Embracing digital disruption to drive growth
The accounting services industry is at the forefront of sweeping digital disruption. Momentous technology change, coupled with shifting consumer trends, has prompted a new methodology for how the industry creates value for clients.
In this era of unprecedented transformation, those who understand the pace of change and its ensuing challenges will best reap the benefits. Below are four major trends that are revolutionizing accounting services, along with essential steps to readily embrace the most pressing digital business technology disruptions.
1. Evolving client demands
Today clients want technology to handle routine, mundane work so they can interact more closely and collaboratively with their accountants in ways that previous generations may not have. Some 72 percent of small business owners changed accounting firms because they received reactive service rather than proactive advice, according to research from Accountex. Yet 92 percent of CPAs are not future ready, according to a study by the American Institute of CPAs. Accountants must rethink the billable-hour model as more clients demand fixed fees and more transparency on how prices are set.
Clients increasingly want a self-service experience where they can quickly find information they need wherever they may be. Information management technology will be a key tool to help accountants be more forward-thinking and strategic, with digital processes poised to handle more routine, labor-intensive work.
From working with clients to the basic processes of running their firms, accountants are seeing technology take manual, error-prone tasks off their plates. Choosing and adopting the best cyber tools is challenging, but being left behind is not an option. Channels, business models and revenue streams are being transformed by apps, cloud computing, machine learning and on-demand digital services. Accounting and bookkeeping firms that are all-in with the cloud have higher growth rates than those that aren’t, according to research by Xero.
3. Markets going global
Because of both changes in the law and the growing reach of international trade, players of all sizes must find new partners to handle work they must hand off to someone else.
The Sarbanes-Oxley law requires that the firm that handles a company’s accounting work must be different than the one that conducts its audits. That creates an opportunity for midsized shops to collaborate with larger ones. As customers stretch their business operations into new states or countries, their accountants must find professionals in those regions to help.
4. Generational cliff
According to the AICPA, 75 percent of CPAs will be at retirement age by 2023, replaced with a younger, agile generation of workers. Firms of all sizes must re-evaluate everything from billing models to internal hierarchy in order to meet changing expectations and challenges to traditional work environments. Younger accountants want more flexibility, such as remote offices, and increasingly seek more important assignments and mobility within organizations.
Driving growth from digital disruption:
1. Make protecting data job No. 1
Firms need technology and procedures to ensure that only designated people get access to sensitive information. These processes must be easily adaptable to changes in both personnel and regulations, whether on the side of the firm or the client. It’s vital to have an intelligent information management system that enables you to manage permissions automatically and dynamically to ensure data security.
2. Automation and AI
The desire for fixed price agreements is driving automation needs, as companies look to become more efficient with less overhead. As firms look to increase efficiencies, they must trade in repetitive, time-consuming labor for automated work, enabling accountants to focus on providing more valuable strategic guidance.
AI-powered intelligent information management software can add speed and cut costs. For example, the processing of tax returns becomes far more efficient once raw data is more easily analyzed. AI can examine large sets of documents and extract key data points to be included in metadata, making them more easily searchable.
3. Give clients what they want
Meeting demands of modern customers means managing information located anywhere from network folders to ERP systems and other repositories. Yet 66 percent of professionals in the financial services industry find it challenging and time-consuming to find data they need to do their job on a mobile device, according to the 2019 Intelligent Information Management Benchmark Report.
4. Do higher-value work
Accounting firms will distinguish themselves for the right reasons if their professionals guide clients to better financial decisions while meeting today's shifting client expectations. Working with the right technology partners is vital to adding efficiencies both in the firms themselves and for companies and people they serve. In a profession that for decades has relied on the same tools and financial structures, it has never been more important to future-proof a firm.