In 2017, accountants must stay on top of technological trends in order to safeguard their future. Here are four reasons why tech investment is critical to success
A new era for accountants has arrived, with widespread adoption of cloud computing services and the rise of mobile apps paving the way for more efficient interaction with clients. However, a survey conducted by online software provider Xero has revealed a distinct gap between accountancy firms that are willing to change with the times, compared to firms that have actively embraced new digital trends.
The survey highlighted that nearly three quarters of accountants (71%) believed that proficient knowledge of technology and automation in the finance function would be crucial to their success in the next five years. Yet, 22% of individuals surveyed suggested that unless they developed new tech skills by the end of 2020, the extent of digitisation would be so great that they would have to leave the sector.
Failing to keep on top of evolving technological trends could have major implications for accountants in 2017. Here are four key reasons why accountancy firms should consider investing in new IT equipment and technology to safeguard their future.
The government’s Making Tax Digital (MTD) scheme is set to end the days of “spreadsheet accounting”. Scheduled to launch for VAT in April 2019 before widening its scope to include other taxes, the initiative will provide a single online location for all individuals and businesses to manage their tax affairs. In addition to preparing clients for the shift to quarterly filing, accountants should look to adopt a digital-first model to fundamentally change the way they do business, fulfilling the greater need for access to financial information from anywhere at any time.
Business software company Exact has released research demonstrating that the number of UK accountants implementing digital solutions has almost tripled in the last 12 months. This has resulted in less time spent on paper-based administration, improved streamlining of business processes through greater integration of systems, and increased flexibility. Increased efficiency can be passed directly onto clients so it’s essential for firms to ensure that they stay ahead of competitors.
Exact’s findings highlighted that the most critical service differentiation that SMEs now demand from accountants is speed. Whether it’s cloud-based services, mobile apps or business analytics solutions, modern technology can transform productivity by eradicating inefficient paper-based forms and manual processes. Integrated systems provide faster access to critical data, enabling accountants to respond faster to client queries and allowing them to work with greater flexibility to achieve a better work-life balance.
Accountancy firms that prosper will ultimately be the ones that can keep pace with digital innovations while providing value-added services for which clients are willing to pay more. From providing access to real-time financial data, complemented with more sophisticated analysis to include business intelligence and benchmarking, clients will be more willing to put their trust in accountants to improve their firm’s performance.
Technology is no longer a barrier for accountants who wish to compete with bigger, more established practices or emerging FinTech players. But, deciding how to fund significant investments must be considered carefully – choosing the wrong option could restrict a practice’s ability to access the latest technology when it needs it the most.
IT budgets can often constrain a business’s growth due to the need to carefully manage cash flow and available working capital. Electing to pay for new investments upfront in one lump sum can be cost prohibitive. In contrast, asset finance products from trusted alternative providers can help.
These flexible, payment over time solutions can be used to fund all types of IT asset investment, including software, hardware and associated maintenance and support costs over a period from one to five years. By spreading the cost over a fixed term, asset finance represents the cheapest way to fund major IT projects and ensures that accountants do not have to fall behind in being able to benefit from new technology developments, enabling them to continue to flourish.
Disruptive schemes such as MTD and auto-enrolment present an opportunity to increase productivity and secure significant growth by retaining and attracting new clients. In 2017, accountancy practices should no longer be asking themselves if they have considered purchasing new IT equipment and technology. The key question now is: can they afford not to do so?
Steve Deutsch is chief executive of Wesleyan Bank.
Find out how you can stay ahead of the curve, and spread the cost of upgrading IT and tech investments with Wesleyan Bank.