The Rise Of Automation, The Gig Economy, And Data: How Accountants Can Leverage These Trends
We were delighted when technology and lifestyle accountant Heather Smith agreed to write two special guest blog posts for us on trends in the accounting industry. We hope you enjoy reading this insightful article as much as we did!
The Association of Chartered Certified Accountants regularly publishes Professional Insights Reports that aim to answer today’s big questions around being an accountant, preparing us for tomorrow. Within the Future ready: accountancy careers in 2020’s report, they included 20 trends changing the world of work and transforming the nature of careers in accountancy.
If you’re an accountant interested in preparing cash flow forecasts for your small business clients, the following three data-focused trends will be of interest to you:
- The ‘A’ word. Automation frees up professionals to focus on higher-value work.
- The rise of data. Data possibilities become ever central to the roles of professional accountants.
- Rent a CFO? The rise of the gig economy changes the composition of teams.
I recently sat down with Kevin Fitzgerald to talk about these trends and how the accounting community can turn them to their advantage.
Kevin is originally from Dublin, Ireland, and has enjoyed an accounting career that’s taken him through working for a small to medium practice, working in audit, working for hedge funds in Dublin. He then moved to Australia and worked in recruitment where he helped accountants find their career pathway. Most recently, and in his current role, he works at Xero, starting initially in Melbourne, Australia, now he is the Managing Director of Xero Asia, and living in Singapore.
Here is a transcript of our conversation around these three key trends.
The ‘A’ word. Automation frees up professionals to focus on higher-value work.
Kevin: It’s fascinating to see how much has changed in the accounting industry in 20 years, but also how much hasn’t. When I’m speaking to accountants, I say, “Okay, this is the way I used to do my work back in 2000 and 2002 when I was working in a practice”. And I find that a lot of them are still working the same way. It’s amazing to see that automation isn’t everywhere yet, but it is definitely very powerful in the places where it is being used. And it changes the game for accountants.
Kevin: I think the professional accounting exams are hard enough. You don’t need to do that and then go into a business and do data entry for your career. You need to be in there looking at the insights and what it means and storytelling about the business.
Kevin: Automation has had a big impact on the industry. But I still think it’s got a long way to go.
Heather: Yes. Smart people shouldn’t be doing stupid things, and embracing automation frees us up to think about and help our clients. I look for automation in everything that I can find. Any process I can automate, I find a way to automate it.
Kevin: Even our personal lives are so automated. I find it fascinating when I meet an accountant and speak to a lot of ACCA members, and you see they’ve got the best smartphone. But the business they work in is probably using old technology. And it’s a very diverse situation for them to be in because personally, they’re using the best technology available to them, but professionally they’re not. And I wonder how that impacts their career, what are they learning?
The rise of data. Data possibilities become ever central to the roles of professional accountants.
Heather: I’ll jump in here initially and say I love the Xero Small Business Insights report, which is a monthly insights report of aggregated anonymised data from their small business client base, from UK, Australia and New Zealand.
Kevin: Yes, I find it fascinating, because accountancy for me is also about facts and really looking at the data to give you a bit more understanding of the facts. The aggregation of data that we’re doing in certain regions where we have a lot of SMEs using the (Xero) platform, is really fascinating to see the storytelling that comes out of it.
Kevin: Even through this time of COVID-19, we’re starting to see trends that are very similar in New Zealand, Australia and the UK across the SME market, which would even suggest that there is much more correlation internationally between SMEs than maybe we expected. And you could nearly pinpoint the change and the rise of increment of those businesses, the bounce back as we’re calling it. And I think that’s where there’s an opportunity for accountants to dig into that data and say, “Okay, what does this mean? What story is this telling us about our businesses? How do I help my client?”.
Kevin: But you can only get to the point of having rich data if you have the right tools to surface it. And I think that comes back to the whole topic of digitalisation. What does it mean? What do I get from it? I really think there’s a big conversation to be had. And some discovery for members around digitalisation of bookkeeping, accounting, tax audit is one thing, but what you get from it is where the real power lies. What is the impact of it?
Kevin: Because accounting hasn’t changed for a very, very long time. Debits and credits have not, and will not change, but how do you actually get them into the system? How can you take advantage of that?
Heather: Yes. With that information, and with those insights from the data, you can actually talk to your clients. One of the things that did come out of that insights report, as well as small businesses were hit hard but rebounded faster, was that cities moved from looking like a fried egg with everything happening in the middle of the yoke, to more looking like a scrambled egg with activity happening all around the edges.
Heather: If you’re now talking to a hospitality client, you may be saying to them, “Well, maybe the next restaurant you open, or maybe the restaurants that you’ve got, you would actually benefit from moving them out into the suburbs”. As an accountant, you can put the data in front of them to tell them that it’s not their data, it’s macro data, and it’s available to everyone, and that’s powerful and really exciting.
Rent a CFO? The rise of the gig economy changes the composition of teams.
Kevin: Rent a CFO, online CFOs, cloud CFOs, I’ve never seen so many available in my whole life, and it’s a win-win for both parties. You’re getting a really capable, qualified individual who maybe doesn’t actually want the full time role or doesn’t need it, but they still want to be helping, they still get a lot of enjoyment from helping businesses, and they can dial in like this and have great consultation. And obviously, a big part of it is having the right data and the tools and the technology. Generally, a lot of the CFOs for rent now will demand that their business is using their cloud tool.
Kevin: What I’ve also seen is that some very progressive accounting firms have a range of CFOs available, even in Hong Kong. So the client will come to the business, and if they feel that they would be better suited to having a CFO on hand for a couple of hours a week, or a couple of days a month, they’ve got 10 to 12 CFOs to choose from. And they’re not all in Hong Kong. They’re in different places in the world. So they’re doing introductory services to CFOs who are really capable of using cloud technology.
Kevin: I find that space really fascinating because there’s an opportunity for people who are maybe thinking about new ways of working. Do they want to be locked into one city? Do they want to travel? And I think that opens up a world of opportunities. But for an SME, you get somebody who’s really capable, maybe you didn’t have that experience before with a CFO, that it was just the finances were done by yourself, and you had an external party to do it. But imagine you could get one day a week with somebody who’s really experienced in business to help. That’s a fast-growing trend.
Heather: Yes. And as you said, some people don’t want to work full time. That was very much me. I was working around my children’s school hours, and I was jumping into client businesses and assisting them with their accounts. I had a skateboarding shop client in Panama. I had a juice shop in Seattle. I can jump in and explain their numbers to them and help them on their journey. As an accountant these days you can, if you’re not dealing with that compliance side, work from anywhere. Your clients can be anywhere through that opportunity, and the small businesses benefits so much. It’s, as you said, win-win.
Our small business clients can access affordable digital solutions, that can surface data promptly, from which we as accountants can assist them in making informed decisions about their business. It’s hoped that this discussion is a launchpad to help accountants recognise and leverage these data trends. They may assist in sparking new business ideas, help the firm define service offerings, or aid in identifying knowledge areas that need improvement. What are your thoughts on these data trends? Do they resonate with you? Are they something you can use?
Read the next guest blog post from Heather Smith: