Digitalisation isn’t an option for accountants… it’s a necessity
Written by Steve Cox of IRIS: Accountancy firms are in a state of flux. They’ve gone from fearing rapid digitisation to taking their feet off the gas now Making Tax Digital (MTD) has been delayed for a short time. So has the digital journey come to a halt?
What’s the delay?
The accountancy industry seems to be hesitant to move away from traditional processes towards a digital way of thinking. Recent research highlighted 39 per cent of accountants would consider using tablets for work, while just 30 per cent would use video conferencing for meetings. Considering the popularity of iPads and Skype with consumers, clients are now expecting this type of technology to be used in a professional setting.
The use of devices increases a little when looking at mobile applications. Interestingly, just over half (53 per cent) of accountants would consider using this technology in a professional setting. However, as businesses are using apps for more and more business critical processes, it’s only a matter of time before this figure increases.
Although the uptake of mobiles and devices seems sluggish, the industry isn’t blind to the importance of digital evolution. 73 per cent of practices encourage their accountants to conduct as much business as possible digitally, while 68 per cent encourage the use of technology to connect and collaborate with clients.
Automating functions such as bookkeeping and streamlining processes is a logical step in the digital journey; like ‘farm to fork’ for retailers, accountants can provide a paperless tax and accounts experience from client transaction to final filing at HMRC and Companies House.
Don’t delay digitalisation
Although many partners may view technology adoption as just another expense when traditional processes still get the job done, it is so much more than that. It’s a necessity to ensure the firm stays relevant in the eyes of both clients and the next generation of accountants.
Research shows the number of UK businesses with formal digital transformation strategies has more than doubled since last year. This highlights the rapid change companies will be going through over the coming years, adopting the latest technology to increase their efficiency and effectiveness. So, if clients have woken up to the worth of embracing technological change, they will simultaneously expect their business partners to work in a similar fashion. No business using cloud-based document sharing platforms will continue to accept written communication from their accountant. Similarly, if clients use mobile apps to manage their cash flow in real-time, the relationship with an accountant who works with pen and paper and only adds value in a monthly meeting isn’t sustainable.
The outlook for the next generation of accountants will be even more technologically focused. Millennials studying to be qualified accountants are consumers first and foremost. The vast majority will therefore use numerous smart devices for everything from streaming movies to paying for their weekly shop in-store. Accountancy firms should therefore take a long hard look at themselves and ask whether the next generation will want to go from using technology for everything in their personal lives, to managing accounts using bags of receipts. The answer will almost always be a resounding no.
Biggest change for decades
Our industry is right in the middle of the biggest change we have seen for decades. However, with the disruption comes opportunity. Productivity levels will increase vastly as previously time-consuming tasks can be largely automated, creating an environment which is much more rewarding to work in.
Similarly, businesses will enjoy the benefits of working with a digitally advanced firm which uses technology to take care of the day to day accountancy processes. This will free up their time to add true value to the company by offering high-level consultancy aligned with the business’ key objectives.
In this day and age, digitalisation isn’t a ‘nice to have’, it’s a necessity. Accountancy practices that bury their heads in the sand and ignore the evolution of the client base will find clients starting to look elsewhere for truly disruptive alternatives. The accountancy landscape is not a mountain to climb, rather a turbulent sea to cross. We have to evolve our thinking, methods and mindsets to constantly stay ahead and ride the wave rather than tumble under it.
Iris is exhibiting at Accountex Summit North, Pod 43. Join Steve Cox on 6 March at 3.15pm as he provides insight into the state of accountancy and how you can succeed amid the changing landscape.