Five ways the accounting industry has changed

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This article was originally published at https://www.freeagent.com/blog/how-the-accounting-industry-has-changed/

The deployment of Making tax digital for income tax self-assessment (MTD for ITSA) in 2024 will mark a significant change for the UK tax system, but the accounting industry has been evolving steadily for decades. More recently, technological developments and the Covid-19 pandemic have altered the role of accountants and bookkeepers in several ways. Here are some examples.

1. Go to the cloud

Technology is a major driver of change in the accounting industry, and the advent of cloud accounting software is one of the most significant developments the industry has seen in recent years.

Cloud-based software like FreeAgent has transformed the way day-to-day accounting is managed, allowing accountants, bookkeepers, and their clients to automate many administrative tasks and reduce the risk of human error.

2. Work in real time

Cloud accounting and innovations like Open Banking give accountants and bookkeepers a clearer understanding of their clients’ finances than ever before.

While traditional accounting methods only allow practitioners to examine historical financial data, these digital advancements make it possible to monitor business information in real time. This allows accountants and bookkeepers to work proactively, identifying opportunities and highlighting potential problems as they arise.

This level of visibility can also improve financial forecasting. If practitioners and their clients analyze the data, they can collaborate on a strategy that will ensure continued business success.

3. Improve communication and relationships with customers

Good communication is a crucial part of any successful relationship, including that between an accountant and his client. Advances in technology and the Covid-19 pandemic have both had a significant impact on the way accountants and their clients communicate.

While in-person meetings and phone calls were once essential, social media platforms and video conferencing software are now just as important for positive and productive relationships.

These handy tools allow accountants and bookkeepers to have one-on-one meetings, share documents and information, and even host webinars to resolve queries quickly and easily.

4. Diversify the role of accountants and bookkeepers

With daily tasks such as payroll and data entry being processed digitally, accountants and bookkeepers can spend more time on advisory services that add value to their clients.

Rather than calculating numbers and correcting human errors, practitioners can use their expertise to advise and support clients on forward planning, money-saving opportunities, and growth strategy. This development blurs the lines between accountants and business development consultants.

While some business owners have been keeping their accounts digitally for years, everyone affected by MTD for ITSA will need to use compatible software from April 2024. Therefore, guiding clients through the transition and educating them on the use of cloud accounting software is likely to become an even more important part of the role of the accountant in the near future.

5. Possibility of specializing

The Covid-19 pandemic has been a catalyst for change in almost every industry, and the accounting industry is no exception. Remote working has become normalized, with geography becoming less of a barrier when it comes to retaining new customers.

Rather than searching for accountants and bookkeepers based on their location, business owners can research the practices that best meet their needs, even if they are further afield.

Having fewer geographic restrictions can also allow practitioners to specialize in a particular area. For example, an accountant may offer dedicated strategic growth services to target start-ups.

Want to find out what awaits the accounting industry in 2022? Subscribe to our upcoming webinar to learn more.


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