Accountants advised to future-proof their businesses in 2020
As the evolution of technology intensifies, accountants need to start paying closer attention to how they package and price their products in order to generate the best outcomes for their business, said Mark Holton.
Mark Holton, the director of Smithink, explained that while a number of accounting firms have already made the natural transition to base level advisory, many have overly optimistic expectations.
“I think one of the mistakes they’re making with advisory is trying to get existing accountants who are comfortable doing compliance-based activity to be something different overnight. It does take time,” Mr Holton explained.
Strategically, he said, accountants have to be very sensible with how they package and sell their services going forward.
“I think with cloud technology and the integration of data and the collaboration of data, over time, maybe the next 12 months, we’re going to see accounting firms with more time and more capacity to be able to do other things,” Mr Holton said.
“There’s a lot of air in the industry around big data, around artificial intelligence, and around data analytics. And whilst all of that is fantastic, what we’re not talking about is how do we sell that to a client.”
Organising an accountancy practice and engaging the right type of client won’t be an easy task, Mr Holton predicted.
“One of my greatest concerns is, and I’ve been in this industry for a while, is that there is so much software out there at the moment, everybody is saying ‘Buy me, buy me and become an adviser of the future’, and accountants are very good at buying stuff,” he said.
“But what it comes back to is how do you implement it; how do you systemise it; what processes and system resources do you need to dedicate; what people resources do you need to attract and/or develop on your firm; and then put the right structure in place to make it successful.”
Mr Holton opined that while this may all be overwhelming; accountants are already very familiar with change. He thinks comfort is the main problem generator.
“I don’t think change is a major issue, I think comfort is the major issue. And that is, compliance is comfortable, it is profitable, we’re still doing it. Everyone is saying it’s going to be interrupted, it’s going to be moved or diminished, but there isn’t empirical evidence in Australia to back that up,” Mr Holton said.
He concluded that accounting practices need to start thinking about where they’re heading and where they want to be earning their money.
“Set some targets around challenges and diversification, because if the model is diversify in the future with technology and information and all these new initiatives, you need to consider future proofing,” Mr Holton said.