The role of the Business Adviser
The upcoming influx of artificial intelligence in the professional services sector is set to throw the role of the accountant into turmoil, removing what were once secure job positions as well as creating new opportunities for work. Where there was once compliance there will now be advisory.
The continuous uptake in cloud accounting by small and medium sized businesses, competition between software suppliers and the ever-expanding interconnectivity of digital solutions is making compliance easier to provide. Digital VAT compliance with HMRC has been available for a while via direct reporting from software to the HMRC website. This will soon be made compulsory and joined by business tax via Making Tax Digital. RTI reporting has made payroll reporting to HMRC more dynamic, although it can be argued that systems on HMRC’s side still need improvement.
So far, payroll has generally been handled by dedicated providers due to the complexity in this area. The upcoming linking of HR systems and payroll software for small businesses will soon make this far easier and enable self reporting in this area for a far wider population. Digitally reporting the annual statements to Companies House has been possible for a while but restrictive due to the cost and complexity of the required software. These cost barriers are now being removed as the connectivity of cloud services are embraced by suppliers and made user friendly. As all these areas become easier to operate, compliance will become user controlled and with enhanced AI eventually automatic. This will make users reliant on how software has been setup rather than how an accountant reviews their data. In a way what has historically been referred to as compliance is set to be replaced by IT support.
Of course, this will not happen overnight. Firstly, although in the pipeline, the software is not currently there to support all these solutions. In addition, once implemented there will be a time lag on uptake with businesses and advisors resistant to change. Inevitably over time this will become the norm and the compliance role of the accountant will disappear.
So, what next?! Will we see a massive redundancy program throughout the industry or will these jobs be replaced by other roles?
As history shows the latter is far more likely. With compliance gone accountants can focus on their “value-added service”, which is advising businesses and providing assurance. The time saved completing forms can be replaced by a greater review of processes, if required, and providing on-going current advise. The historic trend in reporting on what has been will be replaced on guiding businesses through what will be.
The ability to look at financial data in real-time, utilising software that uses historical trends, contract terms and forecasts to predict near future events, will enable accountants to be pro-active and provide advice on the fly rather than upon request. The role of the outsourced finance director then becomes available to all, scaled to meet the needs of the business it is provided to.
So will all accountants then become business advisors?
I think this is dependent on the size of the firm the accountant is operating from. Small firms and sole traders will still require the accountant to cover all areas, putting ever greater strain on the breadth of knowledge that is required. As we have started to see this is likely to push these businesses into specialist niches focussing on specific software to advise on. Larger firms are likely to see a split internally with individuals hired and trained to be business advisors and others to be systems operators and analysers. In both cases this is likely to force the industry to specialise further.
So what should a business owner be looking for in their accountant of the future?
Firstly, pro-active advice is as important as it was before. An attentive advisor is most likely to ensure your business is ready for transition to the digital age and be providing the support your business requires. Secondly, ensure they are cloud prepared, i.e. they have awareness of the programs and have an internal team (whether it be themselves) that is ready to support a business. Thirdly, ensure their specialisms match yours. A greater trend towards niche areas may mean that your current advisor will no longer have the ability to support your business as it develops.
For more information or if you would like to discuss any of the above further, please contact Ryan Pearcy or speak to your local advisor.