Will Technology Make The Accountant Redundant?

With Cloud Computing, RTI, Auto-Enrolment and now HMRC’s Making Tax Digital initiative, the accounting profession is in the midst of a technology revolution.  To the proactive, dynamic and forward-thinking accountant this presents an exciting opportunity, but to others it could be a threat to their very existence.

We have become so used to having our needs and demands met instantly by business and technology that we have also become increasingly intolerant of those who have not kept up with the pace.  Technology has equipped us to undertake tasks ourselves that previously we would have outsourced to others.  In short, we do more for ourselves, more efficiently, and at a much quicker pace.

It is inevitable that the value of the accountant – especially to the small-business client – will be questioned as people ask “Is there an App for that?”  We all know that, by many clients, the service an accountant provides is accepted begrudgingly as a necessary evil that, while it may ensure that a set of accounts is in order before being sent off to the taxman, it is an expense that they think does not yield any tangible benefit to them.  Like insurance, accountancy is an expense that people feel obligated to incur rather than something they embrace enthusiastically.  Of course this is wrong but we know this is what many clients think.

Don’t shoot the messenger.

If people want to save themselves a few hundred pounds per year in accountant fees, they will surely look to technology to help them make that saving.  You know and I know that, without guidance, they will very likely make a choice that is right for them, but many clients will either be ignorant to this or will deem it an acceptable risk.

As tax-payers, clients will be fuelled by the Making Tax Digital initiative to consider this if they aren’t doing so already.  The UK Government is looking to enhance their online technologies to transform the tax system by 2020 and build “a more transparent and accessible system fit for the digital age” with a “vision for a transformed tax system and the end of the tax return”.

Of course, with taxpayers’ business accounts and data more readily available to them, HMRC will benefit from this by being able to collect more tax, more readily, more regularly and more in real-time.  I suspect that this won’t be promoted by HMRC as an objective of the initiative, but I suspect that it is and it is not a bad thing.  What business wouldn’t like to increase its revenue and improve its cash flow?

Cumulatively, this all could pose a clear and existential threat to the small-business accounting practice.  There are precedents in other industries, such as disruptive technologies like video streaming changing the way we watch movies.  Who rents physical DVDs or VHS videos anymore?  Remember Blockbuster?  So, is it inconceivable that the small-business accountant could become as archaic or as redundant as the village blacksmith?

It does not have to be this way; successful businesses and sectors adapt to the changing environment rather than surrendering to it, and so it must be with accountancy.  It just means that today’s accountants must learn new skills and embrace new technologies to ensure that they remain relevant and of use to both their clients and to the future tax system.

Adoption of new technologies should not be seen as an arduous burden or a threat to your profit margins.  Technology, when implemented both sensibly and cost-effectively, can actually improve your margins by reducing the time it takes to perform routine, mundane tasks and eliminate some altogether.  This will increase capacity to take on more clients and to develop new added-value, higher-margin services.

It is that final point that accountants must wake up to; new associated services will help to ensure that you have something to offer even if traditional services disappear.  Putting technology like Cloud Accounting at the core of your practice will ensure you can provide strategic and administrative support to your clients, thereby keeping you central to their needs.

Accountant should already be preparing to radically overhaul their traditional business model and client relationship, embracing the many benefits that technology, the internet and mobile devices can offer them and their clients. ‘Cloud Computing’ (storing and processing information on the internet, not on your own physical devices) generally is the biggest opportunity.

The future presents a challenge but it should be considered exciting rather than daunting.  Time is of the essence and with a judicious investment in new technologies, software and skills the accountant will actually be here to stay.

For more information on technology to help with your practice, please visit www.preludeaccounts.com, call 01656 725800 or e-mail info@preludeaccounts.com.

Prelude Accounts can also be found on Twitter via @PreludeAccounts / https://twitter.com/preludeaccounts.