Accounting Industry – A change is coming, but not what it seems

Accounting Small Business

In December last year, the Australian Department of Industry released its inaugural Australian Industry Report, sounding alarm bells for the accounting profession. “Bookkeepers and accounting and auditing clerks” are earmarked as one of the “Jobs most at risk of being automated” – at almost double the risk of the next profession.

There’s no doubt technological change will have a profound impact on the accounting profession, changing the role of accountants as middlemen. Add this to ATO’s intention to cut $500 million in accounting fees as the tax office streamlines its procedures.

Some say changes to the accounting industry, coupled with the increase in small businesses moving to automated cloud-based software systems, will reduce the need for accountants. But others disagree.

Whilst the impact of software automation across many professions features heavily in the Australian Industry report, Dan Fairbairn from Waypoint says only parts of accounting and bookkeeping are vulnerable to automation.

“Automated accounting for start-ups and small business owners is not a bad thing,” says Dan. “Accounting software records financial data that enables business reporting such as profit and loss statements and balance sheets. It also enables management of other financial areas such as accounts, inventory and payroll.”

According to Fairbairn, automated, cloud-based accounting software allows accountants to spend less time and money on bookkeeping and data entry to prepare accounts and tax returns. Money saved through accounting software automation frees resources that can be re-distributed towards higher value services.

Software should be considered a business tool, and this is where accountants will always add value – using their expertise to assist business owners with financial reporting, tax planning, financial data analysis, asset protection, business valuations and succession planning.

Greg Hayes from Australian and New Zealand accounting firm Hayes Knight recently hit out at the idea that automation will slash accountants’ revenue.

“… the market doesn’t trust the ATO and that’s one of the reasons the market engages professionals,” stated Hayes. “You have a regulator and the regulator is there to do a job, that’s fine; you have business owners who run their businesses; and you have professionals who stand between the regulator and business owners.”

Hayes said accountants have always been the business owners’ trusted adviser, and will continue to be.

“You can’t automate relationships and you can’t automate trust.”

The skills of a small business owner or entrepreneur add value to the performance of the business, but this is not through trying to be what they are not – an expert in tax or accounting. Leveraging the significant power of cloud-based accounting software can maximise efficiency and productivity. This also means utilising the expertise of an external accountant to enhance the overall performance of the business.

The accounting industry is in for a change, but with change comes opportunity. An opportunity for financial consultants to provide valued services that transform their role from tax accountant to trusted strategic business advisor.