Accountant evolution: from number crunchers to business advisors

Now, this problem is being eliminated by cloud-based accounting systems. Progressive accounting firms are harnessing the power of the cloud to transform their services and their relationships with their clients. This signifies the end of the ‘rear vision mirror approach’ to accounting.

The heart of cloud accounting systems is the shared or common ledger where both the SME client and the accountant have real-time access to the same accounting ledger residing on cloud based servers. These systems are enabling accountants to prepare annual financial statements direct from the client’s ledger thereby eliminating the time and cost of transcribing information into their own systems. This is only one aspect of the efficiency benefits.

At the same time that cloud accounting systems are becoming commonplace, bank transaction data feeds (more commonly known as bank feeds), pioneered by MYOB BankLink has become an expected feature of cloud accounting solutions. Bank feeds – turbocharged by the increase in EFT transactions – eliminates data entry and improves accuracy by memorising how particular transactions are processed within the software.

Many accounting firms have embraced bank feeds or are contemplating re-entering the bookkeeping space since bank feeds allow them to efficiently process transactions. Being directly involved in bank reconciliation improves the accuracy of the information that then enables significant productivity improvements in BAS and year-end compliance processing.

Cloud accounting systems also provide an opportunity for clients and accountants to share accounting responsibilities. Clients are primarily concerned about invoicing and transactions involving inventory movements. They can process those transactions while the accountant processes the financial transactions.

Further innovations are occurring such as accounting firm web portal services where clients can upload scanned images of their paperwork. Optical character recognition (OCR) engines then interpret these images ready for automatic processing into the cloud accounting systems.

While more efficient and accurate processing is a key benefit of cloud accounting systems, many firms are already extending their service offering and enhancing client relationships. Real-time data provides the opportunity for the external accountant to become the external CFO for the business. They can cross-examine up to date client data at any time and provide proactive advice to clients on issues that are occurring in their business before they have been recognised by the client.

A weekly review of the client’s finances might reveal issues with debt collection, falling margins, cash flow to meet key obligations such as payroll, tax and superannuation. Clients will appreciate the involvement of their accountant to keep their business on track and, many believe, will be far more willing to pay for these CFO services than they are for annual tax and accounting compliance services.

This is just the beginning. As cloud accounting systems mature, new opportunities will emerge. Big data technologies to mine databases will be incorporated into these systems to reveal trends that cannot readily be seen from a simple review of the numbers.

These big data technologies, mainly utilised by large corporations, will scan cloud accounting systems for trends across businesses and reveal to individual business owners and their accountants comparisons with others in the same industry. It will also reveal trends in product sales or inventory management that provide a guide to business owners as to how they can fine turn their business.

The accounting industry will face many challenges as their industry continues to transform. It is likely that greater automation will bring down compliance processing prices and put pressure on margins. Finally, firms that are willing to invest in the technologies, skills, development and process re-engineering will experience significant opportunities to transform into the key business advisor to their clients.