Accounting software vendors will win through transparency.
The transition from paper to electronic taxation forms which automatically fill fields using “smart data” will kill tax compliance for accounting firms, accounting services developer LodgeIT said.
“The compliance game is about to be decimated, in my mind,” said Andrew Noble, owner of electronic form service LodgeIT and West Australian accounting firm Noble and Associates.
The Standard Business Reporting (SBR) Program, led by the Australian Treasury, was creating standard electronic forms for accounting which would pull information automatically from governmental records including tax and company registration.
Although the SBR Program was still in its early stages, desktop accounting software such as QuickBooks and online services such as LodgeIT could pre-fill business activity statements and PAYG summaries by pulling information from the SBR portal.
Noble pointed to the impact of automated bank feeds in reducing data entry. Financial service suppliers such as BankLink had been supplying bank feeds for several years but cloud accounting vendors Xero and Saasu had driven takeup by pitching automatic feeds as a key selling point.
““That stuff has been around for a while but it has taken a foothold and the next big transition on the horizon is smart data. SBR has taken us to the brink.
“When the new systems become more efficient in handling smart data, I don’t see a lot of room in there for people sitting there punching data in. A lot of the stuff will just be automated,” he said.
SBR-created forms would pressure accounting software vendors to open up their accounting software and customers would choose programs based on their transparency, Noble said.
“The (accounting software) platforms of the future that will be the most successful will be the ones that are most transparent and easiest to get data in and out. The minute you try to stop people getting their data in or out you’re limiting your connectivity to the networked world.
“Within 18 months you’ll have click-in and click-out conversions from all the accounting systems,” Noble said.
Accountants who relied on tax compliance would need to diversify into specialised planning or consulting such as recommending cloud services, Noble said.