If you look at the present from the lens of how the past dreamed of the future, it’s very disappointing. We don’t have robots performing our daily tasks of cooking and cleaning, our cars are still very much groundlocked, and virtual reality isn’t that much different than a View-Master with moving pictures.
It’s no wonder we’re returning to our roots to deal with the disappointment. Vinyl sales are taking off, people are paying a premium to grind coffee by hand, and kids are leaving Instagram for the Polaroid cameras that inspired the app. So is it time to bring back the abacus?
Put aside the disappointment of what technology could have been and focus on what it is for a moment. It’s not the be-all solution to our problems, but that doesn’t mean it’s without any solutions.
In fact, key technology changes in accounting are driving the growth of a lot of your competitors.
If you’re sure you don’t want to make any changes to the old fashioned way of doing things, this might not be for you. But if you’re worried your firm isn’t reaching its full potential, read on for the whats, hows, and whys you need to know.
Why you should care about new technology
The key reason why accounting technology is so important is because of how it’s changing the profession itself. In fact, 37% of small and medium-sized business owners think accountancy is becoming more automated as found in a study conducted by Xero.
This reality means your customers will more seriously consider DIY options when so much of it is done for them.
Clients are also shifting their expectations. It’s no longer enough to balance the books, generate reports, and break down a business’s finances. 72% of small business owners have changed their accounting services because they were reactive services and didn’t provide proactive advice, as found by Accountex.
What this results in is a shift in the accounting industry where the demand will be for consulting and advisory services. As Rob Nixon predicts, 80% of all revenue will be generated by business advisory services.
Simply put, if you’re not adapting, you’re going to get left behind. And part of the adaptation process is evaluating your technology—but maybe with a bit less fear than our friend Woody.
The consequences of not updating your technology
This shift toward tech is a good thing. As a profession, we’re entering a renaissance of accounting automation, full of tools that improve your firm—while freeing up your time to provide more value to clients.
However, we do need to address some potential consequences of lagging in the technology department. So, before you purchase a Roomba to be your new junior bookkeeper, it’s important to understand the problems that will arise and how they can be addressed.
We’ve broken down 4 problems you’ll run into if you don’t update your technology and why it's important to consider.
Poor retention of younger employees
How it happens: The closer you get to the tail end of your career, the less you have to keep up with the times. After all, if you’re already daydreaming of being Caribbean castaway as you’re wrapping up your last month of work, you probably don’t care about updating your accounting tech.
Younger employees don’t have that luxury. If they aren’t up-to-date on industry technology, they’re going to start looking elsewhere for opportunities to develop those skills. The number of CPAs is declining and if you aren’t retaining your younger talent, you’ll quickly encounter staffing issues.
Why you need to catch up: The people who are just starting their career path are more in tune with the latest changes in the industry because of how it affects their ability to make a living. Not to mention, their familiarity with technology can help you identify roadblocks caused by your tech you otherwise would have never noticed.
If you’re going to change the technology you use, consult with the younger talent in your firm. What technologies do they want to learn? Where do they think they’re falling behind?
Capacity crunch relative to competitors
How it happens: The term “digital transformation” might bring to mind the image of making yourself into some kind of digital avatar. But in actuality, it refers to changing up your technology to reshape workflows and processes in your business for new efficiencies.
Why you need to catch up: The more you depend on manual work, the more you have to rely on having the people power to get it done. The opportunity cost of not upgrading your tech to keep up is all the higher revenue generating tasks accounting is moving toward: advisory, consulting, and virtual CFO work.
It also limits the opportunity for growth for any juniors, as their work will mostly consist of the tasks that will be irrelevant when they’re entering the prime of their careers. Not only do you risk missing out on maximizing revenue, but you add to the risk of poor retention we discussed earlier.
Missed revenue opportunities
How it happens: What business owners want from accountants is evolving. Hiring somebody to provide the financial reports and get them ready for tax time is a thing of the past. Now they want somebody to help out in other facets like payroll, strategic advice, planning, and more. But if keeping up on processing transactions and generating reports is eating up your time, you won’t be able to offer the services your clients are demanding.
Why you need to catch up: More services for your best clients means more revenue without the stress of onboarding a new client. Rather than having to import a bunch of financial information and establish a new working relationship, you could instead consult with your favorite clients on what services they most want and add them to your offerings.
Poor client experience
How it happens: Another aspect of not offering the services your clients are demanding is providing a poor client experience. Imagine having to go to a different grocery store for every ingredient you’re about to use in a recipe. It would be frustrating, time consuming, and show a lack of understanding for the customer’s needs. If a competitor grocery store opened up offering all of the ingredients needed, they’d take over swiftly. What can start as a small gap in services offered versus services demanded becomes bigger as that client’s needs grow with their operations.
Why you need to catch up: You don’t want your clients looking elsewhere. If they find someone who can handle one of the services you can’t provide, they can also find someone willing to offer the full suite of services to replace you completely. Retaining clients starts with providing a top-tier service they can depend on, and doing that means being able to meet their needs as they come up.
Are you still clutching your calculator?
When you look at this thinking from the perspective of your clients, competitors, and younger talent—old processes, systems, and tech begin to look outdated.
Upgrading your technology can feel like starting from square one. A reset like that is always a scary thing, but it doesn’t have to be. Instead, you can reframe your thinking to understand that these big changes mean big payoffs down the line including more revenue, better retention of talent, and happier clients.
If you’re going to make a change, make one that has the most impact. With Botkeeper, you can automate account reconciliation, document collection, and report generation. And once you’ve freed up capacity by taking those tasks off your plate, you can use Botkeeper’s onboarding and cleanup services to get your clients caught up quickly.