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The Future of Accounting is people. It has, and always will be.
Full disclosure: there’s a strong possibility that nothing I say here will be relevant in 5 years. We can all look back at this blog and laugh. That’s just the way things are. Long after you’ve read this, most of these points will no longer matter but the debits and the credits will still be there, alongside Queen Elizabeth, Keith Richards, and of course, death and taxes!
“The Future of Accounting” is perhaps one of the laziest and most cliched headlines out there when it comes to opinion pieces in the industry. It tends to be part clickbait, part prediction; and there’s also a certain hint of fearmongering embedded into these articles by the author. We see this topic regurgitated ad nauseum on LinkedIn, and copy/pasted into the free magazines at least once a month. If you work in any form of bookkeeping, accounting, tax or payroll, chances are that you’ve been fed this sermon over and over like a foie gras goose.
The usual bullet points in a ‘Future of Accounting’ op-ed:
Let’s talk about these, really quick.
Technology underpins everything, and change is a constant. Knowing that technology changes every couple of years means that we can anticipate and plan for it, making it easier for us to adapt and grow. Yes, it can be scary – but those that embrace it tend to succeed. Keep an ear to the ground when it comes to tech.
Next is Artificial Intelligence. Things like RPA and Machine Learning are great, but they’re not that great… yet. Plus, someone in the finance team needs to guide them and feed them and pet them and make them feel safe and warm. The first generation of AI wrangling is most likely going to be somewhere near the accounts payable/accounts receivable area, and I think we should celebrate it: no more manual entry for AP clerks! AP won’t have to beg for remittance advice anymore! REJOICE!
Blockchain is cool, and we love it at Xeta. It’s brilliant, but people who are afraid of transparency and truth aren’t so keen on it. The big joke is that it’s a ‘solution in search of a problem’. Great problems (like government tenders, trusts and tax) can be solved with Blockchain, but that would mean no more corruption allowed. Surely the politicians want a system that makes everything transparent, don’t they? At Xeta, we have one of the most sophisticated blockchain/cryptocurrency tax practices in the market, run by my very good friend and co-founder, Daniel de Wet.
Automation is one of those famous cliches in every “Future of Accounting” article, but this bullet point also seems the most pragmatic. I remember having to manually photocopy legal texts page by page, front to back, for hours. That was my Friday night in Manhattan, when I was an associate at a fancy, fancy big fancy firm. Now we can do double-sided, stapled-and-collated photocopies automatically. At Xeta, our contract management, billing, workflows and bank transaction feeds are guided by machine learning AI XBerts– and that’s just 1% of the things we automate. Our clients also enjoy automated accounts payable, automated bank reconciliations, automated risk analytics, automated collections, automated automations! It’s great!
But once again, someone has to design, manage and maintain these wonderful systems.
The Cloud? Yep – that’s an old one. There’s a constant argument about being safe and choosing online versus offline processing and data. Having hardcopies. Using your hard drive versus using your server. One of my respected leads is adamant that he wants offline software only, to be safe in case the internet drops or something worse. I’m fairly blasé about the cloud – it hasn’t failed me yet. Most of the best tools we use are cloud-based. Xeta’s on Windows, Mac and Linux (We use Arch, by the way). We have sophisticated finance technology stacks, and we consider accounting/tax/law to be syntax to the computer engineering and integrations we’ve designed. My opinion: distributed online servers (the cloud) are here to stay, and to a certain extent will replace offline storage. Companies will keep their data on their servers, and employees/consultants/3rd parties will only be able to tap into the datasets via secure authorization – they won’t be able to keep someone else’s data on their own machines. I also think that society has made its choice, and the internet will become a basic human right in the next few years.
There’s a pattern here, and most of you would have guessed by now that it’s all about the people. The Future of Accounting is dependent on us, the human beings that guide it. I think the demand for accountants (in all shapes and forms) is going to increase. Technology is changing the shape of work, not the weight of it.
Time-based billing will fall away. Gone are the days of partners and firms habitually overcharging clients with ‘overruns’ every month. Everyone knows that computers are doing all the heavy lifting, and that the 6-minute billing increments are just there to pad their profits and superannuation funds. The interns will be singing from the rooftops: “no more timesheets, hallelujah!”
Multi-disciplinary training in technology, computer programming and software implementation will be the de-facto standard, alongside the accounting standards and tax legislation. Every person in the finance chain, from bookkeeper to accountant to tax agent to the partner, needs to upgrade their academic learning and step up to the plate – the intersection of accounting & tax knowledge, commercial applications and the underlying technology needs to be balanced perfectly.
Clients want more meaningful relationships with commercial sensibility, not slide decks or presentations. Clients are gravitating away from commoditized services at the low end, or prestigious (read: expensive) brand names at the top end – they place more value than ever on understanding, patience, advice, and support. When clients have to beg partners for a 20-minute timeslot available in 3 weeks’ time to ‘have a chat’, you know that their accounting firm doesn’t treasure them as a client.
Old-school accountants have been on the treadmill for a long time, spinning their legs furiously yet going nowhere. A lot of the senior managers and partners in accounting, audit and tax firms are tired, out of shape and working 16 hours a day. They’re stuck on the treadmill, and don’t know how to get off. For firms whose business depends on them being slick management consultants and thought-leading business strategists, it actually doesn’t seem like it. They lack scalability, feasible growth plans, and the support needed to move their day-to-day experience into the next level. Running on a treadmill 16 hours a day is not sustainable, and you end up going nowhere.
We provide a lot of assistance to our clients, but if anyone in the finance world is looking for help – reach out. We’re on LinkedIn and the other social media channels.
The Future of Accounting is people. Technology is a tool that we can embrace and improve our lives, but we need to embrace people first – our clients, our teams, ourselves.
Put yourself into your client’s shoes. What would you expect from your accountant if you were a small business? Do your bookkeepers actually understand your business? Would your consulting CFO even know how to manage your business if you weren’t around? What matters the most to the signing partner: their charge-out rates and timesheets, or solutions that support and grow YOUR business? Answer these questions honestly, and you can transform your firm into a powerhouse – and finally get off that treadmill.
Zander De Klerk, Managing Partner at Xeta
Zander De Klerk is a founding and managing partner at The Xeta Group Australia Pty Ltd. He is an ex-director from the Big 4, having worked over 12 years across capital markets in Africa, the United States and Australia. Xeta was started in 2019 and has quickly grown from a boutique accounting & tax firm into small-to-midsized professional services firm. In 2021, Xeta was awarded Gold Champion Partner Status by Xero.