Every now and then, a relevant buzzword does actually emerge. Last year for instance, we saw the timely introduction of ‘no-code accounting’.
It’s a phrase that actually needed to be coined to describe an established phenomenon, as opposed to just satisfying the whims of some marketer: it describes accounting’s race towards zero data entry.
Accountants will have already noticed the hours spent on the profession’s clerical duties have decreased. Automation will take this a step further by eventually eliminating it. And sooner than you think. For evidence of this, watch the short video below from Harvard Busines Review
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Recently, we’ve seen the emergence of software that is just as adept at pattern and mistake recognition as a set of human eyes. The hours you spent in the past poring over a client’s data just won’t be necessary. I suspect, for many people, that’ll be a relief.
Now, with introduction of Making Tax Digital, accounting automation will go even further. Between the bank feeds and digital reporting, the taxpayer journey in the UK is set to become a light touch, quarterly experience.
With the integration between software and HMRC, the space for an accountant within compliance is narrowing. As Jesse Onslow pointed out, we’ll begin to see platforms “providing full tax and financial compliance functionality”.
Here's why you need to offer 'creative' services
Why has automation had such an outsize effect on compliance work? Well, as New York University’s Vasant Dhar points out, automation thrives when tasks are:
Built on data
Now look at compliance: populating a tax return is based on reams of historical data from which an automated programme can mine. And partnered with an able human, the few mistakes that might slip through can be eliminated.
So if we accept that the hours spent on collecting, preparing and inputting data will be cut down (along with the fees that come with it), where will your money come from?
Is your job executional or creative?
Broadly speaking, human work can be split into what TechCrunch’s Aidan Cunniffe described as ‘executional’ or ‘creative’ “While machines may be able to match us in logic, when it comes to creativity, they are woefully inadequate,”
Cuniffe writes. “There are really only two human enterprises: creation and implementation. We design things, come up with interesting strategies and ideas and then we execute them.”
The executional aspects of accounting are under direct threat from a development like Making Tax Digital or the Second Payment Services Directive. If your practice is built around these tasks, then you’ll need to adjust.
But it’s not an impossible feat: it just means doubling down and embracing the creative aspects of accounting that you’re already performing. And luckily, these creative skills will be more powerful than ever because it’s been armed with a new set of tools.
Your advisory services will be steeped in data extracted from your client’s software packages. You will have the tools with which to be creative.
How technology gives and takes away?
The wave of intelligent software will give accounting professionals unprecedented insights into their client base. If accounting automation is going to take over the data input aspect of day-to-day accounting, accountants will need to provide context and meaning from data.
Instead, it’ll give them new tools to work with. And as these tools integrate with one another and create a complex weave of data, someone will need to manage these systems and interpret the output.
That’s how accountants will be paid in the era of accounting automation: not by capturing data, but by interpreting it; not by using software, but by managing their client’s software eco-system. Your fees aren’t declining, they are rewarding other skills.