There has to be a special reason for me to include an interview on my blog. On this occasion I wanted to follow up on a conversation I had with Phil Dewar Durie after I spoke at a recent conference for an international association of accountants.
Something he said quite excited me – so I asked him if I could share his views here. Phil is UK Account Director at Silverfin and I would be interested to know if you share my excitement – which relates to Phil’s final answer to my questions below. Before we get to that though I have asked Phil to share his views on a number of related issues including the move to what he calls ‘connected accounting’.
Mark: As we move further into 2020 do you see the accounting sector changing its approach towards technology in the near future?
Phil: I think all professional services are experiencing significant transformation from technology. There is a lot of discussion within the accounting sector about how digitisation and automation are changing the profession and client services. We believe that this creates significant opportunities for the firms who embrace change and risks for those that don’t.
Mark: Indeed. I feel the same way. In my talks I often reference The World Economic Forum’s description of what they first suggested was ‘the fourth industrial revolution’. What’s your take on this?
Phil: I’m seeing a global shift towards digital working, online collaboration, software automation and big data that has the ability to improve the efficiency of core processes and create whole new services. It’s a time of unique change, and this innovation is driving some of the key trends within the UK accounting industry today.
Mark: Again, I have to agree. Tell me about some specific trends you’re seeing in the UK accounting profession.
Phil: Most of the firms we speak with are motivated by the need to create client value – to reach beyond compliance reporting into using data to support the delivery of advisory services. This is driven by business owners with ever increasing expectations of more timely, actionable, business information that allows them to either mitigate risk or capitalise on opportunities.
Mark: Can you be a tad more specific?
Phil: We see firms in the UK focusing on three key objectives:
- Restructuring their business model to increasingly focus on delivering value-add advisory services. In a recent survey we did we were told that 76% of respondents believed this would be their main revenue line in five years (with only 14% seeing it as key today);
- Generating internal efficiency through standardisation and automation of core accounting processes or workflows; and
- Focusing on becoming the client’s trusted financial advisor, and using technology to deliver data-driven advisory services.
Mark: That’s good as it ties in with the advice I share in my talks about what firms need to do in the immediate future. What’s your advice in this regard?
Phil: We believe those three key objectives are connected, and can be achieved in tandem if innovation is embraced both when reviewing internal processes, but also when considering the myriad of new technologies available to accountants today.
For example, cloud bookkeeping systems have allowed accounting firms to access their clients’ data in realtime, however, we find that most firms’ internal accounts and tax systems are still offline.
Mark: That’s so disappointing to hear but ties in with my own experiences too. That is another big move that will happen before much longer. Do you have any more advice for firms?
Phil: We are starting to see accounting firms look for solutions which allow them to better integrate client data with their internal technology stack. This allows them to reduce the amount of time spent working offline and increase efficiency, however, it requires a new approach to the traditional accounts preparation process.
As firms strive to deliver greater value to their clients, we also see many look at how they can use the data they have to support their advisory services. This can allow firms to offer clients data-driven insight from real-time financial information and enables the type of strategic planning and financial modelling businesses require to grow whilst avoiding risk.
All of this is enabled by bringing data directly into a cloud platform that allows accountants to seamlessly access real-time client data and use it to power all of their core accounting, tax and advisory services. We call this connected accounting.
Mark: Ah, yes. This idea of ‘connected accounting’ was one of the topics that prompted me to talk with you. Tell us more.
Phil: Success in the future will come to those firms that use technology to connect real-time client data with automated workflows or processes. Then collaborate, and communicate, with clients to get their compliance work completed efficiently. This frees up valuable time to invest in understanding their clients’ businesses and using the data and insights their technology provides to power their advisory services. All achieved within one, integrated, cloud accounting platform.
There is a fundamental shift in purpose for accounting firms from delivering a transactional, compliance service to the creation of an advisory relationship founded on a deep understanding of the data that drives their clients’ businesses and insight gained from that.
Mark: It’s probably obvious to most readers of my blog but can you explain more about why this will be beneficial?
Phil: We believe connected accounting will transform the way accounting firms work. It will improve the quality, speed and competitiveness of the compliance process and make it easier to deliver advisory services that will unlock new revenue streams and deepen client relationships. Importantly, it will also mean firms can attract, and retain, the best talent and give them the tools they require to deliver the advisory services and insights their clients really value.
Mark: One challenge that firms still face though is that many of their legacy clients – and prospective new clients – are reliant on different systems. I believe that Silverfin has a solution for this?
Phil: That’s true. A firm’s clients will use a range of bookkeeping and other financial systems – even paper files that need digitising and storing. Silverfin consolidates that data and stores it in one central and secure cloud platform irrespective of the source. We even make it possible to have a real-time connection to these data sources. This means clients can use the systems they want but the accountant can work on just one platform of their choice too.
We also ensure that all data is stored in the same format. No matter where the data comes from, and how it is presented in the original source, Silverfin stores everything in a standard and uniform chart of accounts. This makes working with the data easier but it also means workflows can be automated. With our templates for common accounting workflows and processes, and the ability to develop their own on the platform, accountants can use their data to move quickly, and accurately through accounting work.
Mark: And I’m sure that also helps with staff training and makes it easier to review work by reference to standard processes and systems – regardless of the original source.
Many thanks again to Phil Dewar Durie. UK Account Director at Silverfin.
For the record: I have not been paid for this blog post nor am I expecting any reward should readers seek out further information re Silverfin.