Accounting is an industry that is undergoing so much change, largely sparked by vast advances in technology and we're only going to see more of it in 2016. The question is, how prepared are you?
The evolution of cloud accounting is changing customer expectations and accountants are rethinking the way they operate to meet the new, often heightened, demands. And while a lot of leg work has already been done, we're still at the beginning of this generational shift. But be warned, that shift is taking hold and gaining momentum. It's a big trend to watch roll out over the next 12 months.
No longer is the question, should I be in the cloud? That discussion is over. What you can do now is begin to change mindsets and decide who you're going to be to your clients and the future generation of staff in your practice.
Technology is also changing the way small business owners run their operations. We're seeing more quality of life businesses emerge. People are ready to not be tied to the paperwork in their business; they want to focus on the things they are most passionate about. Technology is helping them find a better work/life integration. With more automation entering small businesses and accounting firms, questions around staffing needs are also being raised.
Traditional data-entry roles are being automated, so the skills needed to do those same tasks may be different than the past, as well as having more advisor opportunities available with clients that require different analytical experience. For many accountants, this completely changes the firm they've been operating or working in.
Leaders need to be prepared to manage this change by reÂskilling existing employees so they are equipped to come along for the ride. This may also affect how you staff your practice and change how work is distributed.
Creating a more efficient operating model between automation, client tasks, and relationship management can create better profitability per engagement. This transition to an advisory role is also altering how accounting firms add value to small businesses.
Value-Âbased pricing doesn't necessarily mean evaluating your value to a client based on time. When you're trying to determine how this will fit into your firm, you need to understand if there's a disconnect between what your client values and what your practice values.
Accountants have always valued the time spent in calculating the financials and operational reporting and analysis. However, this causes a mismatch between what accountants bill for versus what your clients want. Clients don't necessarily value all the time that it takes to do the backÂ-office work; they value the answer they are trying to get from their accountant or bookkeeper.
Understanding that while technology may shorten the time it takes an accountant to get to that answer, it doesn't make you less valuable. Rather, the speed and quality of advice from information that is generated from the tools you use is the value accountants provide. After all, data means nothing to your clients if they can't interpret it and take action on it.
The other key benefit of technology is that you can work from anywhere, at any time. It is also an opportunity for accountants to cut overhead by having fewer physical offices and allowing staff to work remotely. By building that flexibility into your practice you're able to hire the best people for your business, no matter where they are.
With location no longer critical, we're also starting to see the rise of global accounting partnerships where advisors around the world are connecting to help their clients do business in different countries. Rather than looking at other firms as competition, focusing on your specialization opens up an opportunity to network with other firms in a way that creates an economic benefit for both of you.
All of these trends are reshaping what it means to be an accountant today and into the future. By automating and streamlining old processes that previously ate up so much time, advisors are able to redefine their purpose, find specializations or industries that they're passionate about, and provide a much higher level of service. At the end of the day it's a win for both the advisor and the small business client.
About Amy Vetter
Amy Vetter, CPA, CITP, CGMA, is Global VP, Education & US Head of Accounting at Xero.