Hear Reckon, Saasu and the Institute of Public Accountants discuss future business models for accounting firms on Wednesday 2 April at the Future of Accounting Forum in Sydney and streamed live online. Limited tickets – Register now.
Accounting firms that relied on processing income tax returns to generate the bulk of their revenue were in danger of becoming obsolete, said the Institute of Public Accountants.
“If your practice is solely focused on ‘I returns’ then it’s a dying breed,” said IPA CEO Andrew Conway.
Advances in accounting software and a commitment by the Australian Tax Office to automate 4.5 million individual tax returns by 2015 were reducing demand for individual compliance services. Trends towards offshoring and outsourcing were putting further pressure on prices for all types of tax returns, Conway said.
“We’re not going to stand in the way of efficiency in the system. If you’re relying on compliance based work for your bread and butter you’re going to become pretty hungry in the next couple of years,” Conway said.
An uptick in new members to the IPA was driven by accountants looking to build business models beyond compliance, Conway said.
“I call them all when they join and an increasing number are interested in broadening their base of advice. We don’t want to turn every compliance practice into a financial planning practice, but we have to make sure that our members are meeting the needs of the market,” Conway said.
Some accountants were “rusted on” to the compliance business model which had provided their income stream for so many years, Conway added.
“That’s understandable, it’s their meal ticket. Sometimes (post-compliance business models are) a confronting discussion but a vital one to ensure they’re prepared for future growth opportunities,” Conway said.
“The challenge for a member in practice is that they have to take time away from their business to work on it and that’s a challenge in itself. You have to be thinking about changing your business model now to survive in the profession.”
The IPA had seen consolidation of compliance and advisory services across practices and greater interest in offshoring and outsourcing compliance. While the latter two approaches raised issues around client approval and engagement, accountants were often driven by the need for more efficiency.
“If you can claw back half a dozen hours in your practice and have half a dozen more hours face to face with your client, it might bring additional revenue streams to the practice,” Conway said.
Need help planning a post-compliance future for your firm? Come to the Future of Accounting Forum on the top floor of the AMP Tower at Circular Quay, Sydney, from 9-11am on Wednesday 2 April.
Breakfast included and the event is worth two hours of CPE. To buy tickets to attend the event, or to watch the live stream or video on demand, Register Now.