In the coming years, the accounting firms that adapt to our industry’s ongoing innovations are going to have the brightest futures.
But what separates the firms that are going to thrive in the next age of accounting from those that are going to fall behind?
Here at Inflo, we believe it comes down to the three C’s: capabilities, competencies, and commercial.
In our opinion, firms that can have all these elements in place will take the sea change the accounting industry is set to go through in the next few years in their stride.
Here’s a closer look at each of those elements:
The first thing any firm that wants to thrive during the next age of accounting needs is to have the capabilities to receive real-time transactional data that will allow them to understand their clients’ businesses from the inside.
To achieve this, they’ll need to invest in technology that will allow them to advance from retroactively analysing summary-level information of the previous year. This is the first step in moving from providing compliance to an advisory role, which will be key for audit firms in the future.
If you haven’t already began exploring ways to gather real-time financial data from your clients, we recommend you start today with a trial of our software. If you don’t have these capabilities in place within your firm, you’re at risk of being outpaced by your competition over the coming years.
The second C is competencies, which are absolutely essential in the shift from compliance to advisory work.
In our eyes, this involves moving away from the compliance checklist mentality as a firm and getting used to asking the probing questions that will help you understand your clients’ businesses better and step into a more advisory role.
This is a fundamental shift in the way auditors work, and therefore involves a whole new set of competencies that revolve around proactively identifying ways that your clients can improve their processes, rather than providing them with a report of what happened last year.
The third and final element is the commercial aspect of this innovation.
The way your firm frames the benefits that come along with your firm adopting data analytics software is crucial to its commercial success, which is why we recommend that you don’t try and sell your clients on the fact the latest technology will make you more efficient.
While software such as our own will lead to several efficiencies within your firm, it will also make you much more valuable to your clients. By leading with the extra value you can provide – more confidence over their numbers, an objective third-party perspective on how their business is performing, and financial benchmarking against their peers – you can become invaluable to your clients.
Rather than being asked to reduce your fees because each audit requires less man hours, you can instead shift to providing a continuous service and even shift to a subscription-based model.
The commercial aspect of innovation in accounting is the crucial final step. Get this right and your firm can develop even stronger partnerships with you clients, who will come to see you as indispensable. Get it wrong and your clients will be left wondering why they should be expected to pay you the same amount for an audit that’s taking you less time.
So, there you have it – the three C’s of innovation of accounting. Get all these elements in place in your firm and you’ll be set to thrive in the next age of accounting.