Accounting technology: Closing the client gap

In the last five years, Alan FitzGerald has seen a change in the relationship between the accountant and the client because of the technology gap.

Technology has the distinction of being both the greatest business challenge and the greatest source of opportunity for public practitioners. Here are the keys to success.

At a glance

  • Technology is the issue that CPAs are most concerned with, where the technology gap has caused a change in the relationship between accountant and client.
  • A likely reason for the gap is firms adhering to a tried-and-tested, process- driven model, while clients are becoming more technology savvy.

Technology is front of mind for public practitioners. In the MY FIRM. MY FUTURE. report, published by CPA Australia late last year, technology was voted unanimously as the issue most CPAs are concerned with. Nearly half (45.9 per cent) of the 400 firms interviewed for the report said new technology and digital disruption were the great business challenge for their practice.

As a long-term technology consultant to public practices, Alan FitzGerald of Practice Connections is not at all surprised. “In the last five years, I have seen a change in the relationship between the accountant and the client because of the technology gap,” he says.

The technology gap

FitzGerald believes this gap exists because firms have traditionally been very process-driven, a tried, tested and successful model. Meanwhile, clients are becoming more technologically advanced because, as entrepreneurs/small businesses, their resistance to change is lower.

“Today with the mobile phone as the great technology democratiser, you can set up and run a business from the palm of your hand. [So] there’s this repositioning happening now around how the accountant liaises and works with the client to offer more holistic services.”

FOMO

For practices, the flip side of resistance to change is “fear of missing out” or FOMO. “If they are not perceived to be on the latest greatest thing, many practitioners feel that they must be missing out,” observes FitzGerald.

“Accountants will not buy a piece of software unless it meets 80 per cent of their needs, but the reality is that many will only ever use about 20 per cent of the functionality. They buy a piece of software that they think will solve all their problems, and then they don’t use it to its fullest capability. Then they’ll hop on to the next piece of software.”

FitzGerald advocates a stripped-back approach. “You control the technology, not the other way around. It’s not about new software or hardware. It’s about the strategy around the process. Examine how many steps you have in the current process. Then, look at how they can be reduced to save you time.”

CPA Australia podcast: Listen to the podcast with Alan FitzGerald, who talks about achieving data security in the age of working from home. Listen now.

Embarking on technology change

When considering new technology purchases, it’s important to talk to your staff and acknowledge their views. FitzGerald is currently doing a tech review of a 70-person firm, and he spoke to as many people as he could about their tech needs, including reception.

“You cannot identify issues on the basis of just one person.” Any change in technology should also have a mid to long-term focus, particularly if the partner is planning to retire.

FitzGerald points out that many firms he sees with this aim in mind are working with 35-year-old software – not a great situation if you are planning to attract young, vital incoming partners.

“I know of several examples where the senior partner hasn’t wanted to put his hand in his pocket to update the system and the succession partner has said, ‘I’m out of here’,” recounts FitzGerald. To counter this problem, he recommends sticking to your strategy and enhancing it with modern, flexible tools that “talk to each other”, are easy to maintain, and preferably in the cloud.

Trough of disillusionment

Once a new technology strategy has been decided on, it’s important to keep focused on the end game, advises FitzGerald. “When you embark on a project, the first focus is excitement at how this will change things.

The expectation curve goes up, but then drops of a cliff because staff engagement isn’t there or the outcomes that were anticipated haven’t yet been realised. That is temporary; that’s why it’s called a trough.”

Over the past 20 years, he has seen firms stuck in the trough that have decided to abandon the project and try something else. Instead, he recommends giving the system time to bed in. “In six months’ time, ask your staff whether they would like to go back to the old way of doing things. You are guaranteed that none of them will say yes.”

The human touch

Client communication is also key. “All clients want is consistency. Right now, the marketplace is in a state of flux, where firms are moving from desktop systems to cloud systems. But what I rarely see is communication with clients about systems changing.

Set expectations. Clients will be happy with that because you are communicating. Hiding behind the barrier of having to be perceived to be correct all of the time [does not work]. Explaining before the fact gets you a lot more understanding.”

However, he warns that practice management software does not replace the human touch in any shape or form. “There are applications that can automate a lot of the processes, which is fantastic, but when you automate a process you can lose that human interaction between the client and the accountant. There’s a bit of a balancing act going on now in the market,” he admits.


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May 2020
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