Threats to Accounting Practices
I recently attended a webinar run by the Proactive Accountant’s Network that reflected my thoughts concerning accounting services.
Fundamentally, they contend that standard accounting compliance work provided by CA firms is being threatened.
They list 3 threats:
- Cloud accounting
- Commoditization of compliance services
Their premise is that the world has changed in the way services are being delivered, which has resulted in the demise of organisational giants. For example:
What is the likely impact of these changes on accounting and bookkeeping work?
Cloud services are taking over and they will do to the practice of accounting what Netflix did to Bonders and Google to Yellow Pages. See http://www.nicksinclair.com.au/2013/05/why-your-accounting-costs-will-decrease-by-30-and-why-your-accountant-doesnt-want-you-to-know-about-cloud-accounting/
Globalization is here and services are being off shored. For instance:
- Repetitive tasks can be performed anywhere in the world at lower costs.
- Bookkeepers and overseas accountants will offer their services for less
Commoditization of compliance services is here. Clients are more transient and more price resistant. Among other things:
- Clients want and expect answers to their business problems
- Coaches are providing some answers and competition
- Young clients want an accountant who is technologically aware
- Clients don’t like time based billing
- Clients want value added services
A 2013 CCH survey reported that:
- 64% of business owners would consider replacing some of the roles that their accountant currently performs
- 53% would consider looking for a new accountant if they are reluctant to embrace cloud based accounting software. See more: http://www.cchifirm.com/why_ifirm/cloud-computing-and-the-accounting-industry
I think their premises are worth considering. Any thoughts?