Harnessing digital transformation to keep an accounting practice relevant

19 Jul 2019

As the march of technology continues, it is changing the world of tax for both accountants and their clients, so keeping pace is key for firms that want to both retain customers and attract new ones.

Small to mid-size accountancy firms are being buffeted by these winds of technological change, including the accessibility of information online, new client systems and regulatory changes, all of which make client retention more challenging. This situation is being exacerbated by the steady replacement of traditional clients with modern, technology-driven businesses.

Whereas a client once needed to ask their accountant questions directly, now they can provide answers to accounting and taxation queries online. Others are using online taxation and payroll services and accessing information stored in the Cloud. In addition, the government has enabled a digital shift through initiatives like Making Tax Digital (MTD), as it looks to reduce costs for small and medium-sized enterprises (SMEs).

All this amounts to a test for accounting firms as they seek to stay relevant. It is a challenge that bodies such as the Institute of Chartered Accountants in England and Wales (ICAEW) and the Association of Chartered Certified Accountants (ACCA) have been addressing. They outline the following key steps for accountants:

  • Transitioning to cloud software
  • Understanding and utilising automation
  • Keep learning, updating skills and communicating
  • Adding value.

Transitioning to cloud software

Cloud technology allows anytime, anywhere access to data, meaning firms and clients can connect and share data in real-time. This enables accountants to constantly monitor financial information and provide up-to-the-minute reports that can inform their clients' operational decisions with the latest financial data.

Understanding and utilising automation

The way financial information is collected and stored in systems and databases is changing, and will continue to advance alongside developments in Artificial Intelligence (AI) that are making old-fashioned data entry obsolete.

By understanding and utilising automation, accountants can find ways to provide their clients with timely information, such as supplying forecasts and intelligence, analysing processes or assessing the quality of staff. These automated systems will enable accountants to help their clients run their businesses more efficiently. However, this requires new procedures, processes and skillsets at accountancy firms.

In turn, this may mean that accountants spend less of their time reconciling figures and more time helping their clients to grow and succeed.

Keep learning, updating skills and communicating

The professional environment is constantly changing as it reflects the evolution of technology and new business models. In response, accountants need to keep learning and updating their skills and systems.

Keeping pace with these changes is a huge challenge, but those practices that succeed will be able to communicate effectively with clients and help them face the future by providing them with support and advice on key trends.

Adding value

Those accountancy firms that successfully make the digital transformation will be able to add value to their clients' businesses. This is especially important as the traditional model of charging clients by the hour for services falls out of favour. This model adds to the administrative workload and leads to inappropriate measurement and goals.

Instead, new billing models of fixed fees can improve efficiency and add value, helping to create real partnerships between firms and their clients.

Technology is not able to replace accounting professionals, but it is changing the environment they work in. Firms that can take advantage of the digital transformation to help their clients succeed will be able to face the future with confidence.

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