Accountancy is in need of digital transformation, but that is not always easy to accomplish.
High costs and a time consuming change process are common obstacles for accounting firms, as Tom Lefevere observed. He interviewed many accountants as UX designer for Xerius, an organisation that provides information and guidance for starting entrepreneurs. In this post he shares his thoughts and opinions on digital transformation in the financial services industry.
The stereotypical ‘number cruncher’ is a thing of the past
Tom explains: “During my conversations with over 100 accountants, I would often hear the same thing: 'It would be great if all the invoices could be put in to a box and be processed automatically!' These accountants were struggling with the restrictions of manual data processing.
A more efficient process would help to free up time for a more personal service. As it happens, these accountants I met were far removed from the stereotypical ‘number cruncher’, and were highly client-oriented.”
Digital frustrations in accounting
“I entered the accounting firms as a UX designer looking to test new features of Xerius, but it wasn’t long before the problem of ‘digital transformation’ was on the table.”
Regardless of whether they were traditional or more technologically advanced, all accountants were eager to share their digital frustrations with the UX designer who happened to cross their path. A chance in a lifetime. And Tom was more than happy to take notes.
Accountant or IT professional?
“Accountants would often tell me that they sometimes felt more like IT professionals”
“It’s no secret that part of the problem stems from the fact that an accountant needs several technological tools and apps to do his job. And because all those different applications don't integrate with each other, it’s not always efficient.”
Smooth digital transformation is not a given
But investing in the kind of software that facilitates integration is not an easy step either. Firms are often reluctant to make this investment leap. According to Tom, that reluctance is rooted in three key issues:
- Cost: New software licences can be expensive, and the accountant isn’t always confident to pass the extra cost on to the customer.
- Change process: Digitalization forces accountants to rethink the way they run their firm. It takes time for the employees to adjust to the changes and to familiarize themselves with the new software. Often the ‘status quo’ within a firm functions more or less fine as it is, and many firms don’t have much experience with these kind of change processes.
- Software integration: Often a lot of customer details need to be transferred from the old to the new system because the systems aren’t integrated with each other.
Pick software that fits your vision for the future
Tom continues, “Despite the reluctance, the realisation that times are changing is definitely present in the world of financial services. But the accountant often selects his software based on what supports his current way of working. In reality that approach soon reaches its limits.
The modern accountant needs to keep his vision for the future in mind. How does he want to evolve his services in years to come, in a workplace that is becoming more and more digital?
In the future the accountant will need to emphasise his role as ‘trusted advisor’. What software ultimately needs to deliver is efficiency, in order to create the necessary capacity and resources to deliver that new role.
On the other hand, the client is also very tech-savvy. And from the client’s perspective things need to be online, fast and cheap - that’s the expectation. Accountants will equally need to meet this expectation. And that’s the challenge.”
Redefine your core business
“It will become increasingly important for accountants to have an in-depth understanding of their clients so they can invest in providing them with highly tailored solutions. The new added value extends much further than the core business of the past.”
Tom’s advice for accounting firms is clear on this point: “Redefine your firm's core business and adjust your services accordingly.”
Advice in plain English
“The impact of the digital transformation isn’t limited to a firm’s core business, though. It will also change the role of the employees working in accounting firms. The next generation of accountants that firms hire, will primarily take on the role of 'trusted business advisor'.
Data entry is still a part of accountants’ day-to-day activities. But that will gradually shift to an advisory service.
Frequent communication with the client, gauging his challenges and ambitions... that’s the future for bookkeepers and accountants. The ability to explain complex financial topics to the client in plain English is key. And so is investing in software that supports this new role.”