The changing face of the accounting industry
Cloud computing and other technological developments are changing the way accountants work.
In recent years, almost every area of life has been transformed by the so-called digital revolution, and accountancy is no exception.
People increasingly expect to be able to manage their lives digitally, from ordering groceries to making a doctor’s appointment, and companies (and technology) are responding accordingly. Last year for example, HMRC launched its ‘Making Tax Digital’ programme which aims to provide an accessible, transparent tax system that’s fit for the digital age, with all UK taxpayers having online access to their tax information.
This drive for digital, combined with the growth of mobile working has resulted in big changes in the accountancy industry.
The days of paper ledgers, calculators and even Excel spreadsheets are long gone. Instead, they have been replaced by specialist software programmes that help to speed up and streamline processes while also reducing the margin for error.
Recent changes to the pay-as-you-earn tax system and VAT rules for example have necessitated the development of new software to enable businesses to ensure compliance. And, in Payroll, specialist software such as Gusto allow for automated pay-runs and real time data syncing – helping business owners to avoid payroll-related headaches.
Some accountancy software can also double up as a marketing tool, with programmes such as TaxCalc offering a data mining feature which enables accounting firms to target potential clients.
By far, the biggest technological advancement affecting accountancy has been the advent and growth of cloud computing. Put simply, cloud computing involves storing, managing, and processing data over the internet rather than on your computer’s hard drive. In recent years, cloud-based systems have become ubiquitous with many people and businesses using programmes such as Dropbox, Gmail and Microsoft OneDrive to name just a few.
In some respects, the accountancy industry has been slower to adopt this new technology (possibly due to concerns around data security), but this is changing and cloud-based accountancy software is now a lot more common. Sage, the UK’s largest accounting software provider, now has its software available online, software firm IRIS offers pay-per-use cloud-based tax software, and FreeAgent, an accountancy system for freelancers is entirely reliant on cloud computing.
Cloud-based technologies enable small business owners to easily and accurately complete and edit their financial information. It also cuts down on the number of face-to-face meetings needed with accountants as the information can be accessed by both parties, allowing issues and queries to be discussed over the phone.
Peterborough-based accountancy firm, Linda Carr Accountants is one company embracing this new technological trend. Owner, Linda Carr, commented “With the advent of Making Tax Digital, we believe that the use of technology for accounting, particularly cloud based systems, will become the norm. In light of this, we are introducing a cloud-based quarterly service to meet the needs and demands of the modern client. “
Reaping the benefits
Some accountancy firms may be concerned that increased use of technology could mean an increased reliance on IT support companies but, in fact, the majority of businesses actually find that moving to the Cloud reduces IT expenses by between 30 and 70%. And that’s before you take into account the savings that can be achieved by streamlining processes.
As efficiency savings have grown, so has the role of the Accountant. Freed up by technology, today’s Accountant has more time to interpret data, give business and financial advice, and become more involved in their clients’ businesses. People skills have become as important, if not more so, than mathematical nous, and by embracing new technology, modern Accountants are able to provide a fully rounded service that meets the financial needs of business owners.