There is one word to describe the future of compliance….commoditized. With a repetitive task eventually systemization kicks in and after that commoditization. Once a product is commoditized then price pressure and new competition takes over. This is what is happening with statutory compliance for individuals and companies.
The reason is simple. Cloud accounting software. New technologies at the clients end makes it far more streamlined, accurate and thus efficient. The data received by the Accountant is more accurate and better quality. There are fewer errors to make at the client end due to the way cloud solutions work. With the data in better shape what that means is that there is less time needed at the Accountants end to finalise the work. The software applications also offer reporting that previously only the external Accountants would provide – such as consolidated executive summaries with key performance indicator variances, budgeting & cash flow analysis.
In the past 18 months I have seen new entrants (Accountants) who have a very low cost base and are offering 50% – 75% reduction on standard compliance work. I am also seeing a growing trend of Accountants setting up teams of people in other countries and offering book keeping & other accounting services for $10-$20 per hour.
The next phase will be when the cloud based systems will offer ‘one click lodgement’ to the government agencies. This will by-pass the Accountant all together for these functions.
The reason this is happening is social change and technology companies who are fighting to remain relevant. Social change says that people want to access information on their mobile device whenever or wherever they want – including accounting and other key business data. It is hard to do that if all the information is on a hard drive at the office!
Technology companies know this and they are either creating new applications that are internet based or they are migrating their current ‘hard drive’ products to be internet based. If they do not then they will go the way of the dinosaur.
Cloud accounting gives the power to the client in real time. Previously the external Accountant had the power.
As an Accountant you cannot stop this. Social change, technology companies and the government are creating this change. You can choose to ignore it or embrace it. Ignore at your peril I say. If you want to embrace it and capitalise on it then you need the right education and tools to help you do that. Starting on March 17 into April 2014 I am running a full day seminar (14 cities) on how you can capitalise on this big issue and amazing opportunity. Go here or more information.