From XU Magazine, 
Issue 17

Why you should devote time to learning about technology

A natural response one might expect from an accountant: “Why should I invest time learning about technology? Shouldn’t I go to a tax conference and improve my accounting skills?”

My answer: yes, tax compliance is a priority. You need to stay up-to-date on the central skills for which you’re paid. I would expect, however, that you allocate more than two days a year to self-education. And not just to make up your CPD hours.

Technology is much more than just software updates. Technology is the instrument and the evidence of progress. It’s the fire that cooks a caveman’s supper. The metal letter blocks that stamp paper in a printing press. The code that displays words in a browser. These words.

Technology brings the same instrumental power to accounting. The slide rule that supersedes the textbook. The calculator that buries the slide rule. The spreadsheet that renders the calculator obsolete.

Which of these technologies could you as an accountant afford to miss out on? Clearly none of them.

And here’s the better question: When is the best time to move to each new stage of accounting technology?

You don’t want to be the last guy with a slide rule in his hand, do you?

You can’t stand still – in business or in life. Otherwise your customers will lose interest in your business, so will your staff, and eventually, so will you. And when that happens you have to question why you are running a business in the first place. Get out and find something that makes you interested again.

Here’s a line of logic on accounting technology that I have really enjoyed picking apart. It’s a central theme in Accountech.Live. It goes like this:

Dramatic improvements in accounting software are reducing billable time required to complete returns. This in turn commoditises the compliance fees, which provide 80% of revenue in a typical small and mid-size firm.

SMEs are crying out for business advice. (cf. the explosion in ‘business coaches’). Accountants, with their knowledge of their clients’ finances, are in a great position to fill this gap.

Business advice invariably involves forecasts of some kind. And when you’re making forecasts you need to look at number of invoices, number of sales calls, web traffic, customer inquiries, etc.

These are all still numbers but they’re not financial. So now you need to start looking at a spreadsheet that holds the non-financial numbers for leading indicators, and the financial numbers that represent the business’ output.

Now if you need to measure how much web traffic equates to revenue, and analyse which source of traffic is the most profitable, a spreadsheet can get a little complex. If you do it regularly you’re going to need a database.

Once you’re mixing non-financial and financial data in databases you’re talking about a new set of skills: it’s called data engineering.

We are starting to see the first small and medium practices dabble in data engineering and even make their first hires. Deloitte is retraining a large number of their accountants as data engineers. In fact, Deloitte is coming to Accountech.Live to explain exactly why they are doing it.  

Australia, as I have said many times before, is leading the world in the evolution of the accounting profession. The mission of Accountech.Live is to showcase that leading edge. It is something to celebrate that a country with just 25 million people has turned out to be this crazy, world-leading lab for SME accounting technology.  

(Ask me over a beer one day and I’ll give you my thoughts on why…)

So my question to you:

Is data engineering the new calculator for the 2020s accountant?

If it is, when should you check this technology out and start testing it with your clients? This year, next year, or some year in the future?

I know, you’re busy. Clients are breathing down your neck. There’s a stack of work waiting for you to review. You’ve already booked a vacation in the Christmas holidays.

Hey, those are great points. You need to prioritise what is most important to your business. Only you know what you should be doing on any one day.  

But here’s the problem. Technology trends creep up on you. No one is going to knock on your door and tell you when to move to the next new thing. Unless they’re trying to sell it to you in which case you will most probably ignore them.

We all need to work out for ourselves when we want to adopt technology. Being first has its own drawbacks (cf. the guy who bought the first fax machine).

Just remember one thing. You don’t want to be the last guy with a slide rule in your hand.

See you at the show!

Sholto

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