The advent of new technology inevitably shapes the future of every industry, and accounting is no exception. Accountants and bookkeepers who wish to future-proof their practices must embrace technology and adapt to the accounting trends that are disrupting long-held best practices.
But what exactly are some of these trends, and how can your firm prepare for 2018 and beyond?
Automation enables high-value advisory services
Being more “proactive” with your advisory services is a future-proofing tactic that you’ve likely heard before – but isn’t this just delaying the inevitable rise of the autobots?
Not necessarily! New data suggests that your clients will crave a human touch in a world driven by automation. Let’s take a closer look at how the relationship between advisors and automation is developing, and how automation is helping accountants and bookkeepers to become better advisors.
First, the somewhat scary news: it’s true that accounting jobs are frequently listed as some of the most at-risk positions for being replaced by robots. According to Wired:
Machines can now handle images, sounds, and text in a way that enables them to ingest and analyze data at high volume, without making costly mistakes. Between accounting professionals and truck drivers alone, about 4.5 million human jobs could be ceded to robots over the next few years.
New developments in machine learning and artificial intelligence have already started to rock the world of accounting (e.g., Intuit QuickBooks's and Xero's machine learning projects), enabling accountants and bookkeepers to automate tasks such as document collection, data entry, and other compliance-related tasks.
But this doesn't mean that automation is making accountants and bookkeepers obsolete – rather, it's arming them with two tools that are essential for becoming better advisors: more time and more data. With more time and more data on their hands, accountants and bookkeepers are enabled to provide proactive advice.
Moreover, recent data suggests that human advice will remain in demand, even as automation takes over. For example, a 2017 survey by Accenture found that the majority of investors prefer a mix of robot-generated “robo-advice” and human advice, indicating that people will still desire human connections in an AI-driven world.
In other words, providing proactive advice won’t just be effective for increasing your value and longevity as an advisor – it’s also what your clients want. Humans and robots can exist symbiotically, and automation can increase your value as an advisor.
A few actions you can take to start providing more proactive advice include:
- Switching to a fixed pricing and/or value-based pricing model. Hourly billing is becoming a thing of the past as automation increases efficiency. Ultimately, the switch to fixed pricing won’t just benefit accountants – it will also benefit your clients because it will emphasize the value of the services you provide (instead of the time to execute). As such, a fixed pricing model is much more conducive to providing advisory services.
- Increase the value and variety of your services. A 2016 survey by Wolters Kluwer found that 76% of clients using a wider variety of services (i.e., four or more) from their tax and accounting firms are more likely to report being satisfied, in comparison to only 50% for those using fewer than four services. Embracing automation tools will allow you to offer more to your clients, including more proactive advice in more areas of their business. In turn, this will allow you to “focus on developing proactive strategies to improve their service, maintain stronger client relationships, and recognize an increase in their bottom line.”
- Leverage business intelligence tools. On a broader scale, the automation revolution is being driven by the desire for increased data quality, data governance, business intelligence, and so on. In accounting, real-time data analysis is becoming easier thanks to tools like Fathom, Spotlight Reporting, and Futrli. Spend less time crunching the numbers and reporting on history, and more time understanding the “why” and the “what next”. Providing these types of insights are what will ultimately increase your value-add as an advisor.
Client experience is a key differentiator
By 2020, it is predicted that customer experience will take over price and product/service as a key differentiator for most B2B businesses. This is also an outcome of technology enabling more automated processes, as well as the ability to provide a greater degree of personalization.
Both businesses and consumers are showing interest in either improving or seeking an improved client experience – the following graph depicts the growth in interest over time for Google searches related to the search term “client experience”.
The demand for a better client experience has also surfaced as a key issue in accounting, and will continue to be a differentiator as more automation tools are developed and adopted. Cloud accounting tools play a huge role in improving the client experience – as mentioned above, they help save time, increase accuracy, and improve communication and collaboration between clients and advisors.
However, as more processes are standardized with technology, it’s also important to be aware that technology shouldn’t be your only differentiator. Standing out as an advisor also requires going above and beyond with the experience you create.
A few proven ways you can improve your client experience include:
- Being proactive. 2014 data from The Sleeter Group concluded that there was a disconnect between small business clients who wanted strategic advice from their accountant or bookkeeper and those that were actually receiving such advice. The fact that this theme is still being discussed indicates that this disconnect has endured throughout 2017, and likely will continue to endure until accountants and bookkeepers embrace proactivity.
- Demonstrating client appreciation. The ROI of saying “thank you” is huge – it can help to build client trust, as well as increase customer loyalty and retention, which is key for the survival of your firm. In financial services, it is estimated that increasing retention rates by 5% can increase profits by 25% to 95%.
- Leveraging customization. A whitepaper by Fox Financial Planning Network concluded that automating workflows is a critical step in efficiently delivering client services; however, “an even more important issue to delivering a personalized experience is to put in place workflow architecture that has flexibility.” Using technology to standardize your workflow is critical, but it’s also important to take a modular approach to building an accounting technology stack so you can customize your workflows according to your clients’ needs.
Which brings us to our final trend...
Deep expertise of the growing tech landscape
The accounting technology ecosystem has more than doubled in size over the past year. Learning how to navigate this quickly growing landscape like a pro and build a tech stack that can adapt to your clients’ needs is critical for a) becoming a better advisor, and b) meeting your clients’ evolving needs.
Here are some tips for getting to know the lay of the accounting tech landscape:
- Understand where automation can improve your workflows. Documenting your workflows is a great first step. Doing so will reveal common workflow areas that can (and should) be automated (e.g. document collection, data extraction). Then, research the areas where you can introduce technology to save time and improve results.
- Embrace modularity. Having a “modular tech stack” means leveraging software that can be combined with other systems to achieve customized workflows. For instance, the QuickBooks App Store and the Xero app marketplace both showcase a variety of app solutions (like Hubdoc) that integrate with them to increase their value as general ledger software.
- Follow cloud leaders. Who better to get insights on cloud accounting technology from than fellow cloud accountants and bookkeepers? Check out our list of the Top 50 Cloud Accountants for ideas of who to follow. Or, catch up on our Cloud Leaders webinar series!
Guide your clients back to the future
If all of these trends point to one thing, it’s the importance of becoming a devoted advisor to your small business clients. In order to advise more proactively and effectively, keep an open mind to the new technology and trends that will inevitably emerge in 2018. Adapt to best practices that are in your clients’ best interests, and you’ll be well on your way to future-proofing your firm.
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About the Author
Victoria is the Content Marketing Manager at Hubdoc. She is a graduate of the University of Toronto's Semiotics and Communication Theory program and has 5+ years of experience in digital marketing. She appreciates a fun pun and is always looking for a good book to read.Follow on Twitter More Content by Victoria Hoffman