The rise of the robo-accountant

The rise of the robo-accountant

There is no truth to the rumour that accountants will be replaced by robots soon, but robo-accountants are coming. Luckily Mark Lee, accountancy-focused futurist and mentor, has a plan for future proofing accounting practices against them.

Lee, who recently spoke at South African Institute of Chartered Accountant’s (Saica) Cloud in practice conference, admits that the future of the accounting profession will change drastically through robo-accountants and software, but says none of this is a replacement for human accountants.
“While researching this talk, I came across an article by Jeanne Viljoen, Saica’s project director: practices, on this very topic, and I agree with her that computers and algorithms may increase accuracy when it comes to number crunching and processing vast amounts of information at an increasing speed,” says Lee.

“But they have no feelings and cannot learn common sense or the ability to plan creatively and cannot deploy human judgment or professional scepticism. And insights, support and advice are all things that future accountants will still get paid for, even if robo-accountants will be doing most of what general practice accountants do in 2018. Clients recognise these skills to be valuable, and they are willing to pay for them.”

Artificial intelligence

Referring to a variety of systems that use artificial intelligence (AI) and which are already widely in use in accounting firms, Lee admitted that new systems are simplifying bookkeeping for both small business owners and for their accountants. “But none of these developments has revolutionised what accountants do in practice.”

Adding the ability to process and analyse big data as well as other new technology will revolutionise the accounting profession, confirming that robo-accountants are definitely a future power to be reckoned with. “New technology will mean that the nature of your work will change, as will clients’ perception of your work. In practice this means that the work accountants do to earn good money will evolve.”

Lee says that the changes currently experienced by the accounting profession are not unprecedented. He told the audience how comptometers were still used when he started training as an auditor in 1977. “Then came pocket calculators, 16-column analysis pads, spreadsheets and word-processing systems and very basic DOS computer programmes.”

Secretarial staff components at modern day accounting firms are also significantly smaller nowadays, says Lee, adding that it’s hard to imagine life without email, smartphones and connecting via the cloud. “These changes were quite revolutionary, and changed how we did work for our clients, but not what we did for them. The core of our services remained bookkeeping, accounts, tax returns and audits.”

The impact of robo-accountants will mean more changes, and the impact will be different for each individual accountant. “Four different perspectives will play a role: your firm, your staff, your clients and your work. Factors like age will play a role. For instance, many younger staff members will want more flexibility and will have shorter career paths. New skills sets are needed – for instance, accounting practices already need IT staff. Your clients will also have different preferences when it comes to communication, e.g. video or virtual meetings instead of face-to-face meetings, or communicating via Whatsapp instead when you have younger clients.”

Add to this that changing compliance needs and the fact that younger clients might not be as happy to pay time-based fees as older clients, and it’s clear that accountants of the future will have to relook their future way of working. While no robo-accountant can ever replace the human touch, Lee warns that the future accountant will have to be more human and more visible than ever before.

“You will be expected to inspire what your best clients want now: trust, confidence and peace of mind. Clients will want evidence of your expertise and insights beyond that generated by AI. They will require you to hold their hands and interpret what the robo-accountant software generated.”
According to Lee, this will have an impact on firms, requiring a flatter staff structure with fewer junior staff. “It is very important to realise that you cannot force fit the future to your current business model. In this instance, the past is not always a good guide for the future.”

But there is hope for those fearing the rise of robo-accountants. “They can be beaten by improved systems and service delivery in practices. Accountants will have to focus on the impact they make and their ability to identify the gaps in the service their clients need.”

Future-proofing your firm

Lee says it is possible to start future-proofing your firm against robo-accountants by doing a few basic things in the next few years. He suggested accountants need to focus on three time frames at once. So during the next 18 months, firms should start by developing (or expanding) their business advisory services for current and new clients.

“If you haven’t done so yet, move your practice bookkeeping into the cloud. It’s only then that you will really understand what it’s about and that you’ll be able to help your client properly. Build a referral network with fellow accountants offering expertise that complements your own, as this can lead to mutual referrals. Invest wisely in new tech, AI and client apps. Ensure junior roles are appealing, as the war for talent is tough.”

Increasing your client contact and building relationships should be another focus for the next 12-18 months. “It is important to set clear service expectations right from the start. Also track internal workflows and key performance indicators – you get the behaviours that you are seen to measure and reward. Equally important is reviewing software choices and training your staff on how to get the most from what you have.”

During the next phase of preparing for the rise of robo-accountants – about two to three years from now – accounting practices must start planning to replace lost fees, increase services and fees, and drive innovation and growth. Lee said it is also imperative to assess external factors.

“For instance, advances in cloud computing as well as its widespread adoption will mean you will have to start doing things differently.”

Future drivers

“Your goals and ambitions need to reflect what we call ‘future drivers’. And as I frequently stress, a plan is a dream with a deadline. Don’t simply assume more of the same. Consider preparing ‘what if’ scenarios and plan for changes in your client base, service offerings and staffing. Ask yourself what talent, skills and experience will you need? Who should be leading for you on your choice of and adoption of robo-accounting software? Someone in their 50s or someone in their 20s?”

The third and final phase of future-proofing your practice requires you to plan for what will be happening in four or five years from now. “Review, revisit or restart your strategy and plans for the future. Not just what you want to do but also what you will do as things change. Make sure your goals are realistic whilst still being prepared to be patient and nimble.”

Now will also be a good time to focus on developing key business skills like value pricing, effective communication, commercial awareness, strategic business advice, business leadership and influence and persuasion. It is equally important to focus on continuing professional development.

“This will take you beyond the technical competence and auditing, bookkeeping, accounting and tax updates. Key business skills like predictive forecasting and insights, collaboration and relationship building, maximum exploitation of tech developments, cyber security and data privacy and practical visionary skills and ingenuity will definitely help you beat the rise of the robo-accountant.”

Source:  http://www.bizcommunity.com/