Accountants should focus on providing niche areas of service such as business valuation and retirement planning and move away from tasks including bookkeeping and financial reporting because automation and technological advances will take over much of their work.
Marc Staut, principal and consultant at Boomer Consulting, Inc., said that progress in artificial intelligence and machine learning will take over many of the accounting profession’s mundane work. He cited statistics from NPR’s Planet Money in which tax preparers, bookkeepers, accountants and auditors are among the top professions whose work will be taken over by automation.
Right now, automation is related to decision making, in which decisions are being made for us, Staut said on Tuesday at CCH Connections: User Conference 2017, in his session The Rise of the Robo-Accountants.
For example, clients of UBS can now ask for advice by calling a virtual assistant named Alexa and the chief investment office has recorded questions. Alexa can accept inquiries and dispense advice. Other companies are already implementing such robo-advisors, Staut said, and accountants should prepare for this automation shift.
Staut identified the services of a CPA through what Boomer terms “The Service Value Chain,” and CPAs should move up along that chain. One part of that matrix can be divided into four sections, from lowest to highest, that classifies the accountant's tasks and functions:
Transactional is the lowest level and covers bookkeeping, payroll and bill payment. Compliance covers tax preparation, audit-review and financial reporting. Performance includes CFO services, data analytics, benchmarking and business advisory. At the top is strategic, which covers strategic planning, succession planning and mergers and acquisition.
Those areas can be further categorized as hindsight, insight and foresight, Staut said.
Hindsight is what’s already happened, and that includes the transactional and compliance services. Insight is what’s happening now, and that covers performance. Foresight is what’s going to happen, and that includes strategic services.
“Move away from compliance services, and focus on providing high-value insights,” Staut said.
But ultimately, the goal would be to achieve foresight, and “that’s what we’ve got to start refocusing our efforts in this profession,” he said.
There are some steps accountants can take to move into high-value services, and Boomer outlined it as such:
Have a Plan
Pivot away from compliance services (data entry, crunching numbers) and focus on providing high-value business insights.
Use technology to augment the services you provide to your clients.
Market yourself as someone who can help them navigate the future, rather than someone who could be eliminated by it.
Invest in Niches:
Cost Segregation Studies
Operational Efficiency Improvements
Boomer’s additional advice for a firm’s transformation include: aligning leadership to form a vision and developing a plan to execute that vision, and training and engaging the firm’s team.
“The only constant is change. There’s a lot of opportunities out there,” Staut said. “AI is not something to be scared of. Think of it as augmentation. Think of it making things easier, making things faster.”