Accountants have seen technology change what they do — computers, email and software have put paper forms and calculators in the distant past. Yet, tax vendors haven’t always had the technology solutions to keep up with what practitioners need, making radical tech adoption a distant goal for many. Today, those issues no longer exist!
You’ve likely moved from web-based accounting software to cloud-based tools. Now, AI and machine learning are reinventing bookkeeping. On the other side of automation, though, is disruption, and tax is ripe for this sort of change. Here’s why:
- More users incentivize developers. Thanks to the coronavirus pandemic, everyone is pretty much used to remote work and digital solutions. There are finally enough users of digital tools that software companies have an incentive to develop new software. Plus, a lot of accountants don’t really want to do 1040s anymore. It’s very hard to help that once-a-year taxpayer at a reasonable rate because it’s very time-consuming. It never used to be like that. But that translates into a gap in the marketplace where individuals will search for technology to do services that their CPA used to do if accountants can’t figure out how to be more efficient.
- Technology can keep up with the pace of tax. There previously wasn’t enough time to go beyond innovation because keeping up with the Tax Code was too much work. AI and ML have changed that, and it’s no longer a problem. Tax software can be rewritten in a new language that can be updated faster, which is pretty cool. It’s also possible to make human-centric software that isn’t scary or confusing to interact with, which will boost adoption rates.
- Investors are ready to invest. The profession has the interest of private equity, and venture capital firms that have found out that tax can be a profitable business. Automation hasn’t happened in years and, when there’s money, there’s movement. There is so much outside money coming into the accounting space, both into firms as well as vendors in the industry, that it is truly making a difference. Think about it. Investors put money where they think they will get a profitable exit, and they are seeing opportunity in tax.
These three reasons are what’s really going to shake things up, and accountants need to be aware of what’s happening.
The impact of time
Let’s also consider time. It’s a finite resource and the one thing you can’t get enough of. Now that the busy season is practically year-round, there’s no time to reset to figure things out and change for next year. It’s no longer a sprint; it’s a marathon. So, what do you need to refuel yourself and make it to the finish line? Automation.
Tech won’t replace accountants. It’s not going to take your job or the jobs of your team. But that doesn’t mean you can sit idle and let those existing jobs become irrelevant. Accountants, it’s time to up your game.
There is now an opportunity to transition time-consuming, basic services like 1040s to a tech service and free up your time for light advisory work and high-touch client interactions. It’s more than the 1040s. It’s any compliance that’s becoming too time-consuming. Even on the corporate side, there are countless different state and local tax laws to contend with. When the cost of labor is just too high to hire people to support highly specific tasks, the solution has to be technology.
If you have a significant backlog of work right now, you know things can’t stay the same. You need to automate and do something differently. That’s the disruptive space accountants are in right now.
Change the way you think about resources
Switching to a disruptive, tech-focused mindset is a big shift in how you think about resource allocation. How about this? Instead of looking at how much a product costs, consider how much it’s going to save. If the goal is compliance, then you need the resources. Start switching your mindset by asking yourself: “If we’re not filing these forms, what’s that going to do for us as a business?” If you change the conversation to the revenue side of the business, there will be more money in the pot.
How do you get to that other conversation? Start with better product and project management. And better training for the next generation that’s not based on an end result but, rather, technical skills. Change happens if you manage results, not time. And that’s why pricing is so critical. You have to look at the result, not just in how long it took to get done. More importantly, you have to ask if the customer is happy.
This leads to changing your entire business model. That seems like a big, scary thing to talk about. So instead, think of tech and disruption like this — never stop learning. That’s the way you need to live. That’s how you adapt.
It also means that you can never stop learning the other stuff either. That includes the people side of the business, emotional intelligence, management and leadership skills, and how to communicate. There are a lot more elements to being an effective professional today that you need to be aware of.
Accountants now live and work in a world that’s changing and evolving at record pace. To stay relevant, you must learn, grow and adapt. To thrive, there must be disruption. The accounting industry is ready. Are you?
