Disruptions & Solutions: The Market Forces of the Global Accounting Profession
Heraclitus once said that everything changes and nothing stands still. In this modern world, technological advancements, social change, and innovative thinking are inevitable – if you can’t swim against the current, you just have to go with the flow.
The accounting industry is no exception to this modernisation. According to Rob Nixon, founder & CEO of Proactive Accountants Network, there are three main areas that are being disrupted in the global accounting profession:
- Disruption # 1 Compliance is being commoditised by technology
We can observe how social behaviour has changed today. People are always on the go, but they cannot keep away from their business. They tend to rely on their smartphones and other mobile devices for real-time information and work collaboration.
Businesses are moving to the cloud and compliance-driven work are slowly shifting to cloud-based technology. There are a lot of applications available to help you improve productivity. Moreover, these applications are integrating to make your tasks even more convenient.
What’s not to like about technology? Data are accurate so you do not need to constantly check on mistakes. Work flow becomes efficient too as things are being automated. Can you imagine unto what extent the cloud technology can interfere with?
- Disruption # 2 Labour is being sourced from less expensive countries
Non-revenue-generating tasks are being outsourced to developing countries because they can do the tasks competitively, but with lower operational cost. “You can’t stop it… How could you compete with that low cost?” Nixon quipped during a webinar about his book Remaining Relevant.
For example, the Philippines is among the top global outsourcing destination. It has a skilled and highly educated talent pool that can render Australian accounting services for a lower cost. They have a good command in English so communicating with them is a breeze. The team in Australia does client facing roles like advice and sales, but the back office processes are done by their offshore team. The Philippines clearly satisfies the three reasons Australians outsource their work: the abundance of labour, a labour force who are supremely qualified, & a lower cost structure.
This poses a threat to the labour force of accountants in western countries but opens a great opportunity to capitalise on, at the same time.
- Disruption # 3 Clients are using the internet for your advice
The search engine has become our go-to source for our questions. As digital technology evolves, information has become more accessible. We have seen how flight booking can be done through the internet, replacing the role of travel agents. Even cars have been developed to become self-driving soon. Now, core services once provided by financial advisors can also be administered online for a lower cost.
Online advisers are usually the ones sought by do-it-yourself investors and those who have relatively small amounts to invest. Unless people have more complex financial needs, some investors prefer online advisers than traditional ones. This is why the latter really needs a reboot, a new way to encourage people to see how a financial adviser from a brick-and-mortar business can make a difference than the World Wide Web.
Would you let your job be made obsolete by the new wave of technology?
Meanwhile, Nixon suggests the following solutions for accountants to remain relevant:
Solution #1 Add value to what you are doing
With these digital disruptions, you must do more than just minimum work. To remain relevant, find a different way to add value to your client services. Offering free phone calls/emails and meetings all year, conducting a Business Performance Review every year with every client , and/or running client advisory boards to get feedback from clients on how you can improve are just some of the ways you can make a difference. Don’t let yourself be replaced by a computer or cheaper labour.
Solution # 2 Be Proactive With New Services
Sometimes, accountants are hesitant to offer additional services because they are not sure of the available resources. This ultimately deprives the client of what he might need and the accountant, of the opportunity to add value.
To avoid being stagnant, discover opportunities to promote new services. Boost financial planning by offering comprehensive planning advice and high level consulting because this is a highly personalised and comprehensive area that the internet cannot deliver. “At the end of the day, every client should be buying every product they need to help them achieve their goals!” said Nixon.
Solution # 3 Become the Real-Time Accountant
From the word itself, a real-time accountant is on-time, relevant, and pre-emptive. He is always one step ahead of everything so that he can avoid conflicts in the future. He is client-focused that’s why he regularly updates and follows up on them. With the help of the internet, he can always keep his clients posted on what’s going on, guarantee that data is always available for review and help them make sense out of it.
These so-called disrupted areas can be either an opportunity or a threat for the accountants; it depends on their plan of action. As Nixon put it, “You can’t stop them so you might as well embrace them.”
The Outsourced Accountant supports Australian and New Zealand accounting firms by helping them understand and implement outsourcing solutions to help them become more proactive and truly add value to their clients. If you want to know more about outsourcing, call us at 1300 896 522, and download our e-book.
Accountants Benchmark Report 2014 by PANALITIX