Is technology making my accountant redundant?

Posted by cverrier on Tue, 14/07/2009 - 13:03 in Blogs 1766 2 comments | report

I'm a (very) small business - I set myself up as a Ltd Company when I went freelance about 18 months ago, and one of the first things I did was to get myself an accountant.

At about the same time, I also set myself up with an SaaS provider (FreeAgent Central) who offer a bookkeeping product specifically aimed at freelancers and contractors.

What I've been noticing, however, is that I keep finding myself politely declining offers to do this, that, and the other from my accountant - because my software is already doing it...

- Calculating and generating payroll schedules
- Generating VAT Return figures (including FRS adjustments)
- Quarterly PAYE returns
- Generating Dividend Vouchers
- Calculating Corporation Tax liability
- Reminding me about payment deadlines for all of the above

I know that FreeAgent isn't the only product around that does this sort of stuff now. Any old software can handle the record-keeping and reporting - but the next step is doing something useful with the raw information to actually help the business owner focus on what matters. Xero , for example, seems to be going from strength to strength - making real inroads into MYOB's Sage-like levels of market-share in New Zealand for precisely this reason.

I'm well below the audit threshold, and only need to file the most abbreviated of abbreviated accounts. It's only a matter of time before SaaS products like FreeAgent will offer to generate and electronically submit those for me too.

From my accountants perspective - I'm pretty low maintenance. I think I've emailed a procedural question now and then, but that about it. I provided them with a login to my books, so they could get whatever they needed from the live system. I don't think I'm ever going to trouble an audit dept, and I'll probably end up using a copy of TaxCalc to do my personal return as it's less work than filling out my accountants' personal tax questionnaire (paper based). The only real chance of some meaty work is if I get slapped with an IR35 investigation or similar.

So - do I even need an accountant? Do accountants need clients like me?

My point is this: An awful lot of the (chargeable) jobs that accountants have taken for granted are becoming commodities that software is perfectly capable of doing, and is increasingly capable of delivering direct to clients. What are firms going to do to replace that work?

Comments

Maybe but it depends on the client

raybackler | Thu, 16/07/2009 - 12:02 | Permalink

I would say that the vast majority of my clients are apathetic towards accounting and tax. They want to run their own businesses where they are experts in their field and leave the number crunching to an accountant. However, there are many who workin positions where computer usage is high, who want to understand much more about how the accounting is done. But there are many pitfalls. I often take over accounts where people have had a go and I end up sorting out the mess. I would be surprised if an accountant could't make some improvements for you.

Fair point

cverrier | Thu, 16/07/2009 - 12:27 | Permalink

Maybe I am in an unusual position - I'm not an accountant, but I have actually implemented and trained on using bookkeeping systems, so maybe I just wrongly assume everyone has some grasp of bookkeeping basics.

Increasingly though, good software is appearing that sucessfully hides the complexity and prevents you from doing stupid things. VAT Returns are a good example - my software has a screen that gives me the nine VAT Return boxes, laid out identically to the return - all I have to do is transcribe the figures.

Could my accountant help with making sure I'm running efficiently? Yes, they can - but my post was trying to suggest that too many firms stop at the mechanical compliance processes, and DON'T seek to advise unless prodded, and those firms are the ones who are going to lose small clients who discover that mechanical compliance can actually be done....mechanically.

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Putting Computers into Practice

Charles Verrier has worked with IT systems for the accounting profession since back when the Internet was all fields.

For many years, Charles was Product Manager for 'Singleview' - the Document Management system marketed by Solution 6/MYOB.

He now works freelance after many years working for assorted suppliers to the profession. Charles is not an accountant, but he does hang around with them a lot.

This blog focuses on all aspects of IT and its application to accountants in practice, with occasional forays into pure technology and geekery.

(old hands may recognise the blog name as a tag line used by MICL many years ago. It's not used any more, and I'm pretty sure I came up with it in the first place!)

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