The Future of Accounting

By in Accounting and Finance, Development, Technology

The recent Chartered Accountants Australia Survey revealed that in the future, employee skillsets, service delivery, and revenue streams would most likely change for accounting firms. Louis White asked Nikolas Hatzistergos, Chairman at William Buck, his views on the changes and the challenge he foresees for the sector. Here is the full story, parts of this commentary were also featured in the Australian Financial Review.

What fundamental differences do you see in the future of accounting?

With any type of disruption, there will always be winners and losers and there’s always opportunity. It’s really up to accountants to seize the moment, look at the opportunities and undertake the necessary initiatives.

More than anything, the value of historical information has changed. There’s greater demand for real-time accounting and current data – at the core of all this, it’s the data that creates opportunity.

How well firms respond to this opportunity and its effect on service delivery, revenue streams and employee skillsets will determine their success.

The use of Artificial Intelligence (AI) will see rules-based software accommodate high-end consulting services as well as automated audit tools and data interrogation capabilities. These changes will result in commoditisation of service delivery and the need to upskill and drive alternate revenue streams.

Open systems also mean there’s more knowledge in the hands of the client. Automated and intelligent software is affording our clients with more opportunity to interrogate their own internal data. The accountants will need to act as custodians of all the client’s data. Their ability to assist with data mining, data analytics and continually expand and improve offerings to their clients will be key.

How are they challenging the industry/driving it forward?

The future of accounting involves increased legal and regulatory complexity, global reach, technological implications and a new generation of work force. This requires new systems and processes, to accommodate new ways of doing and thinking. It’s these challenges which will also drive it forward.

Once upon a time, we were in the position to say, we know the financials better than anyone else and therefore, we are our clients trusted advisor. Moving forward, we need to be instrumental in being the keeper of client’s information – we need to become trusted advisors of client’s data.

If we don’t keep up, if we don’t become the organisation that becomes trusted advisors of client’s data, we risk becoming subcontractors to someone who does.

Our firm has embarked on the realities of the Internet of Things (IoT) and it’s a really exciting position to be in. In the past year we have invested 6.6% of our budget on scalable and dynamic technology.

Driving us forward are the automated processes of web 4.0, cloud computing for our firm and clients, customer relationship management (CRM), data analytics, smartphone technology, project and task management systems and Realtime data sharing.

The convergence of technologies makes us more agile, gives us more mobility and allows us to have meaningful collaboration across our network. At the same time, it increases our pace, improves our accuracy and transparency, and results in better outcomes for our clients.

With increased technology comes greater risk and responsibility; supporting infrastructure and risk minimisation strategies are critical to minimise cyber-attacks. As a firm, our uptake of infrastructure and software, along with cyber-training and digital policies help mitigate these threats.

How will employee skillsets need to change?

The future of accounting not only encompasses the changing skillsets of accountants but emphasises the redesigning of teams and diversity of skillsets across the broader firm.

While financial concepts and legislation will always be the cornerstone of accounting, accountants of the future will require a whole new skill-set surrounding big data and analytics, predictive behaviour, data security, governance and different types of consulting services. There will be a need for stronger understanding of technology, highly developed research skills and a lot more collaboration.

The changing landscape of increased complexity requires specialised skills, including technical and sector-specific expertise. This means teams will be redesigned and structured with the client in mind. While our people are experts in their chosen fields, they will no longer work in teams solely made up of accountants; they will made up of various specialities such as project management, I.T and engineering. This means firms may need to outsource capabilities, foster partnerships and strive for continuous learning and up-skilling within.

Artificial Intelligence (AI), will boost the accountant’s role. Greater transparency, accuracy and rational-thought of AI will mean focus on emotional connection with clients.

Workplace environments must also foster the natural skill-sets of the millennial and post-millennials who will make up the majority of our workforce in coming years.

Understanding how the new generation of workforce work, is just as important as harnessing those diversified skillsets. This includes creating environments that are agile, flexible, collaborative and entrepreneurial – which are also the essential skillsets needed.

Millennials and post-millennials natural creativity and curiosity are to be encouraged. Resilience is also needed. I foresee greater focus on personal development programs in emotional intelligence and interpersonal skills, as the lines between work and home are blurred. While we already recognise that our own brand is important, the new generation is already accustomed to building their personal brands through social media. I foresee that personal brand and firm brand will be intertwined. Our ‘Changing Lives’ Philosophy already recognises this approach and will be more relevant in the future; as we strive to promote a culture that is committed to ‘Changing Lives’ in everything we do.

Who should lead this change?

We can’t respond to disruption in silos, learnings must be developed in a Matrix from the beginnings of education and knowledge, to the executable.

Universities need to understand and relay what’s happening in the real world, to provide the fundamentals of understanding – the ‘why’ of the skills. CAANZ and CPA, as the peak professional bodies need to bridge the ‘why’ to the ‘how.’ The accounting firm’s role is to help develop skills derived from knowledge and put them into commercial sense, through practice.

At William Buck, we are leading change to support our people internally and through collaborative alliances, to ensure we are developing future-proofed accountants and advisors.

We recognise that change is normal and learning and development is continuous at every stage of a career. In the past year, we have a newly created Network Learning and Development team, to ensure all staff continue to expand their capabilities to meet the firm’s client’s growing needs.”

As a leading provider of accounting and advisory services to the mid-tier market, our enhanced L&D offering ensures all our people will remain experts in their chosen fields and we can provide our clients with greater depth and quality of service.”

We also continue to work with, and strengthen our alliances, offering the Chartered Accountants Program and secondments locally and internationally, with our global Alliance Praxity.

What new revenue streams can accounting firms undertake?

Moving forward, firms will be less-reliant on fixed-legacy income and more focused on working in the moment. Accountants must be agile and continue to use their judgement and influence with clients.”

“Revenue streams will fundamentally change and will derive from helping clients use their data to expand and improve their efficiency, market share and profitability.”

“In the past, revenue streams focused on accountants being the trusted advisor. To remain relevant in the future, we must become the trusted advisor of client’s data. Accountants really need to be proactive in taking on this role as data interpreter across their client’s whole business – from financials, to risk, to marketing and to I.T.”

How will service delivery change?

The change of focus to real-time, diversified skillsets and new revenue streams will see traditional service delivery redesigned.

The accounting profession as a whole, have almost made an art-form out of looking at historical data. I think this will become far less relevant. While compliance will always have a place, service delivery will be far more driven by technology. Instead of looking backward, we will be looking at data in the real-time and utilising the predictive behaviours of technology to advise our clients.

We are already seeing service offering demand change. In the past year, our biggest growth areas have been transaction services and advisory services and we have been involved in several record-breaking transactions across our firm. Increased Merger and Acquisition activity is a direct impact from those macro-economic trends, as businesses look to create synergies and seek advice on strategy and best practice. We have also been able to assist clients with R&D to facilitate innovation and growth.

William Buck clients already benefit from our integrated services model across our six-service lines; the whole accounting sector will need to diversify their service offerings and match skills to meet those needs, becoming one-stop shops for all business needs, from start-up to succession.

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