Why the accounting firm of the future uses predictive analytics – and how yours can too

Technology enhancements, improved financial literacy levels, and a more engaged public, consumer and business owner are creating new advisory opportunities

The squeeze is on for the modern accounting firm as cloud computing now influences a range of changes including a future of predictive accounting possibilities.

Today’s professionals need to make the most of the digital opportunities they have and secure  access to the intelligence they need – and most importantly when they need it – to drive the best outcomes for their clients and their firm.

Peter Docherty, general manager public practice for CPA Australia, believes a range of factors are driving the accounting profession and regulators to change how they do business. Technology enhancements, improved financial literacy levels, together with a more engaged public, consumer and business owner are creating new advisory opportunities.

In a recent study, The CPA Australia Asia-Pacific Small Business Survey 2015 (PDF), the findings for the future were positive.

“In the past, consumers rarely questioned the advice of their accountant,” says Docherty.

“The good news is that research we conducted reaffirms accountants and their clients still have a long-standing relationship built on trust.”

Open the doors to a deeper and broader relationship

“Transactional accounting, like compliance, looks at the past performance while advisory services add value by identifying options for the future based on factual knowledge,” Docherty adds.

“Accounting firms need to use the data intelligence they already have as a means of opening the doors to a deeper and broader relationship with their clients.”

Overall, Docherty notes, “a large majority of clients deem their relationship to be consumer transactional in nature, built on compliance or financial reporting, and they want more”.

Jason Cunningham FCPA, co-founder of business and personal wealth advisory firm, The Practice, acknowledges the role of the modern accountant in his firm changed significantly following an audit of their own practice.

The firm realised the traditional accounting client relationships – the single touch of an annual tax return – wasn’t beneficial for the firm or its client base and that the future lay in the more transparent relationship approach.

“What really resonated was the more defined relationship we had with our business owners,” says Cunningham.

“It was based on high levels of service and communication.”

The accountant as adviser

According to Daniel Wyner, general manager, group product management for Wolters Kluwer, the role that accountants have with their clients, and their influence over technology implementations, is much stronger than other key professions.

Almost 500 SMEs surveyed in the Wolters Kluwer Tax and Accounting Industry Study 2016 reported that they believe they have a “trusted adviser” relationship with their accountant.

“This is a great confirmation that the professional accountant still has a valid role in the day-to-day business operations of corporate Australia,” says Wyner.

“Our research also revealed that around 83 per cent of accountants can still influence bookkeeping/accounting software purchases in the move towards further automation and the cloud,” he says.

Cunningham also underscored the importance of being a cloud advocate with clients.

“We recommend cloud solutions to clients. It is more efficient to be in a real-time position with your business adviser. The advice is much more proactive,” he continued.

The move towards predictive accounting has started

Predictive accounting provides an opportunity for professional accountants to better engage with their clients by using their database, software, readily available benchmarks and analytical tools to unlock opportunities as they arise.

Says Wyner: “The future is about better knowing your clients and extending your service offer by adding value to the work you have already done.”

Cunningham agrees. “Our accountants focus on adding 100 per cent value and being able to deliver a great customer experience.

“The days are over when the priority is sitting there adding things up. Clients don’t care. What they do care about is the customer journey, how you spot opportunities in real-time and flag them, how you stay in touch with them on transactions and how you speak their language.”

For Tracey Amott, founding partner of Greenview Accounting Group, predictive accounting is a game-changer.

“Predictive accounting can shift accountants away from basic compliance work and instead let them focus on advice and consulting on complex, challenging issues, which lets them play a more involved and significant role within organisations big and small,” she says.

From the Greenview Accounting Group perspective there is more integration of the underlying data and less data entry.

Jodie Smith, partner at Greenview Accounting Group, believes this now provides the opportunity to focus on how time is spent on a client’s account – with a focus to value add.

“Business activity statement time is now proving to be an opportunity for the firm to extend its business consulting services to clients, acting more as a trusted advisor than tax accountant alone. Predictive accounting is an excellent touch point with our clients.”

Preparing for industry-wide transformation

“If you are not a pivotal part of the journey to the cloud and higher levels of self service and automation with your client then it is going to cost both sides,” says Wyner.

“The concept of fixed price agreements are not the priority here. Instead, be more involved in correctly setting your clients up in the cloud for bookkeeping, business intelligence solutions and any other business-related software solution that will help their business.

“Don’t let your involvement end there - check in frequently with clients and help keep them on track,” he adds.

The challenge for professional accountants is to stay across  the hundreds of potential actionable events that may impact clients and efficiently communicate these insights to targeted clients.

“One of the benefits of the cloud is that it favours no-one,” adds Wyner.

“Anyone can tap into the same information with the tools and access widely available today. The key is to grab this information that can benefit your firm and demonstrate to your clients how you add value by sharing the information. The last thing you want is your clients building their own solutions to bypass your value added advice,” he says.

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This sponsored content was brought to you by Wolters Kluwer. 

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