“Design thinking” is everywhere – even in accounting. We just may not be aware of it.
Design thinking has come to be defined as combining empathy for the context of a problem, creativity in the generation of insights and solutions, and rationality in analysing and fitting various solutions to the problem context.
According to Tim Brown, CEO and president of design and innovation consultancy IDEO, the goal of design thinking is “matching people’s needs with what is technologically feasible and viable as a business strategy”.
Increasingly, businesses are adopting the design thinking philosophy to transform how they operate and how they sell services to customers.
What does this mean for accountants? Accountants are used to communicating financial information in a format the accounting industry prefers, but is it how their clients want to see their data displayed?
Today’s online accounting software providers have continued with the desktop software philosophy of compiling and reporting data by legal entity. However, if you ask most clients, they are not necessarily concerned about whether their trading company or investment trust makes a profit or loss. They want to easily understand two things: (a) the total tax they have to pay, and (b) where did the cash go!
With time and education, business owners can gain an appreciation of the importance of cash driver reporting and how its application can assist with their wealth creation.
As a profession we understand why there are compliance reasons for having data represented by legal structures. However, who is the primary audience for any online accounting output anyway? The financial data collation industry (i.e. accountants, bookkeepers, financial planners, etc.), or the client? Who really owns and pays for the data?
It is my belief that tax should be a data outcome and NOT the driver.
This holistic approach is not a new phenomenon. We see it nearly every day with our internet banking. On the one page you are able to see your business, investment and/or personal banking, potentially spanning across several legal entities and their accounts, and you have the capacity to drill into any account to review transactions.
It’s possible to see a total banking position without any manual additions and/or third party software intervention. Try doing the same with today’s core online accounting programs without having multiple browsers open.
There are plenty of design thinking opportunities to provide a better online accounting program without having to pay for add-on programs.
Who will be the new entrant that designs the Holy Grail of online accounting? Hopefully, one that is designed with the client in mind and also accommodates the compliance reporting as a complementary outcome.
Andrew Broadbent is a FIPA accountant, registered tax agent and owner of Smarter Numbers, an accredited partner with Intuit, Reckon and Xero.
Image credit: Wikipedia