Technology is driving a once-in-a-generation shift in the accounting industry which we expect will hit a critical inflection point this year.
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The move to cloud accounting platforms means software is doing more of the heavy lifting, freeing advisors from the drudgery of data entry so they can focus on higher value activities and help boost the success of their clients.
With more accountants choosing to work with their clients in the cloud, the industry is undergoing a significant shift – especially when it comes to how we perceive and demonstrate value.
Working on a single ledger, in real-time with our clients means we’re able to develop closer client relationships and up-level to offer more CFO-type services.
Advisory services are becoming the new norm
More often than not, firms are turning to advisory services as a way to differentiate and generate new revenue. Advisory and consulting services revenue growth was up in 2015 for 32 per cent of small- and mid-size North American accounting firms, according to the latest International Federation of Accountants (IFAC) Global SMP Survey. There’s a similar trend happening here in the UK, and right across the world.
To make advisory a sustainable part of your practice, you shouldn’t just be doing your client’s sums, you should also be doing your own. Before you get all tangled up in helping your clients, figure out the level of service you’re willing to deliver and what this means for your own business.
Cloud platforms like Xero are enabling accountants to do the technical, compliance-oriented work faster. It’s giving them more time to interpret the data and provide value-laden advice to the small businesses owners they work with. The role of an accountant is shifting from someone who just crunches historical numbers to someone who is a critical member of a small business owner’s team. Technology is actually driving relationship-based accounting partnerships and moving the advisory needle.
Automation takes a load off the accountant’s back
Automation is one trend that’s being discussed right across the accounting industry. HMRC is looking at how filings can be better streamlined and we’re building automation into our platform so advisors can better collaborate with their clients.
There has been some concern that automation will make accountants irrelevant, but that’s very far from reality. Automation and technology changes in the industry actually place advisors back in the centre and opens up a raft of opportunities.
By freeing up your time, accountants can offer advisory packages to small businesses that were previously not commercially viable – either it was too expensive for the small business owner or there wasn’t enough margin in it for the accountant. With better access to data, the role of the accountant as a small business advisor is stronger than ever.
It creates an opportunity to expand services beyond the traditional activities. By providing meaningful accounting information to your clients in real-time, it is possible to offer high-value services such as debtor chasing using automated debtor chasing apps, sourcing funding or finance using secondary finance platforms that take data from online accounting platforms to make rapid lending decisions.
Data is driving deeper insights
The idea of data driven advice is also evolving. With small businesses using a range of software solutions to run their businesses, from point of sale solutions to employee management, all of which feed into their cloud accounting solution, accountants can provide detailed, granular and customised advice, quickly.
There are also new products and features that can help accountants in their transition to the cloud and advisory services. Xero now offers integrated payroll and auto-enrollment services to help streamline customer management.
Assisting small business owners to ready themselves for auto enrolment is a massive business opportunity for the UK’s accountants. Over the next two years the bulk of the country’s 5.3 million small businesses will have to contend with their staging date and for many, how to deal with the changes is still a mystery.
However, given the majority of the UK’s small businesses still use simplistic paper based methods or spreadsheets to keep their books, the challenge of having to contend with more complicated payroll requirements will not be trivial. They will need their trusted advisor by their side, more than ever before.
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By helping your clients transition to cloud-based accounting and small business software now, you’re going to help them avoid a lot of pain when they’re required to manage their taxes and accounts digitally by April 2018.