What the Future Holds

The times they are a’changing, and quite how the businesses of today will compare with the businesses of tomorrow is unclear.

One thing is for sure: virtually every area of business will continue to be disrupted by technological developments and applications.  Possibly the only area which will truly be insulated from this is the personal service sector in which the customer is actively paying for a personal touch. Hairdressers, elderly care workers, restaurant staff, nurses and the like, these will always require human intervention, and inevitably we will pay a premium for a human service experience.

But what about those business sectors where we as consumers and customers do not require a personal touch?  In such areas, our priority is the quality, speed and cost of the service.  We have a problem and we’re happy to pay for its resolution but we really don’t care how it’s resolved.

There is no business service more likely to be impacted by this than accountancy.  Essentially most small business owners have a pain point around their financial information, what it means and how they can pay the least amount of tax.  Do they want to hang out for the ‘personal touch’ of an accountant?

Probably not.

We already have active forward momentum, driven our very own world-leading company Xero, which is leading the charge towards a digital financial future for small business owners.  The IRD agrees that they want accountants out of the loop and wish to have their machines talking to the Xero machine.  They have started shedding their internal accountants as they become surplus to requirements.

Small business owners input their own data, their Xero file integrates directly to the IRD and both Xero and the IRD run validation programmes over the information to ensure it falls within expected parameters.

Ultimately the Xero business file will interact directly to the IRD with the bank copied in so that tax can move seamlessly through the system, with appropriate checks and balances in place to ensure both sides pay, and receive, fair amounts of tax.

Could it be therefore, that accountancy runs the risk of becoming a business dinosaur, soon to be extinct (like the horse and carriage manufacturers of the early 1900’s)?  Possibly.

Or possibly not.  Maybe there will be a re-invention of the skills that are currently being offered by the accounting profession with different tools and different services provided to the small business market.  So what does the small business market want?

One thing small businesses  have been saying out loud for years now, to a profession that has been rather hard of hearing, is: “- we want a forward view for our finances.”

“We’re not interested in where we’ve been – we’re interested in where we’re going”.

And this is where opportunity can be found. Machines can easily show the past and analyse it but we have a lot less current capacity for software to show us the future.  Yes, forecasting software has been developed – but it has remarkably little flexibility or finesse.  Current software takes what has happened and pushes it forward – it cannot easily imagine a different future.

But the human mind, suitably skilled and trained, can do exactly that.  The accounting brain can synthesise the past, the aims of the business owner and the likely economic environment and from this predict any number of future scenarios.

And therein lies a major opportunity for the accounting profession – by adding human intervention to technological process, it can add real value to the future management and development of small businesses.

Revolutionary? No. It’s simply a case of adapt and survive –  a challenge facing so many established business sectors.

Like any other profession, accountancy needs to focus on what customers want, and develop it’s services to meet this. And of course there will be those who throw up and their hands in horror, saying “Change? Never”. It’s hard to see a future for them.

In the meantime, business owners continue to have two key issues for accountants  to solve:

  • They are short of time.
  • They don’t have specific tax & accounting knowledge.

It’s our job, and it always will be, to help them be more productive with their time and ensure that as much money as possible stays in the productive sector.

But quite how we achieve that in the future remains to be seen: in the meantime, we’re working on it.