Rob Nixon, CEO and Founder, PANALITIX, is an industry thought leader whose speaking engagements have taken him around the world. Rob sets the benchmark for change for accountants failing to adapt to a changing industry and his headline presentation, ‘The Firm of NOW, will challenge traditional ways of thinking in the 2020 Theatre at Accountex on Wednesday 11 May 2016, 11.00 – 11.45am and on Thursday, 12 May 2016, 12.00 – 12.45pm.
These are Rob Nixon’s predictions. They are based on 20+ years of advising just one industry in many countries around the world and are based on observation, fact and what works. His belief is that if accountants do not step up, be proactive and add value, then many in the Accounting profession will go the way of the dinosaur.
12 predictions of the profession
The last time I made 12 predictions on the future of the Accounting profession was in 2010. They were bold predictions and I am happy to report that 66% (8) are done and the other 4 are a work in progress, but happening. The profession has changed a lot mainly due to the new threat and opportunity with cloud computing. So it’s time to make another 12 predictions…
- Compliance will be completely commoditized
Statutory compliance is a repetitive task where ‘supercomputers’ are taking over the processing and checking of data. Soon enough the tax departments will install standard business reporting and ‘one-click’ tax lodgment into Internet accounting systems. The Accountant will be bypassed for standard annual reporting in the future.
- Cloud accounting will be installed in >90% small to medium businesses
No one can stop social change. People want their data and information on their mobile device. No one can stop huge technology companies from heavily promoting their solutions to businesses. It’s time to embrace the change.
- Cloud practice management will be in >90% of Accounting firms
The benefits are clear with improved efficiency, cheaper operating costs and mobility. At some point in time the ‘hard drive’ providers who also provide cloud solutions will turn off the hard drive updates. It’s time to embrace the benefits of change.
- Coaches and consultants will take more clients
The one who has access to the financial data owns the long term relationship. It is easy for a ‘non-Accountant’ to help a client get onto cloud accounting and other add-on products. Don’t let someone else get more financially intimate with your client than you.
- Clients will be more transient
One thing that hard drive systems did was make it harder for the client to move Accountants. They had to physically deliver or courier the data to you and thus felt compelled to stay with you. With cloud accounting the data is ‘lite’ data. There is no data to deliver – just a login. The data can be manipulated anywhere. Tighter and more enduring relationships will be needed.
- Offshore teams will be more prevalent
With cloud computing why do you need a team of people in your office? Why not look for labor in other countries? Often the labor is cheaper, more accessible and more willing to work. We already have Accounting firms with full-time teams
- Compliance prices will plummet by 50% or more
Let’s face it. Where is the value in a financial report that is 6, 12 or 18 months old? I understand that the labor costs and archaic systems cause the cost of annual compliance to escalate. With new systems I think the costs will come down to where they should be. Compliance should be value priced…down.
- Marketing and sales skills will be needed
With commoditised services comes price pressure and new low cost entrants into your market. You need to differentiate and make compelling reasons as to why clients should stay with you or move to you. New marketing and sales skills will be needed.
- Young people will not buy into staid and boring
The old models of ‘commander control’ management and hierarchical office bound seniors are not what the 20 something’s want to sign up for. They are not interested in old-fashioned systems/equipment/furniture/offices and boring restrictions. Loosen up Partners – the next Partners are tech savvy and want to progress faster than ever before. Your firm needs to accommodate this. Maybe we need a reality TV show about Accountants. Maybe we need to ‘sex’ the industry up a bit. I think so.
- No more time-based billing
If there was ever a system that denigrated self-esteem and the value of one’s knowledge it is time-based billing. It suggests that the time taken was correct and the rate per hour was correct (based on a silly salary multiple formula) to determine the value of the intellectual property. The industry needs to stop this archaic behavior and value the intellect that has taken many years to develop and hone. Price upfront based on value created not time taken in arrears.
- Business advisory services to be more than 80% of revenue
Accountants can add a huge amount of value when they know the facts. If a client is in trouble they can ‘swing into gear’ and sort out the situation with the bank or tax department. The problem is that most Accountants are swamped by compliance services and don’t have time to add value. That’s all changing and with new technologies that alert the Accountant as to what is going on with the client the Accountant can truly live up to the trusted adviser status that they so richly deserve.
- Clients are finally served properly
It always amazes me that when we give an income statement and balance sheet (of a client) to an Accountant and get them to brainstorm (in small groups) they come up with loads of ideas on what the client can do to improve. Isn’t that what it is all about? Helping the clients. With accurate real time data, Accountants can add value like never before. At the end of the day the client is why most Accountants got into this profession in the first place. I think it’s a duty of care to serve them well.
As an Accountant you cannot stop all this change. Social change, technology companies and the government are creating this change. You can choose to ignore it or embrace it.
Ignore it at your peril I say.
Written by Rob Nixon (PANALITIX, stand A626)
PANALITIX (www.panalitix.com) is the innovation of Rob Nixon, who for the last twenty-one years has been coaching and teaching accountants around the world how to run profitable and efficient firms. More than 150,000 have heard him speak and 16,000 accountants have used Rob’s training products. PANALITIX helps forward thinking accounting firms, shift from compliance to high value services by providing a combination of software, marketing and digital coaching.
Over 750 firms use the software globally.