If accountants don’t embrace change these days, we may be left behind very quickly. Change used to happen slowly so everyone could adjust, the world won’t wait that long anymore. What took six years to change now happens in six months. We’re in the middle of the digital age – a rollercoaster ride – hold on to your hats and enjoy it or be flung right off!
This brave new work that is unfolding before our eyes has two paths – one for the traditional accountant and one for the advisor.
Here are four reasons why traditional compliance accounting and tax fees will be under huge downward pressure in the immediate future. The price of a tax return will soon collapse under this pressure.
1. Offshoring or Outsourcing
Today accountants in Australia are competing with $6/hour CPAs overseas. These are accountants trained in Australian accounting who can prepare a set of accounts to submit to the ATO for a very low price.
2. Accounting Software Automation
Accounting software is becoming much smarter. I predict that within three years we will create tax returns to BAS (business activity statements) with the click of a button.
3. Automation of Other Systems
It’s not just accounting software that is becoming automated. Global advancements in technology are making it much easier to gather, analyse and distribute information. This is making things easier and cheaper and more convenient for everyone. It also makes it much easier to collect source documents for accounting programs.
4. Consumer Sentiment
Clients want more for their money and from their accountant or advisor than just their tax return. Businesses are expecting analysis and advice based on their financial results.
Here’s the secret: Technology is not the answer. It’s merely a tool that is used to create an efficient outcome.
Is the answer to offshore processing of tax returns so you can compete?
And while many people in the accounting industry are flogging outsourcing and offshoring – many clients and accountants for their own reasons aren’t comfortable with this. I’ve seen pictures of the offshore accounting “sweatshops” full of people working at PC’s. “Security is great,” we are told. USB ports are superglued so no-one can take any information out.
But this approach falls apart when the world moves to online accounting software. What’s to stop someone from leaving the sweatshop, going home and logging onto Xero, Reckon or MYOB with a username and password and doing whatever they want with your client’s data? No amount of super glue can stop that!
The answer is to automate your processes using online accounting software. As much as we love Xero, Xero alone is not the answer. It’s how you use it to do great things for your clients – and benefit yourself by working smarter not harder.
Outsource to Xero, not to the Philippines.
If you’re interested in hearing how to do this, check out our webinar at 12.10pm today (EST): ‘How To Prepare A Set Of Accounts In Under Two Hours’.
Timothy Munro is CEO and Founder of Change Accountants & Advisors and ChangeGPS.
Agree agree agree agree, Nice one Tim.
Engaging a professional offshoring company minimises the risks mentioned in this article.
USB drives can be disabled by deploying a Group Policy disabling USB drive access on Active Directory domain assets.
Xero access can be restricted through inhouse security systems, which restrict users access to the username/password.
Disclosure: Odyssey operates out of Vietnam and has over 200 professional staff providing services to over 500 Australian accounting firms.
When you remove the hyperbole, scare-mongering and obvious self-interested sales approach to this article, there are some really, really good points here.
It is always disappointing when authors feel the need to pad their knowledge with a lowest common denominator, tabloid-style approach – just write thought leadership work and lose the sensationalism.
Hi Rod – I appreciate your posting here. What parts of my article did you think were scare-mongering?
Also, what was the self-interested sales approach? Seriously, I’m interested in your perceptions.
Thanks!
“Sweatshops”
“superglueing USB drives”
Not sure how they add value to your 4 points. The only thing you were missing is “boat people” and you could have really had the trifecta!
Any professional offshoring operation has better security over clients data than 99.9% of accounting firms. In fact, you and I and every other Australian accountant are probably more at risk of staff going home and logging in and doing whatever they want with clients data.
Timothy – we are already doing exactly what you are trying to sell on your webinar and have been for a long time. Rather than waste time, money and resources on low-skilled grads and trainees, we get our offshore team to do the low valuehack work on the clients cloud accounting files. This frees up our team to do what we pay them for – use their brains, their skills and their experience to help our clients grow their business.
That’s a big call, Rod. I’m sure there are good and bad examples of offshore operations. Even if you don’t like Tim’s examples, his point about improving productivity through software automation is still a good one and very relevant to a lot of accountants. Just as some accountants are uncertain about technology, others will have reservations about offshoring.
There are many firms in Australia improving their internal productivity through online accounting software. Maybe they will offshore too but at this stage it’s not necessary.
What happens when these offshore people make errors that can cost the client a fortune? Any liability insurance?
A lot of people like the face to face contact and know exactly who they’re dealing with. I don’t know of many people who’d trust someone that they’ve never met and isn’t familiar with their business set up. The accounts are only as good as the information provided and in many situations a birds eye view of the clients entire operation and even perhaps their personal financial situation may be required.
Xero, MYOB all have their faults and automation can become far too easy – and even easier to cock things up ! You MUST have a general knowledge of the accounting principles and the mechanics. Otherwise, you’re up shit creek and without a paddle in sight.