The traditional image of accountants has often been one of boring, stuffy technocrats who lack any real personality. However, in my experience that is rarely the case and in recent years accountants are increasingly dynamic, creative and customer service focussed. Technology has played a significant part in this change.
The accountancy market is unregulated, unlike the legal sector, and so the barriers to entry are low for new entrants typically those who worked at bigger firms frustrated with slow tech adoption and decision making, wanting to set up their own practices to challenge the status quo of the sector. The significant advantage of technology has been that for those new entrants where barriers did remain, they were now even lower. Small or start-up firms adopting SAAS no longer had to commit to significant upfront software and hardware costs and could provide client services that were the preserve of mid-size firms in days gone by. Equally, larger firms that adopted cloud technologies have been able to offer services, such as bookkeeping, that historically could not be competitively priced using desktop software.
The cloud technology revolution for the accountancy sector started just over 10 years ago although it can trace its history back to the mid-90s. Having said that, the technology available in the mid-90s was only suitable for large corporations with the release of ERP systems such as Netsuite and SAP. This is part of the reason why cloud accounting technology did not really take off until the late 2000’s when products like Kashflow, Xero, FreeAgent and later QuickBooks Online started becoming the mainstream and replace desktop equivalents. It is estimated now that over 50% of SME’s use a cloud accounting software package.
The new cloud accounting products that came to market placed APIs and integration with other products front and centre tied in with a great user interface/experience (UI/UX) and user engagement through gamification of tasks. This was in stark difference to their desktop equivalents which often operated as data silos and offered a steep learning curve for new users. The result of this was that for those early adopters and those who more recently adopted cloud you can experiment with the types of systems and software that you utilise and work with.
For the accounting sector the use of software such as CRM or direct marketing tools, such as SurveyMonkey, relatively unheard of 10 years ago suddenly came into the considerations as a core part of an accountants’ app stack. This experimentation with systems often built for other service sectors brought with it fresh ideas on how to do business including new ways of engaging with clients.
One other interesting area of the cloud revolution within the accounting sector has been the level of engagement and the identification of opportunities by accountants who have become developers and tech entrepreneurs themselves creating their own apps for the ecosystems we use. These founders have often focused on issues or areas they have faced themselves or areas where, for example, the accounting market is particularly underserved.
So where does the future lie for the sector?
In the accountancy world now, there are an interesting number of new technologies ready now, or are on the horizon, which will have a significant impact in the way that we work with our clients and their businesses.
We are already seeing the impact of open banking, launched just over 3 years ago, with new payment technologies and new consumer and business apps being built specifically as a result of this technological change. Open banking APIs provide new opportunities around audit and compliance and has the potential to turn this once reactive backward-looking service into something more proactive. Coupled with live data feeds from accountancy systems, HMRC and Companies House the provision of real time risk and fraud analysis could move into the SME space.
There will be increasing levels of opportunity for accountants to advise not just the businesses but the business owners in one holistic way as the transition from Open Banking to Open Finance occurs and we can for the first time get close to real time clarity and insight on not just business performance but the business owners personal finance position.
Digital invoicing recently became law in Australia and New Zealand and its adoption is also expected to become law in Italy with other countries likely to follow. This again is going to have significant impact on the way that businesses operate on the way that accountants provide advice and how their software works. Trailblazing Tech A brief history of the cloud boom John Toon, Senior Manager, Technical Strategy Lead
Furthermore, in the UK we are seeing Making Tax Digital being rolled out by HMRC. This is a three-phase development and we have already seen VAT move through MTD with personal tax coming in the next 12 months and then corporation tax going to be rolled out in 5 years’ time. Again, these will be significant changes for businesses and their advisors particularly in respect of the technology required to interact with MTD APIs.
We are also seeing a huge amount of interest in data analytics, processing, and reporting. Again, much of this is driven around APIs where we can now connect accounting and other business systems together drawing information from other sources and aggregating this on dashboards using tools like Power BI, for example, to present information in different ways, with different levels of context, in a way that has never really been possible before.
I love the final thing that we are also seeing creeping into the accountancy sector, which is of huge interest to me - Robotic Process Automation. This is really the next iteration and next level of enabling cloud technologies within a business but equally can be coupled with legacy desktop/server-based systems. Process mining and RPA have risen in popularity during the COVID pandemic as it has raised awareness about the importance of having efficient business systems and processes in place. The move to work from home highlighted that many businesses, including ours, have many repeatable, burdensome tasks that are not a good use of a human’s time. It has also been well publicised that the UK economy has one of the worst productivity ratings compared to our international peers and this is one tool that can help business compete both locally and globally.
Accountants are well placed to advise businesses about these opportunities with expertise and experience of critically appraising business processes, coupled with knowledge of the technologies to put people, process efficiency and knowledgeable insight first.
Senior Manager, Technical Strategy Lead