Accounting in 2020

Some years ago I attended a PD run by Rob Nixon. At the time Rob was at the forefront of warning accountants that their history was over and that rapid change was about to hit many industries with none harder hit than the accounting industry. He had a number of "beyond 2000" type predictions which I now table and update as I see the profession today.

1. Compliance will be completely commoditised. Interestingly, this one has not come to fruition as the race to the cloud has resulted in incredible inaccuracy. What was old is new again with the quality control function of the accounting profession needed to correct rudimentary errors in the source data before being ready to lodge. Being quick and automated is great but only if quality control is not compromised. It will happen, but not in 2020!

2. Cloud accounting will be installed in >90% small to medium businesses. I think Single Touch Payroll will be the final shove in this direction and very well may be 2020 fact!

3. Cloud practice management will be in >90% of accounting firms - also likely to be either fact or approaching fact in 2020. I know out business has been in the cloud now for 2 years and will never go back to the desktop so expect many others if not all will share that view.

4. Coaches and consultants will take more clients. Fact. If you don't provide value in 2020 you will cease to exist pretty soon after that.

5. Offshore teams will be more prevalent. A relative measure rather than an absolute. The more diverse salary demands are in this country relative to others, the more businesses will offshore their team to manage costs in an increasingly commoditised environment. Would appear to be a statement of the bleeding obvious to many business observers but remains elusive for our politicians it would seem.

6. Marketing and sales skills will be needed. Fact. With price pressure and new entrants, the need to differentiate and show value is more of a prerequisite than ever before. New marketing and sales skills will be needed. We find internally that replacing the word "sale" with "help" is very useful as most accountants I know are uncomfortable with the idea of selling, but very comfortable with the idea of helping where needed.

7. Young people will not buy into staid and boring. Fact. The old model of autocracy and strict hierarchy is dead. Young employees are not interested in old fashioned systems or equipment and restrictions. History will tell whether this is a good or a bad thing but it is a fact.

8. No more time based billing. Fact. We are seeing more and more activity pricing. It is not a new idea. We've been doing it at least 4 years now and I am seeing more action rather than lip service elsewhere.

9. Value added services to be more than 80% of revenue. Fiction for now. I would say more like half that number would be normal for accounting practices. More if the practice is not compliance based.

10. Clients are finally served properly. The assertion was that real time accounting data would be reviewed ahead of tax time and tax planning occurred, finances are reviewed, insurances are mentioned in terms of costs to be managed and lazy balance sheets are put to work. The financial services licensing regime has complicated the ground somewhat with who is licensed to say what and how far can you go however it is fair to say that the accountant is more "in the picture" now than ever before which has to be a good thing. At a high level, it may not matter whether it is the financial planner, the accountant, the commercial lawyer or the strategic agronomist or consultant so long as someone is prompting the conversation. Stopping, checking and reflecting is a part of life for those who seek to double loop learn and grow. Whilst it might not be accurate all of the time, the cloud computing process makes this area possible and is the single biggest upside to digital disruption as far as I can see.

How does your accountant rate on these measures? It is not a bad question to ask next time you are asked to sign a service agreement. It is an even better question to ask if no service agreement exists!