Accountancy, like many other professions, is undergoing digital transformation – albeit in a staggered and variable manner. What was once considered a reasonably ‘safe’ trade, and a necessity for businesses with predictable revenue models, is now open to disruption from technology.
Digitally savvy firms can massively outdo inert firms in terms of both efficiency and quality of service – manual accounting actions can take twice as long as automated ones, are more likely to result in errors, and divert attention and energy away from more important, value-added tasks.
But digital firms enjoy more benefits than efficiency; they’re also more neatly attuned to changing customer expectations.
The millennial generation in particular expects more from accountants than number-crunching and spreadsheet-filling: yes, they want efficiency, but they also want advice, they want service, and – ultimately – they want a different mindset.
And the best employees want to work for companies with this mindset. With Making Tax Digital (MTD) just around the corner, accountants are faced with a stark legislative, operational, and commercial challenge.
But becoming a digital firm shouldn’t be seen as a matter of compliance – but a strategic necessity to be readily embraced.
If you run an accounting firm, it’s vital to strike a balance between human interaction and technology. You can’t use technology to automate all of your core duties – if you did, what would clients be paying for? So how can you add value in 2019, and beyond?
Business models and fee structure
A digital mindset is about technology – but it’s also about rethinking the way your firm operates. If you can streamline administrative tasks and data entry, then it’s necessary to double down on the other things you can offer, especially if you’re running a smaller outfit; firms with bigger clients are already emphasising value-added services.
So, look at your financial data and your business model, identify any potential problems, and come up with solutions wherever you can. Here, human input can be invaluable (at least until machine learning eventually steps into the breach): if you need to undertake more content marketing to improve your target audience’s awareness and trust, for example, you’ll know better than a computer. Using technology will give you the time to focus on these activities.
It’s also worth examining your fee structure: are you offering clients value for money? If not, think about what services or support you could provide that you currently aren’t.
A digital culture
It’s a less tangible thing than the other actions, but it’s still a necessity to create and cultivate a digital culture within your firm. Your working environment should align neatly with the personalities of your target audience. The aim should be to create a fun, dynamic, and agile workplace which offers clear recognition for all staff – and clear career progression.
That means filling the right skills gaps with any new hires – and it means enabling the right training opportunities to ensure current staff stay up to date. A digital culture is half about the technology, and half about being able to adapt, adjust, and move quickly.
Technology: current essentials and future considerations
Finally, and most obviously, a digital firm is one driven by technology. To grow your practice and increase your client roster, you need to be able to scale – and that means using the latest tools.
You need to think about your firm today, but also tomorrow, and in ten years’ time. Many firms will state that they have already started (or even finished) their digital transformation.
However, in reality, it’s an ongoing process – especially with innovations in artificial intelligence and machine learning not too far off in the future.
At present, cloud accounting software is essential in terms of streamlining existing processes and facilitating future scaling. It offers a clear, real-time overview of your client accounts, enables easy multi-user access, and runs entirely online – nothing to install, updates confirmed automatically, and everything backed up without any involvement from you.
It also mitigates upfront business costs, as maintenance, system administration costs, version upgrades, and server failures are all managed by the cloud service provider.
Many firms are already on the way to adopting digital cloud software; yours may be too. The technology is a critical part of this. But the individual tools are perhaps less important than how they fit together: if the elements of your software suite aren’t compatible, it will have an effect on overall performance.
Migrating to the cloud
Migrating to the cloud can’t be done off the cuff. For a full picture of financial health, it’s best to start with a core tool like Xero, and then select the apps that will suit your clients’ particular needs. These apps will specialise in inventory management, point of sales, job costing, CRM, expense management, and other key areas.
Soldo, for example, has recently launched a core integration with Xero that allows enriched business expense transaction data to appear seamlessly within the platform – as well as an open bank feed integration that leverages Xero Bank Feeds API, which allows transactions to sync daily and automatically.
Each complementary app means more control over potentially hidden costs such as staff expenses, as well as greater insights, and ultimately fewer errors – painting a better picture of financial health and the accountant’s overall competency.
A digital mindset needs to be expressed internally and externally: you should feel the benefits of technology within your firm, but your customers should also perceive you as a technologically-driven business – one that helps them embrace digital practices, too. This will improve your value as a business in the longer term.
What works for individual firms will vary; the key is to take the initiative. A truly digital business relies on a truly digital attitude. In 2019, don’t wait for the competition to overtake you – and take your firm into a bold, exciting, and technologically-empowered future.