Prior to the pandemic, people were making predictions about the accounting profession dying out in the near future. What with the advent of cloud technology, automation, artificial intelligence (AI), and machine learning, businesses were beginning to think that they didn't need accountants any more. After all, a lot of the cloud accounting software available today is geared towards businesses.
Moreover, the extinction of accountancy isn't such a stretch of the imagination when you consider that around the world, roughly half of the activities which people are currently paid to do could be automated with existing technology. Researchers have predicted the end of the entire middle class, never mind just accountants!
But, this isn't a doom-and-gloom type of article. Contrary to all this chatter about accounting being a "dying profession", accountants were in high demand when crisis hit in 2020 and continue to be in high demand now. One of the reasons for this is that many accountants responded to the pandemic by transforming from number-crunchers to trusted advisors. As noted in my article on the accountant as an artist, accounting entails so-called "soft skills", such as problem solving, which are the one real advantage people have over software. In other words, the power of accountants isn't just in the math; it's in the human element of their work.
🔎: And, in case you're curious about what happens when people try to fully automate accountants' jobs, look no further than the disaster that was ScaleFactor.
So, in this time of increasingly rapid digitization, why should you turn to more people-oriented work like offering advisory services? I've collated 5 top reasons for you to consider here.
1. You're meeting client demands
The accountant of the future is certainly different from the old-fashioned idea of a middle-aged man in a suit collecting old receipts and rifling through stacks of paper... For one, the emergence of cloud technology has changed the way that we store and analyze information, and for another, client demands have shifted over time.
According to CPA Australia's "My Firm. My Future" report of 2019, the demand for accountancy work is strong within small and medium-sized enterprises (SMEs), who expect accountants to take on more advisory roles in their businesses. One in five SMEs in this report stated that they would like holistic business plans from their accountants. And this trend has only strengthened over time.
Attitudes towards advisory are shifting thanks to the economic uncertainty created by COVID-19, and as accountants are typically considered to be trustworthy people, businesses are turning to their accountants more and more for data-informed advice. According to an article by Sage Business Cloud Accounting:
"There is an enormous opportunity for firms to use advanced technologies and tools to augment their core offering with value-added services. In other words, rather than cementing the demise of accountancy, the surge in digitisation is enabling the transition from the traditional accountant to a trusted advisor."
That's the great thing about accounting software - it makes the mundane aspects of your job much easier and more efficient. And, crucially, it saves you time on client reporting. Technology is a key enabler when it comes to meeting clients' demands.
2. You can become the ideal data translator
Businesses accumulate a lot of data, but making sense of this data is where an accountant or bookkeeper comes in. Despite accounting software's user-friendly nature, many business owners are simply not equipped to make sense of their numbers on their own. As Deloitte's accounting advisory paper notes:
"Organizations are generating and accumulating data at an unheard of pace, data that represents an important but relatively untapped, strategic asset." - Deloitte
Clients seek out advisory services to help them make sense of this data and use it to make better business decisions. While advisory skills cannot be replaced by technology, technology can better enable such insights. This is tech at its best - working as a complement to your skills.
🔎: To learn more about breaking down the chart of accounts and making data clear to clients, read our blog here.
3. You can generate increased revenue
Going from compliance to reliance means that you can turn once-a-year and tax-focused clients into regulars who you see on a monthly or quarterly basis to discuss their business. This means that you have more upsell opportunities and you can also generate more revenue per client by increasing client meetings with monthly financial health consultations and other advisory offerings.
In a nutshell: you can make more sales with the same number of clients.
4. Value-add for clients
Offering advisory services on top of regular accounting or bookkeeping work maximizes the opportunity for your clients to gain value from what you do.
Advisory services include value-added services that clients either don't have the time to do, can't do for themselves, or don't want to do for themselves. As an accountant, you have the ability to provide tailored advice and share informed opinions on your clients' financials.
5. You can build better relationships with your client base
By spending more time with your clients, you will build better relationships with them and gain a better understanding of their businesses and what they stand for. This also means that the more time you spend with them, the better your business advice will be as it will become more tailored to their experiences and needs.
This, in turn, means that clients will likely be satisfied with your services and come to trust your judgment and expertise over time. And better relationships with clients means improved client retention and the possibility of growing your client base through word of mouth.
Different types of advisory services to focus on
With all these benefits in mind, it may be worth considering the kind of advisory services that you may wish to branch into. These include:
Financial advisory - addressing the financial health of the business and making recommendations about how to achieve business goals (using forecasting, budgets, and cash flow planning);
Process advisory - eliminating waste within a business to create a clean working system (creating a process map or value stream map);
Apps advisory - improving workflow by leveraging technology and cultivating growth in systems that were previously marginal (selecting apps, create a tech stack, and using app connectors to import or export data);
Compliance/forensic advisory - providing guidance to clients to protect them from fraud or illegality, and analyzing financial information to uncover information than can be used in legal proceedings (setting up accounting systems, helping with audit and tax, workers' compensation, assistance with loans, etc.);
Successor advisory - helping strategize the passing on of leadership roles, ownership of the company, and so on; and
Transaction advisory - M&A due diligence support, M&A integration, divestiture transactions, IPO readiness assessments and execution.
Advisory isn't a one-size-fits-all offering. There are many different ways that you can use your knowledge and expertise to provide clients with valuable advice.
🔎: For pro-tips on how to provide actionable advice to clients, read our blog here.
So, what do you think? Is advisory the clincher that will keep accountants in business in the time of AI and machine learning? Is this a service you're thinking of investigating and offering further down the line? Change can be daunting but, if the past year and a half has taught us anything, it's that change is vital for our own survival - and the future really is an unknown country.
Syft can help you move into advisory services by saving you time on client reporting and by generating clear insights in a simple, understandable, visual format. Book a call with one of our team members to learn more about how we can help your accounting practice 🚀