The keys to survival lie in a willingness to adapt.
Accountants need to hasten the pace at which they adapt to structural change in the industry if they want to survive in an increasingly technology-driven and price competitive global marketplace, according to panellists at CPA Australia’s 2014 SMSF Conference and Expo.
“There is no precedent in modern economic history for the speed and scale of price deflation that is being triggered by cloud computing and crowdsourcing,” says Ashley Porter, managing director of Mclowd, a superannuation software company.
“As a consequence, the capabilities of successful professional services firms are changing at a similar pace."
Porter manages an online crowdsourcing network that allows self-managed superannuation fund (SMSF) trustees to manage the taxation and compliance of their funds by tapping into an online global network of accountants.
The end result is a much more affordable approach to bookkeeping and compliance than traditional models.
“The workflow associated with accounting and tax compliance is changing,” says Porter.
“In the accounting space, we pay A$8 an hour to a firm in India to do our bookkeeping and I pay A$20 an hour to a CPA accountant in Chennai to do my super fund, because that's the globally defined marginal cost of an hour of SMSF administration.”
Mclowd is not an accounting practice; it has no staff and no office, and yet it has emerged as an important player in the market by managing the ebb and flow of clients and practitioners through an online community.
Tanya Titman, managing director of Consolid8, says there has been some resistance by sole practitioners to embrace the changes brought about by technology.
“The thing that stops people getting into this space is that fear of change,” says Titman.
“It's quite daunting, particularly if the processes you've used have been the same for many years.”
Accountants, Titman adds, need to adapt to use the technology in their favour by reducing the time spent on low-value services and focusing on the value-adds, such as advising and consulting.
Her company Consolid8 outsources its data processing and checking to Manila, allowing them to focus their attention on other areas of the business.
“There is enormous price pressure on the standard-type services,” says Titman.
“Anything that doesn't have a great deal of value, like data processing, those sorts of services… the price of them has really been driven down by technology and the ability to leverage off outsourced providers.
"If sole practitioners are trying to compete in that market without using the same platforms, technology and resources, then they'll really struggle to be able to hold that business."
Titman adds that there are enormous opportunities to leverage the cost efficiencies of the global marketplace to drive business forward.
“More and more, accountants want to be able to get into the value-add type of work, so in the next 10 years we're going to see a lot more development in technology, which will mean that your pure compliance-type work will be very low cost.
"Whether it be crowdsourcing or offshore work or even outsourcing onshore, there's just more and more of that happening."
Alia Parker is a finance journalist with more than a decade of experience spanning newspapers, radio and the wires on an international scale. When she's not writing about finance, she heads up The Australian Bicycle Route Project.