The future of accountancy – managing the changes

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“When the wind of change blows, some people build walls, others build windmills.” 

This Chinese proverb is as true today as when it was written. Despite the obvious desirability of the windmill option, some accountants may resist the inevitable advancement of cloud accounting and technology that is distracting the whole profession.

Whilst 2016 has seen the introduction of new accounting standards where the accounting treatment under FRS102 is substantially different from existing UK GAAP, another game changing revolution is on the near horizon.

The government is committed to building a transparent and accessible tax system fit for the digital age. Making Tax Digital will bring inevitable changes to practice management. Accountants will have access to real time data that will provide opportunities to be more useful and offer more business advisory services to clients. Clients’ financial data may be viewed every day if accountants choose to, rather than reviewing it once a year. It makes accountants more relevant to their clients by adding value, predicting what’s going to happen to the client with real time data. As accountants we can become much more useful. Dealing in last year’s information will become less meaningful.

As accountants, we have an opportunity to embrace the changes heading our way. In preparation, accountancy practices and their people will need to understand and utilise today’s technological advancement, embrace social mobility and social media as a new way to do business and last but not least to train and transform the professionals to be ready for the future with the right skill set. In short, to build an agile team with learning and adaptable capability.

Despite the benefits, the growing advancements in technology pose a threat to the traditional accountant, but accountants can capitalise on the changes by adding value.

If accountancy firms don’t progress, they are going to disappear. Now is the time to get things rolling with a Making Tax Digital strategy. How will we work with digital software, deal with the flow of work, what structures will be required for reviewing work, ensuring quality and getting clients on board? There are many questions to answer.

As accountants we must offer broader digital services and live up to a title of trusted advisor and become it. We will not be able to survive just on compliance.

As accountants we must offer broader digital services and live up to a title of trusted advisor and become it. We will not be able to survive just on compliance.

Cloud accounting may impact up to 90% of small businesses in the next few years, making the small business system more efficient, meaning less time is spent on the accounting side. Accountancy firms will either have to downsize their teams or win new business or grow their business. Outsourcing may be needed in order for firms to be cost competitive.

Whilst we are often the ballast that provides the stability to SMEs and stakeholders; we must equally be innovative and venture our ideas into dimensions outside our comfort zone. We have to start thinking very differently.

HMRC systems will talk to the cloud accountancy systems and bypass the accountant.  Being the connection between HMRC and the business community may disappear.  The future of the profession is most definitely digital. By embracing cloud accounting, we can switch from being a superfluous data accountant to a real time accountant.

Let’s do it now. Unless we take advantage of what’s happening right now it will reduce our bottom line.

This change is happening with or without us so we might as well endorse it and embrace cloud technology and marketing as a new way of working.

We need to be proactive and embrace a business mind-set. We need to be forward-looking instead of being compliant as such jobs are more efficiently and effectively taken over by technology.

Change is inevitable and fast brought about by advancing technologies, innovative business models and an interconnected world, which hurls change at exponential speed. The accounting profession has to be masters of adapting and being flexible in its role. The human mind has capacity and intuition beyond our comprehension. The challenge is to push our abilities and boundaries beyond traditional mind sets to new areas – areas unexplored – to the extent of redefining the profession. We may not know what the future holds, but that should not stop us from imagining one outside our comfort zone. This is the time to do things differently and be bold about it. Not to do anything is not an option.

The future is not in the future. It is now.

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Dawn Clarkson is a licensed accountant and MAAT.

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