Technology is transforming a variety of industries, and the accounting industry is definitely in the mix. In fact, accounting firms that hesitate to update their technological resources may risk losing business or potentially closing their doors for good. There are three types of accounting firms, according to Jon Baron, a writer for Thomson Reuters, and roughly one-third of them are dooming themselves to extinction by not embracing change and technological transformation.
According to Accounting Today, in a keynote address to the 1,700 attendees of the company’s annual user conference, Synergy 2017, the managing director of the professional segment for Thomson Reuters’ Tax & Accounting business broke the profession down into three segments: “Roughly 30 to 35 percent of firms don’t want to change, and they’ll probably disappear. Then there’s the 60 to 65 percent that use technology to enhance existing practices, but not much more. And the rest—less than 10 percent—are aggressively transforming their firms and diving into technology, and they will thrive. We have all changed because of these technology changes. We have to understand how it affects us in our firms.”
Baron went on to cite many statistics on internet growth and the growing prevalence of technology in everyday life. As the need for technology in business grows, the ones who don’t adapt will undoubtedly fall behind.
Some of the industry’s hesitation in embracing this technological transformation stems from studies about automation. In fact, a recent study found that 86 percent of accounting tasks can actually be automated with current technology. But, according to Baron, “Even when machines do take over an activity, that doesn’t mean that jobs don’t remain in those areas. In fact, sometimes they grow,” Baron said. “And new methods of doing traditional accounting work can bring us explosive growth.”
One of the major reasons that accounting firms need to embrace the changes in technology, are their clients. Firms need to implement technologies like the cloud, which provides customers access to their personal data from wherever they are, whenever they want. Not to mention it gives accountants the ability to work without geographic location or time of day being an issue.
“Clients are consumers, they don’t like paper. They want interaction on their terms, not yours. And they may not want to visit with you in person,” according to Baron.
If accounting firms want to keep their clients and attract new ones, they’re going to have to embrace the technological transformation happening in their industry. If you don’t want your business falling behind, learn about MDL’s managed services for accounting and financial firms.