‘Many commentators seem almost contemptuous when talking about accountants who focus on the provision of compliance services’.
That is the first line of a post I wrote on this blog OVER TEN YEARS AGO in June 2009. Back then I, quite justifiably as it transpires, predicted that those commentators were being unduly pessimistic.
Even today, now that I can see that compliance work will become cheaper and less valuable within a few years, I still accept that there is a place for the compliance focused accountant – for now.
As I said back in 2009, if you have an established practice and know your clients well, you are not suddenly going to lose a swathe of clients who all decide to rush off at once.
About the only thing that could cause a speedy dissipation of your client base would be widespread publicity of your incompetence or negligence. Any other changes to your client base will be sufficiently gradual for you to take steps to stem the flow as and when it becomes necessary to do so.
Of course the better prepared and ready you are for such changes, the faster you will be able to adapt and evolve. I do think it will be evolution rather than revolution in this regard.
What will change first and fastest in my view is your ability to win and retain new clients if you and they are focused on compliance services. That means tax returns, bookkeeping, VAT and accounts preparation.
So accountants who have happily built their practices around compliance services do not need to start trying to expand their services – unless they want to remain in practice for more than a few years.
Over the last decade, and especially in the recent years we have seen a dramatic shift towards cloud accounting and this is starting to have an impact on fees and on the ability of traditional accountants to win new clients.
But that impact is nothing compared to the wider consequences that will follow over the next few years as our software tools employ more AI to speed up the whole accounts production and tax return process. One development here is becoming clear. When you already have a client’s accounting data in the cloud to comply with MTD for VAT, you have less of a problem with gathering the data required to complete clients’ SATRs.
Back in 2009 I noted that, for most firms of accountants, there needs to be something equivalent to a burning platform before there will be a consensus for fundamental changes in the way they operate. And in any move away from a reliance on compliance services.
In 2009 I suggested that few partners accept and believe that forthcoming developments will have such a big impact. In 2020 I am very happy to help open their eyes, as that burning platform may be going up in flames sooner than they think.