Transform into a smarter accounting practice

Dream big

Accounting practices today should expect more change from a wider range of influences than ever before. Importantly, this level of change is more than just a digital disruption story.

Pete Sanders, managing director, accounting professionals division for Wolters Kluwer, believes collaboration is the new networking and it’s time for many professional accountants to consider a change of approach.

“Based on our understanding of the relationship Australian accountants have with their clients, they are the reason they know their client’s businesses so well,” says Sanders.  

“Not only are they speaking more regularly with clients but, interestingly, they are discussing businesses in more depth. This engagement between both parties is the natural first step towards wider collaboration.”

Driving innovation for your practice business model

“First and foremost, the adoption of technology and specifically the pace of change around technology is driving innovation for accounting practices,” Sanders continues.

The two key areas where this most applies are:

  • Small business cloud technology adoption
  • Online tools that now form part of normal business process for accounting practices

Moving away from traditional compliance services and developing a methodology to better understand a client’s business are also opportunities to meet changing client expectations.  

Says Sanders: “Clients expect more from their accountants and I don’t think this will come as a surprise to many professional accountants.

“Firms planning a transformation to a smarter practice will need to review their business model and make the most of the tools that are now available.  

"This is part of the journey to transform from what can be a traditional environment, into one that can meet the client needs of the future.”

Online is the new black

Tracey Amott, founding partner at Greenview Accounting Group, acknowledges that its client base is more digitally savvy than ever and has responded accordingly.  

“Going cloud based was part of our strategy to integrate into our client’s businesses for a smooth collaboration process,” says Amott.

Transforming into a smarter practice was made easier with the move from standalone solutions to fully integrated online tools.  

The team at Greenview realised its current – and very long term – accounting practice solution no longer met its needs. Following a two-week implementation process and two-day training program, the practice was up and away in the cloud for its tax, accounting, practice management, content and collaboration requirements.

Initially the move to cloud addressed practice management inefficiencies across client portfolios and even on a job-by-job basis.

Improving the allocation of time for specific jobs, for example bookkeeping, helped produce an 80 per cent uplift in efficiency and productivity outcomes.   

Fully integrated tools link the underlying data and reduce manual data entry tasks.  

“This is part of our touchpoint plan with our clients but, importantly, it has become business as usual for us. We can now take these new tool sets, combine them with valuable information and produce actionable outcomes that differentiate our offerings from the competition,” Amott says.

The latest integration in to the practice is a cloud-based automated tool to match specific events and outcomes with particular clients. Greenview is using it to communicate ATO benchmarks and more with specific clients.  

It is part of the business’s plans to incorporate predictive accounting into everything the practice does.  

“For us it’s all about being prepared to stay on top of the transformation path and understand these new opportunities can deliver new revenue streams, strengthen client relationships and deliver value in what is becoming a more and more highly commoditised environment,” says Amott.

Future revenue streams

Cloud technology is being embraced by the ATO and taxpayers alike, and this is having an impact on current revenues.  

Sanders believes there are significant changes and opportunities ahead.  

Taking a more detailed look into the Wolters Kluwer Tax and Accounting Industry Study 2016 results, he outlines the significant impact in revenues over the past 12 months: “The impact of cloud produced a 10 per cent decline in tax-related services revenues, dropping from 50 to 40 per cent.  

“This should be of concern as a trend.”

He adds: “Greater collaboration with cloud-based bookkeeping and accounting solutions is placing pressure on fixed-time billing, with fixed-price agreements now forming 20 per cent of a practice’s revenue.”

In contrast, a practice could now leverage the cloud. Select practices that have developed in-house cloud-based bookkeeping services have experienced a 25 per cent increase in revenues.

The future experience with the ATO

Embracing change and adding the cloud to your practice is also part of the future experience planned by the ATO.  

In the longer term, professional firms can expect a high degree of change – particularly around what the ATO shares with tax agents and accountants in the future – plus how they will interact with the ATO.

For Patricia Davis, director, practitioner risk, strategy and lodgement program for the ATO, a greater focus on inclusion and collaboration is key to the success of the change program currently being rolled out.  

“Our message is one of change, re-invention and acknowledgement that we understand the world of the professional accountant is changing.  

“Clients can choose to interact directly with the ATO or use a tax professional – our materials and services are designed to reflect this choice,” she says.

“There will be a much different practice environment in the future than is experienced by firms now. Some firms are preparing themselves for this future and embracing change and the opportunities that this brings. From what we are seeing, these firms are coping well,” Davis says.

Firms that are challenged by the trends in practice management need to prepare for a future that will be very different.  

Transformational plans for practice management software, lodgement requirements, portal services, and the role of tax agents and software developers are all part of the ATO’s vision.  

“We believe the future is more than a two-way relationship between the accountant and the ATO. Instead, it will be based on three-way collaboration between the ATO, the accountant and the practice management software provider.  

“This is the future,” Davis concludes.

To learn more about transforming to a smarter practice and the changes ahead, view the Transforming the Future of Accounting Roadshow recording

This sponsored content was brought to you by Wolters Kluwer.

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