If clients’ futures can be discovered in their current tax returns, the next step for accountants may prove quite surprising.
We may all live in the Innovation Age, but it appears no one has told Australian small businesses. CPA Australia’s Asia-Pacific Small Business Survey 2015 found that Australian small businesses are significantly less likely than their Asian counterparts to be innovative, use digital technologies and export.
There’s more disturbing news: the Australian Innovation System Report 2015 revealed Australia is ranked 27th in the world for innovation, well below the OECD average (The Global Innovation Index, Cornell University 2015). Australia’s small businesses obviously need help and that’s where professional accounting firms come into the picture. If accounting firms can use their recently honed expertise in cloud computing, they can unearth all sorts of useful data to assist clients with long-term planning decisions.
Beyond big data
Predictive intelligence is one of the most powerful tools available for a broad range of industries and organisations. For today’s modern accounting practice, predictive intelligence is actually closer than ever and the ability to transform a practice – and the financial future for clients – may be in the large number of client tax returns already on file.
In fact, for some accountants the next step may seem quite surprising. Harnessing and aggregating the data at hand is the key to unlocking valuable information and delivering actionable business insights. What is needed is the toolkit to tap into this information and produce business intelligence that can be used to influence future outcomes.
With the advent of cloud accounting and cloud computing in general, new technologies now exist to unlock this information by analysing it quickly and automatically, allowing all parties to act on it immediately. Sometimes called business analytics, big data or predictive intelligence, it goes by many names, but all with the same result – making better business decisions.
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Predictive intelligence is a mix of automated analytics that produces results in real-time for cloud-based subscribers. Once the domain of the world’s largest data-trawling companies, the automation of the cloud and a handy software toolkit can now match a range of externally held data to internally held data – such as the extensive information kept within tax returns – and predict a possible outcome.
Toolkits based on predictive intelligence, now being made available to the accounting industry, will help unlock the intelligence in such valuable data. They will pave the way for accounting firms of all sizes to deliver the same high-quality advisory outcomes.
Predictive intelligence is based on big data algorithms that search legislation, rulings, the precedents created by legal proceedings, commentary and practice aids. By applying filters across results by content type, library, topic, jurisdiction or court, it can match possible changes to any field held in a BAS form or tax return with client data entered. Predictive intelligence big data can also search news items and cross-match them to legislation outcomes. Toolkits can even assess the impact on other financial transactions, property valuations or SMSF portfolio-management software.
Data-driven decisions are a way of using a predictive-intelligence tool to recognise actionable information from hundreds of macroeconomic and legislative events that take place every year – such as changes to tax laws – using “client match” technology to search an accounting firm’s database and match the event with impacted clients.
A single search can match to multiple client outcomes, bringing a greater level of depth and insight to a firm’s clients, and helping the practice to build relationships based on high-value tailored advice. Professional accounting firms can flag new business opportunities, communicating through a choice of pro forma letters, impact statements or even calculators. Imagine using a new solution to automatically share the firm’s thought leadership on possible outcomes, with a new digital platform reaching clients automatically.
This is no time for inertia – the accounting industry’s journey to more cloud-based, bespoke solutions should continue so that it can lead the way in providing the information clients need to make more informed business decisions. Public practice needs to remain focused on how to best support the creation of higher levels of growth and more jobs, so that the Australian economy can keep up with global trends and keep innovation firmly in the centre of everything it does.
This an edited excerpt from a Wolters Kluwer CCH and CPA Australia e-book: Predictive Accounting: The Valuable Firm of the Future.
By the numbers
Australia’s small businesses are 33% LESS LIKELY to invest in e-commerce than Asia’s
ONLY 6% OF AUSTRALIAN SMALL BUSINESSES expect to grow e-commerce in 12 months, VERSUS 41% IN ASIA
Roughly 50% OF AUSTRALIAN SMALL BUSINESSES will have a social media presence in 12 months, compared to 92% IN ASIA
Online sales drive some revenue for 33% OF AUSTRALIAN SMALL BUSINESSES, well short of the 82% FOR ASIA
(Source: CPA Australia Asia-Pacific Small Business Survey 2015)
Why the accounting firm of the future uses predictive analytics – and how yours can too