Surviving in the technological age: Graeme Finnie CA
I remember the days when accountants spent most of their working hours filing tax returns and keeping on top of clients’ books and records. That’s all changing now, and accountancy firms must evolve or risk being left behind.
With more and more user-friendly accountancy software packages, such as Xero and QuickBooks, becoming available on the market, the expectation that businesses have is that they can keep track of their own books and financial data – all at the click of a button.
New start-up entrepreneurs and SMEs are more likely to maintain their finances via mobile banking uploads and automated payroll systems rather than asking an accountant to do this for them.
In simple terms, it means that in the future accountants will no longer be required to do the volume of compliance work that they have been doing for so long. We will be operating in a world in which clients have real-time access to their financial information.
[Making Tax Digital] will force all businesses big and small to adopt a technology-based approach and file quarterly returns – it also means the end of the annual tax return.
It’s not only forward-thinking businesses that are embracing new technologies. The UK Government’s Making Tax Digital agenda means that, from 2018, all UK businesses will be required to update HMRC on a quarterly basis via online software and apps.
This change will force all businesses big and small to adopt a technology-based approach and file quarterly returns – it also means the end of the annual tax return.
These changes are all incredibly positive for businesses. Directors can now make real-time decisions based on up-to-the-minute financial data, rather than having to wait until the end of the tax year. It also means businesses will become more adaptable and aware of when they are doing well or not so well.
What does it mean for the future of accountancy?
Personally, I believe that it offers a huge opportunity for the more dynamic mid-tier practices to evolve into business advisory organisations.
While accountants may no longer be needed to do as much work to prepare their clients’ accounts, they will be required to offer more interpretation of information and financial advice – explaining what the figures mean and the options that are available.
At French Duncan, we use a raft of modern cloud-based solutions to make the interpretation of accounts easier and more meaningful for clients, providing them with user-friendly, easy-to-understand online dashboards.
There’s no doubt that this is a much more engaging and helpful way to provide accountancy information than traditional Excel spreadsheets.
While accountants may no longer be needed to do as much work to prepare their client’s accounts, they will be required to offer more interpretation of information and financial advice.
Currently, 70–80% of the average accountant’s time is taken up with compliance and bookkeeping tasks and the other 20–30% is advisory services. However, over the next few years, I think this figure will be turned on its head.
Fewer than half of our clients are using digital software packages to do their accounts, but that is going to increase significantly as Making Tax Digital comes into force.
More and more businesses will look to accountants for the delivery of proactive, timely advice. This is where we must lever our professional and commercial knowledge to really add value. It means we have to be up to speed, on the ball, and ready to deliver advice that is helpful and timely.
Paving the way for that change will require dynamism and technological skill. More importantly, though, it will mean accountancy firms have to recruit people who are more commercially aware and tech-savvy.
Gone are the days of old books and stuffy accountancy offices. Now, and moving forward, our trade is about technical expertise combined with the ability to build relationships and advise businesses with our wealth of experience.
The accountancy sector may be changing, but we are changing with it. There are exciting times ahead!