From XU Magazine, 
Issue 31

The Great Accounting Shift

What does the future of accounting look like?

As the industry strides towards a future-proofed way of working, accountants and bookkeepers will continue to drive this change.

Technology and automation is changing the way the accounting industry operates. Accountants and bookkeepers are an essential part of business digitisation, thanks to the growing number of software available to manage workflows. This represents an anticipated evolution of the accounting landscape, that’s now seeing accountants and bookkeepers shift from standard compliance to tech advisory. Here, we consider what that looks like.

Let’s be clear: compliance is critical and will never go away, and advisory is something accountants have always done. But automation helps make this work easier, quicker and more accurate, which allows accountants and bookkeepers to expand advisory services and become more strategic. This extra capacity created from automation will ensure that accountants and bookkeepers can help their clients achieve their personal and business goals.

The last few years have been a driver of this change. Clients who still weren’t using digital tools for their financing needs have now realised they need to reassess how they approach processes and embrace technology. 

The introduction of MTD in 2019 was an initial motivator, but once the pandemic hit, accessing government funding and having up-to-date numbers to aid decision making in times of uncertainty served as the main reason for many. With potential changes to compliance being introduced in the future, such as small companies now having to file P&Ls, the filing deadline potentially being shortened from nine to six months and, of course, we also have MTD for ITSA from 2024. This is encouraging business owners to think about how they prepare and keep their accounts throughout the year – and it’s where automation comes in handy.

So who are they turning to for support? Accountants and bookkeepers, of course.

From compliance to tech advisory

As businesses start to reassess their systems, they initially need help figuring out which types of software are needed and how to implement them. Once comfortable with an initial set-up, they move on to exploring what else those tools can do for them: digital health checks, easier business valuation, better reporting and forecasting… Suddenly, finance professionals start being seen as experts in digitisation.

For anyone diving into the sea of fintech for the first time, it doesn’t take long to feel overwhelmed. There are thousands of software options and apps available, and no one can be an expert on all of them, let alone keep on top of updates and new features. So assessing what clients are currently using, what else they need and how to implement it is the first step. 

A common solution is to look at cloud-based apps that are easy to embed and offer more benefits – a core tech stack that suits the majority of businesses. Extra tools can be recommended if and when necessary, based on the changes in their accounts and concerns. Segmenting clients to know which apps work better for them can help accountants advise on the ones that are more suitable, but also review the app stack when needed.

Teaching clients and training your team

It’s important to ensure the team is fully aware of the functionalities of each app to make the most of them. Clients won’t always know everything a tool can do, so will rely on accountants to introduce these apps in their day-to-day flows and keep them updated. 

Moving forward, both accountants and clients require additional training, at different levels. While clients need to know how to use software to submit information and meet deadlines, accountants must have more in-depth knowledge to increase efficiency and ROI, as well as support clients when needed. Self-guided training and resources are often the best solutions, as they can be completed in your own time and can be revisited at any time.

Reviewing current systems, understanding what’s needed, cleaning the data, recommending and implementing new tools and offering constant support… All of this takes time and skills, and clients see the added value to this new function.

Bringing businesses forward

This new “tech-advisory” service is a crucial step towards business digitisation, and it’s opening a new window of opportunities for accountancy firms. Business owners are busy focusing on building and scaling their companies and don’t always want to think about the admin side of things. Enter the tech-savvy accountant who will bring their business into the 21st century.

There’s also a lot of old-school accounting being done on new technology. For example, some clients already use Xero and are ready to introduce more automation, but don’t know how. It takes time for accountants to assess what each client needs and go through all the steps. There’s a lot that can be automated, but getting it all set up properly is what makes the difference. Over time, clients become more confident that systems will do what is needed. It’s a learning curve.

Firms are already seeing a demand for specific assistance from clients engaging in new technology. Services such as app advisory, training and ongoing monthly support are becoming popular, and clients are happy to pay for it as they clearly see the value. They’re seeing quicker turnaround times while having more conversations with accountants and bookkeepers. This allows for more communication and stronger relationships – essential for any firm’s reputation and growth. Compliance work won’t reduce, but will take less time because software is making it easier.

Breeding confidence

The role has shifted. There will still be a shoebox from time to time – after all, it all depends on businesses keeping on top of their record-keeping and having the right systems in place. But automation helps, and firms play a crucial role in building the confidence clients need to have in technology.

That will ultimately lead to a full finance function service being offered to clients. Compliance, bookkeeping, payments, cash flow, working capital management, strategic business advisor: if clients can rely on one single firm to get more done, they are more likely to stay. Looking after all of this isn’t something accountants could realistically do until a few years ago. But now, the variety of software and apps available make it feasible and cost-effective to provide extra advisory services focused on digitisation. 

Fewer clients, more work, smarter processes.

The future of accounting is indeed looking interesting.

To find out more about how technology and automation is changing the way the accounting industry operates, listen to this webinar on the Great Accounting Shift with accounting expert Paul Lodder and guests.

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