“….computers are compliments for humans, not substitutes. The most valuable businesses of coming decades will be built by entrepreneurs who seek to empower people rather than try to make them obsolete.”
~ Peter Thiel, Zero to One
You’ve probably heard for years that accountants need to adopt new technologies. Most accounting professionals have heard (or perhaps even said ourselves) how technology will impact our industry. Futurist conversations tend to include buzzwords like artificial intelligence (AI), machine learning (ML), bots, blockchain, cloud, and automation and how they could, in theory, dramatically alter the landscape of accounting.
As a former CPA turned accounting technology startup Founder and CEO, I can unequivocally say that those developments aren’t just buzzwords. Those conversations aren’t just theories. The impact of these technologies on accounting is inevitable. That said, you don’t need to run out and invest in robots tomorrow. Industry-wise, it will be a slow progression forward.
Multiple inflections are required to drive mass adoption of new technology. Some of the technologies listed above (the cloud, automation, etc.) have been pushed to multiple inflection points because of Covid-19, while others (AI, blockchain) are still very nascent and have yet to truly hit the technology inflection point, where the technology actually does useful things in an efficient manner.
We’ve all witnessed the splash these technologies make as they emerge, followed by dramatic forecasts of “boom or doom” related to their impact on accounting. Typically as new technologies develop, we see a few notable early stories followed by either high-profile failures or very slow, low-impact adoption that feels more evolutionary than disruptive.
While it can feel easier to ignore until it’s mainstream, do not let the speed of adoption or the early-stage nature of some of these technologies entice you to sit still. Very few accounting firms need to be first movers in a new technology, but that doesn’t mean you should ignore it altogether. Certainly, the stability of our industry allows you to be more selective in the tools you choose and how you implement them, but in order to remain competitive and valuable, accounting firms do need to adopt and implement proven technologies.
Much of this book is focused on the fact that no matter what technology or reporting your firm uses, nothing is close to as valuable as the financial consultation (the “therapy”) you provide to small business entrepreneurs. And while I clearly believe in that statement enough to write a book about it, that doesn’t discredit the need for technology. Do not let this fact dissuade you from incorporating the right technology into your practice.
Accounting firms who recognize the power of consultation combined with technology will benefit from more streamlined operations, more satisfied customers, and more valuable businesses. The right technology establishes credibility with small business entrepreneurs. And the right technology makes your firm and your staff more efficient. Here’s how to leverage technology to get there:
Use Technology for Credibility
While it’s not news to any of you that the days of a good business card and printed monthly financial statements are gone, it is true that the idea of a complete overhaul of accounting and reporting is also overblown. Most small business entrepreneurs still want a relatively standard financial statement package.
Accounting firms do not need to be on the bleeding edge of technology, but in today’s fast-paced business environment you also cannot fall behind. Your web and social media presence should be clean, concise, and moderately current. You do not need to be overly innovative here, but you can no longer get by with your website from the 1990s or 2000s. More importantly, the method you use to share financials with clients does not need to include heavy business analytics engines, but it does need to be in the cloud.
One important opportunity that the best firms are beginning to take advantage of is whitelabeled reporting platforms. This is an easy way to modernize, and you build instant credibility with your clients when they see your logo on a modern cloud-based web and mobile application. Whitelabeled platforms are also a more affordable option than the previous alternative of building your own branded application, a process that requires engineers, computer scientists, and millions of dollars of investment. Instead, most whitelabeled tools can be purchased on a monthly subscription for a nominal fee.
Today, a whitelabelled application is a great way to separate yourself from the average accounting firm; in the near future, it will be table stakes.
Use Technology for Efficiency
Staffing has been the biggest challenge for accounting firms for most of the past decade, and it’s a predicament that’s two-fold.
First, the sheer supply of accounting talent is scarce. Second, the desire among professionals to do meaningful work that involves creativity and ingenuity makes many of the routine accounting process roles non-desirable.
The number of accountants I hear from who say “I am turning down business because I cannot staff the work” or “I cannot retain staff” or “my staff refuse to do bank reconciliations all day” is high and growing.
These are all concerns that can be solved by technology. I don’t mean outsourcing entire jobs to bots — again, automation and bots can do a limited number of tasks very well, but technology is nowhere close to replacing the accounting professional. I mean leveraging technology to empower your team. And leveraging your team to get the most out of technology (you can automate many routine tasks, but automation does not work without oversight).
The right technology will improve the efficiency and capacity of your team. It also makes the types of things your staff work on more interesting! This is an underappreciated component of the benefit of automation technology: A motivated and engaged team is hard to measure but has a huge impact on your clients satisfaction, your profitability, and ultimately the value of your firm. While we are still in the early stages of AI and ML in accounting, automation of routine tasks works well and is something the best firms are already using.
If you’re not on-board yet, it’s time to research, select, and implement automation to augment your team now. Ceterus is here to help, so call us today!