There’s no question accountancy has seen a vast amount of change in the past few centuries, and in more recent history, a once paper-intensive profession is now having its full potential realized thanks to cloud computing. This, however, has formed a battle between next generation talent and legacy accountants.
While there has been a lot of technological advancement in accounting, even in 2016 there remains a group of legacy accountants who are still locked into desktop accounting software – potentially inhibiting the growth of their firms. By making the move to cloud accounting, legacy accountants can ensure their firm’s success and future-proof them by attracting next generation talent.
Looking back at the year that was, we can see that while we’ve made great strides toward the future, we’ve got a ways to go.
Legacy Accountants May Get Left Behind
Legacy accountants using desktop accounting software are restricted in more ways than one. Without the ability to automate time-intensive manual work, like data entry, billing is limited to the hours in a day. Legacy behaviors aren’t exclusive with the use of desktop accounting software. Other outdated practices in accounting firms include having an old website or no website at all, a lack of presence on social media, or not allowing remote work.
Accountants who don’t adapt to cloud technology run the risk of being left behind. A survey of more than 700 accountants and bookkeepers conducted by Xero earlier this year found that cloud-based firms add five times the amount of clients of traditional firms. Additionally, practices with a higher concentration of clients using cloud accounting software had higher levels of year-over-year revenue growth – reporting a 15 percent increase in comparison to traditional firms that only saw a 4 percent increase.
Content seriesView full content series
The findings also show how important not only implementation but continued education around cloud accounting software will prove for accountants and firms in the future.
Next Generation Accountants Understand Value of Technology
While not all accountants may be using cloud accounting software, the profession as a whole believes that knowledge of technology and automation in the financial sector is essential. Research conducted by my Xero colleagues across the pond found that 70 percent of accountants identify this knowledge as crucial to success in the sector within the next five years. Surveying more than 1,000 accounting professionals in the United Kingdom, we also found that this technical knowledge was considered even more important among the younger generation – with 80 percent of 16- to 24-year-olds answering so.
Possessing a deeper understanding of technology and being able to adapt more easily due to their recent education, millennials are generally more prepared for changes to accountancy roles. Those in this age group are more excited for the future of accounting than their generational predecessors. In fact, 88 percent of 16- to 24-year-olds said they were excited for the future of the profession, while only 64 percent of accountants age 35 and older said the same. This finding perhaps reflects an attitude among older generations that they aren’t as well-equipped to continue learning or retrain.
That said, 81 percent of accountants surveyed are currently undergoing training in order to become more technically proficient. In the future, accountancy bodies may have to modify their syllabus for students in order to accommodate for a shift in the focus of the profession.
Also, a broader focus on management consultancy and computer science was recommended by around a quarter of respondents. New graduates will be well-positioned to become the trusted advisors in their clients’ businesses if this education shift comes into play.
There is nothing but opportunity for legacy accountants who make the leap and go all-in on the cloud. Couple this with a sense of excitement for the future of the profession and they’ll ignite the spark in the next generation of accountants.