Those businesses that fail to invest adequately in technology face an uncertain future. Wolters Kluwer has identified the positive impact technologies such as cloud-based software, predictive intelligence and machine learning (ML) would have for the accounting industry in their recently published whitepaper, The Intelligent Practice: Building an accounting firm for the future.
The intelligent practice is one that uses technology to solve complex problems, cut costs, create innovative services, identify revenue opportunities, improve client satisfaction and increase employee engagement.
In more concrete terms, the intelligent practice is one that automates its practice workflow and compliance work. It’s one that uses smart software to automatically match tax events – such as legislative or tax changes – with clients in its database. And it’s one that uses cloud software to foster greater collaboration between staff, the practice and its clients, and the bodies that regulate them.
The case for automation
There’s no shortage of questionable claims made by those wanting to sell high-tech digital picks and shovels to accounting practices. If you’re yet to be convinced about the business case for investing in yet more technology, you may be interested in the views of industry experts, as well as your peers.
Sholto Macpherson is a journalist who reports on cloud accounting for Digitalfirst.com and other outlets.
“Workflow management, pre-accounting and productivity tools should all be considered as secret weapons behind customer retention, higher referral rates and higher growth,” he says. “These are three of the biggest pain points for both the firm and clients today.”
Research conducted for Wolters Kluwer in 2019 found technological disruption had created headaches for practice owners by lessening demand for high-margin and compliance services. But that same research found more than half of the practice owners surveyed said they were benefitting from automation. Many said it had allowed their practices to grow strongly without needing to hire extra staff.
Wolters Kluwer supplies a range of cloud-based tools to accountancy practices. Perhaps the one that most clearly illustrates the ROI a small investment in technology can yield is the predictive intelligence solution CCH iQ Client Match.
Until recently, matching trigger events – that is, determining how legislative and legal developments might impact a firm’s clients – was a time-consuming, manual process. Unsurprisingly, it was a task that many firms avoided undertaking.
However, accountants with CCH iQ Client Match are immediately alerted if a client will be affected by legislative changes.
Wolters Kluwer data shows that from 2016-2019 there were 150 tax events in Australia. These events affected the clients of the 500-plus Australian accountancy firms that use CCH iQ Client Match, which translated to 850,500 advisory opportunities.
Picture: Are you planning to incorporate automated technology and/or services into your firm? Source: WK Landscape 2019 survey.
The dangers of complacency over compliance
Whatever the industry, automation hoovers up the ‘grunt work’ – those repetitive tasks usually done by less skilled, more junior workers. For accountants, that results in more time to focus on providing clients with higher-value services.
Increased ATO automation and the commoditisation of compliance services are also leading forward-thinking accountants to use technology as a base to build advisory services.
Hartmann-Cox Chartered Accountants has invested in solutions such as CCH iFirm Practice Manager, CCH iKnow, CCH iFirmTax and CCH iQ Client Match to profit from this shift from compliance to advisory.
“For us, CCH iQ Client Match is a game changer. We can see around a 90% efficiency improvement in matching trigger events to our client database,” says Hartmann-Cox partner Troy Johnson CA.
“For us, CCH iQ Client Match is a game changer. We can see around a 90% efficiency improvement in matching trigger events to our client database.”
“In the future, we’d expect the need for more analytical skills for junior staff and a greater capability to deliver real-time advice for senior staff and partners,” he says.
“With government agencies digitising reporting requirements this is only going to continue to free us up further to focus on what the clients really want –advisory services.”
He adds that: “We are relying on software automation to analyse data and help people make the decisions they need to push themselves in the right direction.
“For us, CCH iQ Client Match is crucial for advisory. It’s more important for us to use our trained skill and expertise with the intelligence CCH iQ provides, and apply that back to how trigger events affect the structure or the operation of a business.”
Picture: Troy Johnson CA.
Teddy Kosasih, managing partner at Pitt Martin Accountants and Tax Advisers, agrees. “We are finding our clients want to talk beyond the numbers,” he says. “They want to discuss their entrepreneurial and leadership plans. Automated technology gives us the real-time data analysis we need [to provide] up-to-the-minute and accurate information [during] these conversations.”
Picture: What is the mix of compliance and advisory work in your firm?. Source: WK Landscape 2019 survey.
Are you meeting client expectations?
Those old enough to have a stake in an accountancy firm may not be digital natives. But they should be aware that an ever-growing proportion of their clients (and staff) have no memory of a pre-digital world.
“Younger clients will make a huge impact on firms,” predicts Macpherson. “[Clients will] expect much greater value from their accountant than a tax return. They will be looking to their accountant to educate them on what their financials mean.”
Find out more:
Wolters Kluwer helps practices improve their efficiency, navigate change and adhere to the needs of regulators and customers alike. By combining our expert knowledge with our passion for developing future forward technology, we are global leaders at meeting the need of our customers.
Our product management and development teams are constantly hard at work to provide software and tools to accountants to enable them to enhance existing and offer new advisory solutions to their clients, as well as protect and generate new income streams. We are dedicated to finding collaborative solutions to add to our suite to help our customers future-proof their business for the change that lies ahead.
You can find out more about how Wolters Kluwer can help you create an Intelligent Practice by visiting www.cchifirm.com.au