4 Steps to Prepare for the Future of Accounting
Time is running out to start getting ready for the technology-transformed, new-world accounting profession that is evolving at an increasing pace.
What changes are coming? What steps should be taken to prepare? What should I be doing now? Is it too late?
As with all major evolutions, the change within accounting will not happen all at once, so it's not too late. However, the pace of change will continue to accelerate so you need to get moving so you don't fall behind. Here are a few steps you can take to ensure you are ready when the technology is.
1. Get on the cloud
Perhaps the most important cloud benefit is the anytime, anywhere access to data and computing resources it provides. When you give your clients cloud-based access to real-time financial reports, they can make operational decisions based on up-to-the-minute information from their accounting system. Cloud technology also allows you to provide constant monitoring, rather than intermittent analysis whenever information is shared with you. In a world where you can start an episode of your favorite TV show on your computer and finish it on your phone, shareability and connectivity are essential parts of our daily life. Cloud technology provides those.
2. Understand automation
Perhaps the biggest sea change facing the accounting profession is the arrival of computational power that could make data entry obsolete. Artificial intelligence (AI) is the technology leading the charge in this regard. All of the Big Four firms are already using AI in varying ways. In the news, one of the most frequently discussed use case scenarios for AI is the self-driving car. You put an address into a GPS program, and the car's AI calculates the best way to get you there based on factors such as driving patterns, wait times, and accidents.
As accountants gain access to automated, real-time reports of client business data, they will gain the ability to provide actionable insights clients can use to run their businesses more effectively. To take advantage of this opportunity, CPAs will need to develop new processes and procedures in their practice to determine which data are automatically entered into the accounting system and which data require manual input and or adjustment. The less time CPAs have to spend reconciling the figures, the more time they have to focus on helping clients grow and succeed. To best do this, CPAs should ask questions and do research to develop a deeper understanding of their clients' business. CPAs armed with the proper insights and information can better advise clients with forecasting, managing their cash flow, evaluating the viability of a merger or acquisition, or creating a new service line in their business.
There's a pricing impact to this as well. We, as a profession, have based our prices on the time it takes to do something, rather than on the value of the answers we provide. Clients, however, are much more interested in the value of the information their accountants provide than in how much time it took to access. The hours-intensive data entry of the past is not the way accountants will provide value for their clients in the future.
3. Start considering cryptocurrency
Whether or not you have decided to invest time in learning the details of bitcoin, there's no denying that blockchain-based, decentralized cryptocurrencies will continue to play a major role in financial markets. As more and more businesses begin accepting these alternative currencies as readily as they do good old-fashioned dollars, having crypto-friendly services will become more and more valuable.
Merchant accounts, of which Coinbase is the most popular, give you the flexibility to accept payments in bitcoin or other cryptocurrencies, like ethereum, without having to assume the risk that comes with these new, volatile forms of currency. When you use a merchant account, you can instantly convert all payments received in cryptocurrency into dollars. Merchant accounts are becoming more and more commonplace, and accountants will need to know how to report for them.
In 2018, you probably don't need to dip your toes into the crypto-waters, but you should be prepared for potential client questions. Simply understanding how to process and report cryptocurrency will give you a huge advantage when it comes time to court or advise future-facing clients who believe in the potential of cryptocurrencies.
4. Keep learning and communicating
This piece of advice is evergreen, but it's especially relevant in a changing professional environment. As we have seen in the evolution of technology, it is not going to slow down, and we can no longer deny that future developments are going to affect the profession. Technology advances exponentially, which means that our professions (and our lives) have the potential to change more in a few years than they did for the entire working lives of our forerunners.
Keeping abreast of those changes, even the ones that will never come to fruition, allows you to communicate effectively with your clients and allay any fears about the future. This will ensure that you remain pivotal in the relationships with your clients because they feel secure that you are on the lookout for the latest trends and know how to advise them, or at least point them in the right direction.
The ever-increasing power of digital technology won't replace accounting professionals, but it will change the nature of our jobs. You might be excited by these changes or you might have a wait-and-see attitude, but either way you have to choose which path you are going to take. If you decide to look at these developments and grab hold of the future opportunity it affords, your clients will have the assurance that they chose the right adviser. Not only can you help them with what's happening today, but also with what's to come.
(Source: AICPA - CPA Letter Daily - CPA Insider - November 21, 2018)