With the rapidly growing popularity in automated bookkeeping software and cloud accounting, do accountants need to be concerned about the future of their careers?
The accounting profession has evolved significantly from the days of shoeboxes and manual cashbooks into a world where sophisticated accounting software is the norm. With the introduction of bank feeds, invoice scanning and deposit recognition, the data entry function of the accounting process has certainly become a largely automated process.
This automation will most certainly improve and it is likely accounting records will largely be created with very little manual input in the not too distant future. But does this mean that accountants will cease to exist – most certainly not!
The value of having an accountant – either outsourced or in house – is not in the data entry but in what they can add to your business. A good accountant operates as a strategic partner in your business, offering insight into what the financials mean.
In the past, business owners and their accountants would make decisions based on figures that were often out of date. With automation of the data processing, we have up-to-the-minute information about how the business is performing – enabling much more informed decisions to be made. We can quickly see if something is affecting the business’ profitability and commence rectification before a serious loss is suffered. In this regard, the readily available data only improves the benefits obtained from working with your accountant.
While numbers are certainly meaningful in a business, in isolation they are not particularly helpful. An accountant’s familiarity with the specific goals and intricacies of your business cannot be replaced by software. Their knowledge of your business and businesses at large enable them to provide guidance in relation to your specific business direction.
Succession planning, an important element of all business lifecycles, requires consideration not only of the numbers but also of personal and emotional considerations associated with being a business owner. This process is so specific to each business owner’s circumstances and could never be replaced by automation.
In hard copy, the federal tax legislation and regulations comprise three significant volumes. Add to that the Superannuation Act, legislation for the goods and services tax and state-based tax legislation, and there is no argument that the Australian tax system is exceptionally complicated. With businesses operating through a variety of structures, often involving multiple entities, it is necessary that financial figures are reviewed by someone with not only the knowledge of the legislation but the ability to consider the big picture and take advantage of opportunities for more appropriate structuring or transacting. The lateral and creative thinking required makes this very difficult to automate.
In the next decade I expect we will no longer be driving our own cars or entering our own financial data into accounting software, with automation of both processes. However, the role of an accountant as a business partner will continue to thrive.
Maree Caulfield is a director of taxation at MGI Adelaide.