the number of apps in the app store has exploded â from 300,000 in 2010 to 1.5 million in 2015.
And the way we use technology is not just generational â almost 40 percent of 50 to 64-year-olds check their smartphones at least a few times an hour. (yes, per hour).
Baron talked about how technology and big data is changing the face of business (28 percent of small businesses have become more dependent on technology in the last year) and that 47 percent of all existing occupations are at risk of becoming redundant by 2020.
Despite all this, accountants have some catching up to do, as a 2015 Ultra Tax CS survey revealed that 83 percent of firms don't use cloud technology, 64 percent don't use portals for any clients, and 40 percent don't use a document management system.
And here's the kicker: The survey found that 35 percent don't even have a website.
Tom Hood reiterated Baron's sentiments in the keynote on the confab's second day. He sees the profession's biggest challenge is not only keeping up but also becoming âfuture-ready.â
Information overload, doing more with less, never enough time, are themes the themes Hood sees rising to the top over and over. His answer? Surfing.
âYou can't stop the waves, but you can learn how to surf,â he said. âWe can't stop the waves of change, but we can learn how to ride them.â
Hood pointed to a recent survey by The Sleeter Group that found the No. 1 reason why small businesses leave their CPAs is because they weren't receiving proactive advice, only reactive service.
âThey won't pay your fees if you don't give them proactive advice,â he said. âEven if you do the reactive services, like tax and audit, it's equally important that you care about your clients' business and industry. Just ask the question: What keeps you up at night?â
Hood challenged audience members to think about the notion of future-ready as an idea that goes beyond accounting. âWe spend too much time on historical things and we have to look into the waves and what is coming at us.â
According to Hood, only 8 percent of CPAs are future-ready â future-ready is the capacity to be aware, predictive, and adaptive for emerging challenges, technology innovations, and trends in business population and the social environment.
Only 20 percent of CPAs thought that emerging technologies would have an impact on business in the next 20 years. âIt's happening right now,â Hood said. âTo say drones, or robotics, are not going to impact business is quite frankly scary.â
Hood shared five steps firms can take to be future-ready:
- Context. Stay aware of emerging trends and what's happening in the here and now. Is your office and technology in the future or past? Do you know what your clients are facing now and in the future? Are you using the language of the future or the past?
- Certainty. Yes, we can predict the future, according to Hood. Mobile, social, and the cloud are not going away â they are accelerating. âIf you can start basing your strategies and opportunities on things that are certain, you will have a much higher success rate,â he said.
- Capacity. How do we make time to look at a future perspective? Are you using the technology that you have to its fullest? Hood recommends six ways firms can create capacity: maximize software and tools that you already have; use the latest and most efficient technologies; sharpen workflow and process efficiency; focus on your best âAâ clients; communicate your services; and engage your people. Hood says 70 percent of employees are coming to work with just their head, not their heart.
- Competence. Anticipate problems before they rear their head. How can we anticipate disruption while serving evolving needs? Act decisively and maintain effectiveness despite constant surprises and a lack of predictability, Hood said.
- Core beliefs. You need to have them. âProtect the core and stimulate progress,â Hood said. âProtect your purpose and values when everything else can and will change.â Millennials want a purpose-driven organization. âPurpose increases engagement dramatically, increases trust dramatically, and increases productivity dramatically,â Hood said. âThere's hidden gold in purpose.â
Hood reminded Synergy conference-goers to pay attention to their clients. If they are on mobile phones and tablets and your firm isn't â you need to be up to speed.
In closing, Hood gave audience members an assignment â take one hour within the next week and then make it a reoccurring monthly calendar appointment to think about the future. It could be anything â read a book, surf the Internet, investigate a new app â something to start the process of thinking about what's to come.