When it comes to digital transformation, accountants are having to evolve. Regulatory changes like Making Tax Digital (MTD), combined with the unpredictability of a turbulent economy, mean the industry is being forced to adapt quickly.
Many accountants may face these influences with a sense of trepidation – the daunting prospect of a future enabled by technology. But as the challenges facing the industry become more pronounced, emerging technologies, particularly the likes of artificial intelligence, can serve as crucial enablers.
Regulation is a two-way street
Depending on the client, MTD has already arrived (MTD for VAT) or is on its way (MTD for ITSA). Accountants are vital to helping businesses embrace MTD compliance, including evangelizing its role in sparking broader digital change within the company.
This is important, even if the UK Government’s decision to postpone the deadline for MTD for ITSA until 2026 may tempt affected sole traders and landlord clients to put off compliance. A new mindset is needed to avoid hesitation, and accountants are crucial in steering clients toward this.
Even for accountants and financial professionals, the mandated use of digital tools can be polarizing. But that doesn’t mean accountants shouldn’t practice what they preach and embrace technology adoption – which can result in serious benefits for their own practice.
Digital transformation enables greater efficiency for any business, including accountants that have been heavily reliant on manual processes and spreadsheets for so long. More specifically, automating processes can save time on paperwork and avoid human error in bookkeeping. It also allows accountants to advise clients and build vital relationships, rather than losing time to mundane and repetitive tasks.
In addition, knowledge of new digital processes, and how clients can optimise them, is key to ensuring small businesses and advisors thrive in the future. Without this understanding, they may fail to help clients drive positive, tech-enabled improvements in their finance function.
Kat Bond is Head of Accounting Partners at Xero
Unleashing the value-add accountant
For both accountants and bookkeepers, automation is a key example of how technology can make work more efficient. New regulations that encourage the use of digital software and automation, like MTD, may highlight the advantages of digitization, but it is only the tip of the iceberg.
Accountants are exploring more advanced technologies, like artificial intelligence, to experience them first hand – in fact, the use of AI in the accounting market is expected to grow by 30% over the next five years.
In practice, automation can support the day-to-day handling of financial data – especially when it comes to predicting trends and enabling accurate decision making for clients. Previously, an accountant might spend hours trawling through data sets, but AI can now take the reins.
While skepticism remains around the role of automation, there are many examples where it can enhance human work, allowing greater autonomy for accountants who can focus on the tasks that they excel at – like providing counsel for clients. It gives them more time to interpret data, instead of identifying trends in spreadsheets, resulting in more time focused on providing recommendations and resolutions.
It is important to understand how all this contributes to speeding up accountants’ work and the competitive advantage that could provide. Accountancy firms with these tools in place can benefit from more versatile and efficient client servicing.
The forward-thinking accountant and bookkeeper
Accountancy may be evolving, but it will always be relevant. From the perspective of those in the industry, a hesitancy to introduce automation and other technologies into daily processes is understandable.
But there is too much upside to ignore. These technologies allow accountants to spend more time strengthening client relationships and establishing themselves as true business advisors. There will never be a need for accountants to hand over control completely because clients want to work with accountants they trust – and that demands the human touch.
It is easy to see the implementation of new technology as a hurdle rather than a forward-looking investment, but it’s an opportunity to enhance and future proof existing processes, while setting an example to clients facing regulatory change.
New tools are paving the way for accountancy practices that are applying automation in innovative ways. Now is the time for accountants to kickstart their own digital evolution, rather than being led by legislation.
