Industry Spotlight: How the Accounting Industry is Evolving

Episode 83

As we start on a series of industry focussed WineDown episodes, we thought it’d be a great idea to start talking about the accounting industry. We’re discussing how the accounting industry is quickly evolving and how technology plays a large role in these changes.

Let’s dive in.

Security has quickly become a key concern

Over the last few years, this is one industry that really has drawn attention to the security of client data – and rightly so.

Accountants have clients’ personal details, tax records, bank account details and so much more. They help produce (and store) clients’ company financial and tax records. If in the wrong hands, this information could be used to fraudulently open bank accounts, establish credit cards, take out loans and make large purchases.

Even the Australian Privacy Principles have been well educated on the matter by accounting governing bodies. APP11 – the security of personal information – is a prime concern.

We can’t say this enough: Security. Is. Key

New ways of working

Accounting is also an industry where working remotely has really taken off over the past couple of years. But how have firms managed these new working environments.

Many modern accounting firms were able to successfully fit into remote work conditions quickly, while other firms that had not innovated experienced many logistical and technological issues maintaining practice workflow.

Data storage and evolving security standards

Data locality is another issue that has continued to raise heads over the years. People understandably want to know that their data is safe, so asking, “where is client data stored?” has been a key topic of many discussions.

Moving data to the cloud is one thing. Which cloud, or more specifically which country the cloud is in, is becoming a more common question to ask as well.

How come?

Security standards are still very broadly utilised across firms. We use ACSC’s Essential Eight and Microsoft Secure Score as a starting point for security. This gives a good foundation for the basics of security to be implemented in a measurable way across the organisation. Depending on client requirements, we can take things further from there.

‘Old’ vs. ‘New’ accounting firms

Another accounting industry issue we have seen is the ‘old’ vs the ‘new’ - firms operating in legacy ways compared to those that are working with modern business practices.

Both firm types can certainly do the required work and produce a result. However, modern firms are deemed to be more efficient. They are also the first to look at providing more advanced advisory services since their staff are not tied up performing repetitive operational practices.

Younger generations in accounting

As of lately, there is also a real danger to younger generations in the accounting industry, especially since many do not want to work with older firms utilising legacy business practices.

Although the practices may be tried and true, younger staff are ingrained with technology and prefer to use it in their everyday life, both for personal and professional use. This has even led to an increasing trend of younger, experienced accountants leaving legacy firms to start their own modern, efficient practices.

Compliance and regulation around client data

It’s safe to say that the accounting industry has an overwhelming amount of data. The tax office is just one example of an organisation that has used this to pre-populate tax returns.

This data *could* be used to provide advisory services to help clients make their businesses more efficient, although that rarely seems to be the case. Clearly, this is only the beginning.

Compliance and knowledge of new rules or tax laws are also critical. These change regularly, making it difficult to keep up.

What about automation?

Many industry roles, such as bookkeeping, are becoming more and more automated.

Interestingly enough, the accounting industry bodies have had strong messaging around encouraging bookkeepers’ skill-building, enabling them to keep up and provide more advisory services to firms. But is this messaging working? Are bookkeepers evolving or are they stuck in their ways?

Modern organisations have already automated the entry of purchase orders, invoices, payrolls, and expenses (via expense scanning apps) into their accounts.

One thing is clear – there is a lot of scope for more advisory services to be given, moving beyond just the ‘tax and compliance’ roles of today. Some firms are making the journey and are reaping the benefits. Others are still keeping busy but only because they’re stuck with legacy operating practices.

If you're running an accounting firm, how is your firm evolving? What does your security look like? How efficient are your practices?

Talk to us today to discuss how we can get your accounting firm to keep up with the changing times.

Wine of the Week

And the Wine of the Week is a 2019 Corryton Burge Barossa Shiraz! This is a beautiful fruit-driven wine that we highly recommend!

⭐4.2/5⭐