It is vital the opportunity presented by technology is embraced, now.
In the long term, it feels fruitless to try to compete with automation. You will not be able to perform data entry or other low complexity tasks quicker, cheaper, or more effectively than the machine. The opportunity lies in applying the technology and extracting value from it as a service proposition.
Data is a critical component relevant to this discussion. The exponential increase in data being created and stored by modern businesses presents both huge opportunities and challenges to business advisors.
With strategic decisions increasingly being taken in businesses based on visualisations of huge data sets, expectations have been raised regarding how advisors should themselves be leveraging data. The question of “do you use data analytics” has moved on to “what examples do you have of adding valuable insights to businesses like ours using data analytics”.
While leveraging technology and data are key ingredients, digital working involves much more. Beyond question, global events in the first half of 2020 have rapidly increased the pace at which accounting firms have moved to digital service delivery. The prior barriers have quickly been broken down.
But as the world plans for the new normal, the opportunity presented is not to simply move prior working practices to a digital arena. Instead, firms should aim to forge new approaches to maximise the value of digital working and move to a new operating approach.
The Focus Areas
Accounting firms seeking to increase digitisation should focus on three critical areas to meet the changing needs of their clients and leverage the technology available to them:
Digitising compliance activities
Creating new, digital advisory services
Extracting maximum value from data.
Be mindful of the doom-mongering which has been circulated across the global profession for multiple years. Many of those in a firm leadership role will have heard the need to “move to advisory” too many times.
But that is not the core message here. Compliance performed digitally should be increasingly attractive and profitable.
The beauty of this approach is that there are significant synergies between these focus areas. These synergies come first and foremost in the form of technology – the same tools can often be applied across all 3 areas.
Further, digitisation within compliance frees capacity from the team. The time previously spent on low value activities can be moved to high-value, fee earning work. Such as new digital advisory services created.
Data is a valuable by-product of this change but using client data to perform one part of a service is not enough. The most successful firms aim to maximise the value of this data, both to them and their clients.
Firms must focus on leveraging client data across multiple services, for example creating a clear workflow for this data across audit, accounts preparation and corporate tax services. This places importance on integration of technologies and different service line teams achieving some level of strategic consensus.
But even greater value can be achieved from data through areas such as client benchmarking reports and the identification of advisory services relevant to support client growth.
Mindset and Skills
Evolving in this way places a reliance on the emotional intelligence of your team.
Keith James of Thomson Reuters explains that mindset is vital to innovation in accounting firms and outlines 3 mindsets:
Outward Mindset – focusing on your clients and what they need
Growth Mindset – believing you can change and breaking “the way it’s always been done”
Team Mindset – forming a great team dynamic to be effective
The skillset of the future accountant is naturally impacted by this shift, but perhaps not in the most obvious ways.
There is no need for every accountant to be able to code. That is a hyperbole not to subscribe to, in the same way it is not required that a delivery driver can build his own car.
But the ability to analyse, interpret and communicate findings is certainly of increased importance. Commercial acumen is also essential both for the development of new service propositions and to be able to add greater value to clients.
Digital and Relevant
While the relevance of accounting services and the digitisation of accounting firms who deliver them have been discussed independently for some time, the two are now intrinsically linked.
Firms must embrace the challenge laid out in front of them, but with the right focus and mindset the move to digital will fuel strategic growth.
While many firms are on the journey, none are at the destination. The drive for digital progress must be high on every firm agenda, the relevance of the profession might be at stake.
If you would like more information about any of the topics in this article or would like to discuss how you can get started, please get in touch with Inflo today.