What are the threats and opportunities of increased automation in accountancy?

After I recently delivered a talk about the future for accountants I was asked a popular question: Do you see increased automation as a threat or an opportunity for accountants?

I explained that I don’t like giving a simplistic answer – although, if forced, I would have to say that automation, as ever, presents greater opportunities for accountants than it does ‘threats’.

Let’s start by clarifying what we mean by ‘automation’.  For the purpose of this blog post I suggest that automation means new technology that is becoming increasingly accessible. It offers to automate much of the bookkeeping and related compliance services historically provided by Accountants. Automation also affects a wider range of activities that accountants can provide to clients.

Accounting automation includes a range of technology that involves Robotic Process Automation (RPA), Artificial Intelligence (AI) and Machine Learning technology. The increased automation we have seen in recent years is just the start of a major change. Previously we saw a dramatic simplification of workload through the introduction of electronic calculators and then spreadsheets – the latter then also spawned new opportunities to deliver more valuable services to clients.

I certainly see elements of increased automation as a threat to accountants’ ability to earn good money for simply helping clients with compliance work.

But, much more than this I see increased automation as providing increasing opportunities for accountants. This is because, within the next few years, RPA and AI will free up more accountants who currently feel compelled to focus on compliance work. New tech and automation also has the potential, again within just a few more years, to simplify the provision of a wider range of advisory and support services.

In more detail:

Increased automation is a threat to accountants because….
….clients who use cloud bookkeeping with direct bank feeds and online receipt capture facilities will need less help from clients to prepare annual accounts and tax returns;
….increasing numbers of clients will respond to adverts and start to use cloud bookkeeping systems without talking with their accountant – and will then move to an accountant who specialises in clients who use that system;
….some junior staff and bookkeepers will be replaced or made redundant by the new technology that automates work they did previously;
…accountants who do not start to provide further services to clients will need to find and secure many more new clients to maintain income levels as the fees chargeable for compliance work fall;

Increased automation is an opportunity for accountants because….
….those who embrace the cloud will be able to attract clients who choose to use a cloud bookkeeping system from those accountants who have not themselves embraced the cloud;
….accountants can earn good fees for helping clients to move their systems and processes into the cloud to simplify compliance with MTD;
….accountants can evidence more value to clients through advising them re related add-ons, extensions and applications that integrate with their cloud bookkeeping service and that will help clients run their businesses more effectively;
….it means more real-time accounting information will be available thus allowing accountants to provide more real-time business advice (and to get paid for this);
….in time accountants will be focused on forward facing advice for clients (which is generally more fun), rather than only reflecting on the past;
….so much of the new tech out there enables accountants to run more productive and professional practices, with better systems and processes  (eg: fee quotes, client onboarding, practice management, billing, client relationship management etc)
…increasingly greater business insights and analysis are available through software solutions and which accountants can use as a basis for the provision of strategic business advice.

I should add that many of the predictions about the impact of cloud computing and automation generally within the profession have been around for years. Back in 2009 was when I first debunked such predictions as being premature and ill-informed. A lot has changed over the last ten years and NOW I believe we are approaching that ‘tipping point’ that others predicted would happen some years ago.

I don’t pretend to know when we will really feel the shift and the impact of increased automation. It has been gradual to date. But I am sure that  within the next few years we will see more of a shift than ever before.  It will be faster and will have more impact than the many changes that the profession has faced to date.

Accountants in practice have a choice. Worry about the threat or take action and embrace the opportunities. One thing is for sure, you cannot force fit the future to your current business model.

By |2019-07-02T08:23:57+00:00July 2nd, 2019|Accountants, Cloud accounting, Future|

About the Author:

Mark Lee FCA is an accountancy focused futurist, influencer, speaker, mentor, author and debunker.

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