Accounting firms have an interesting relationship with technology. Over the last decade, many industries have been impacted by the sweeping changes introduced by computer technology. For accounting this typically meant finding new ways to remain competitive and flexible without constantly investing in new technology. There are some glaring issues CPA’s are facing, however, and it requires forward thinking to resolve.
Automation is the looming threat that generates anxiety in many within the profession. Data entry is becoming an antiquated practice and streamlining the process by which an accountant works with their clients. In the future, artificial intelligence will organize schedules, make client profiles using available data and redefine the roll of accountants as a whole.
This is not a bad thing, however.
The industry is changing, but this is the fate of most industries as society advances forward, with new technologies and capabilities. Rather than see automation as a plague bringing inevitable ruin to an industry, see it as a liberation from much of the tedious and time consuming data entry and compliance work that holds the industry back from focusing on what really matters: the client.
Changing the Industry
Accountants don’t have to deal with paper tax forms or compile payroll manually. Modern software technology does all that work now.
In more traditional firms, this can be a bit of a culture shock. Graduating accountants are not being taught the fundamentals because that compliance work is done by software.
No system is perfect however, and accounting firms may need to adjust this shift by providing intensive training to all new hires within their firm. Emphasis on accounting principles will be needed for those trained in this new era of online accounting.
Redefining How Accountants Help
The needs of clients have changed as well. People are more independent as accounting becomes accessible and formerly more technical procedures are done online. The rise of investment apps and tax services online will mean fewer walk-in clients, but a rise in more specific consultation work.
Data entry work has been almost eliminated due to automation and cloud implementation. Printing paper checks and manually keying bills are tasks accountants no longer have to do.
It’s an inevitability that a firm reduce their workforce and scale down as technology redefines what work is done by CPA’s and what work is managed by algorithms. As a result, accountants will eventually, if not immediately, need offer specific services to clients like portfolio management and business consultation.
Staff recruitment remains the main issue for CPA firms. This is according to research conducted by the American Institute of CPA’s. Finding competent and qualified staff is the first concern for CPA firms barring solo practitioners.
One of the reasons cloud technology is gaining traction is due to the fluidity of use the cloud provides for accountants. Hosting a variety of applications and even computers through the cloud increases efficiency and productivity through cloud sharing, minimizing the redundant processes that often come from that type of work
Cloud technology offers CPA firms the ability to access files from anywhere from any digital device. It also allows multiple users to work on documents, spreadsheets and presentations simultaneously at any time.
This increase in productivity creates an opening to focus more on staffing and vetting potential hires.
Cyber Security Concerns
Data breaches and cybersecurity concerns for CPA firms and their clients pushed this category into the top five ranking for all firm sizes.
The top issues survey is conducted every two years and results are organized by firm size. This is because smaller firms have different needs and perspectives than larger ones.
Cyber security is not just an important issue because it’s required by compliance, there are sever legal penalties if disregarded. The law mandates a firm be protected and any incident that occurs could mean a substantial fine.
The first and easiest thing one could do is have a secure password. People usually choose a memorable password like birthdays and anniversaries but that’s not always the best option. Something less predictable such as a combination of random letter, numbers and symbols are the surest route to making your data a little more secure.
To hackers, a CPA firm is a treasure trove of useful and sellable data. Cloud technology has advanced since it’s early years and many cloud providers, including Nerds Support offer advanced data security capabilities.
As mentioned above, cloud accounting provides for efficient execution of tasks that cut down the time you spend on client work. This also changes the way your services are measured and billed. Accounting should be understood as a consultation job much like the law. You bill via fixed monthly fees rather than hourly.
Cloud accounting automates most transactions for clients. Accountants will progressively move towards accounting software that enhances the customer experience as opposed to the technical work itself.
Statistics show 67 percent of accountants around the globe prefer cloud accounting.
Traditionally accountants have focused on compliance and crunching numbers. Experienced accountants don’t tend to deal with this transactional work themselves, they do spend their time reviewing bookkeeping data and filing.
Due to automation and the advent of online and cloud accounting, accountants are performing more quality based work with clients. Accountants are now offering commercial insights by analyzing data via the cloud in a way only certified accountants understand. This allows for identifying important revenue drivers and consider how planning will impact profit.
Time is the greatest asset in any industry and accounting is no exception. 68 percent of accountants think that they could offer greater value to clients if they had more time, according to a study conducted by Xero. This indicates client demand for accountants has not gone down despite advancing technology and online tools.
83 percent of accountants believe understanding technology is as important as understanding accountancy. They understand the important changes brought about by technology and automation introduced to the industry.
Cloud accounting and accounting applications changes the standard of working a specific set of hours at a specific location. Through the cloud, accountants can do remote work, only requiring use of online accounting software. The flexibility made available by emerging technology has altered and continues to alter the industries it impacts. This is a boon for both businesses and accountants alike. Remote working widens the variety of what can be done and allows for a work-life balance that doesn’t sacrifice family priorities for their position.
This gives accountants full control of how they determine and prioritize importance of work. 75 percent of accountants believe they would be more successful if they chose their own work schedule.
This also means accountants can work on tasks on short notice using high functioning cloud based technology and provide improved an improved customer experience.
Cloud accounting disrupted industries
These huge technological leaps like improved broadband coverage, cloud infrastructure, and adoption of smartphone and tablets is changing what a small business owner is and how they work with accountants.
Business owners are now millennials, aging baby boomers and mothers with free time and side ventures operating from their kitchen tables and living rooms. In order to understand this new breed of business owner accountants are going to have to adopt many of the technologies that drive their clients.
The cloud, like many technologies should not be seen as a trend or a fad, but as a natural progression of how businesses operate. Innovations have their origins in addressing a need and resolving that need. Keeping up with ever changing tax codes, developing technologies and associated costs creates pressure many industries. This pressure in turn necessitates unique solutions and it is up to the industry to recognize a paradigm shift. It’s you job to get ahead of the curb.