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What another load
of hogwash. Where do these people get off with trying to tell professionals how to go about their business.
If a footballer is 60 years old and gets a goal every match do you not play him?(yes of course you do until he gets the goal, then you take him off).
Accountancy is not about automation and the quicker you marketer type sales people realise that the better.
Now you have to ask yourself the question why are we professionals. The answer is, that in order to give advice and options to business, we undergo training and then develop experience which gives us an insight as to problem solving. Yes of course others think they can come up with answers but they will all be linked with some kind of marketing gimmick, which then takes away the real objective.
A simple example of this is an Accountancy package. Some Accountants actively push say sage, because it might be easier for them or they might get commission. However it could be that a different product say quickbooks might be better suited for a particular client.
If you want to look back in time you will find we haven't changed that much. The only thing that has changed is technology. Unfortunately good technology is nearly always wiped out by bad technology.
CHANGE!!!!
Through www.help4lips.co.uk we are attempting to help litigants in person (there are 1m of them forecast) better comprehend the legal profession.
My personal views on double entry book keeping, and how it needs to be consigned to history (in favour of Econometrics and accounts based on cashflow) are well known to anyone who reads my "Mad Lemming" blog.
In other words, I support what the Susskinds are saying in their book
Sorry, I'm retiring
We have around 150 business clients and almost none of them use accounting software, though we do for a few. Most of our accounts are prepared on spreadsheet.
Yes, I know it is old fashioned but it works for us. Many of the clients do not have the computer skills or equipment to go digital themselves and we do not have the time or resources to take on more work, so I am preparing my exit plan now.
Worrying
I've been with a client this morning. One of the directors does their record keeping on Sage. She passed an online course a couple of years ago and has a certificate that effectively states she is a qualified bookkeeper but her abilities are average at best - invoices and payments both posted to P&L is not untypical. It's worrying to think that within a few years automation could mean she files her own profit statements with HMRC. She doesn't pretend to know what she is doing, can't reconcile the bank but she has a software program so in future all will be good, apparently.
I agree, most users of Sage have no idea, they buy an idea not a solution. (yes more management speak).
Double entry bookkeeping
is a very easy form of Accounts preparation, Debit/credit, ying/yang. It creates a healthy balance. When you start replacing or eroding healthy balances, values go down the pan. I suspect two of the reasons the world is in an economical and conflictual mess is the erosion of values, and the demise of both capitalism and communism. In other words when the status quo is compromised all hell breaks loose.
I believe a lot of professional Accountants (quals and unquals) will leave because the changes are too rapid and have been developed upon whims and greed. I'm sticking around to pick up the pieces.
"Reverence for traditions..."
The transition from paper and spreadsheets to bookkeeping and accounts production software is a problem faced by small businesses, not by their accountants.
It's a different mindset
This article reflects the need, in my view, for a change in mindset both inside and outside the profession, regardless of age. Sorry johnjenkins.
Certainly in the music and creative sectors, where we specialise, much of what we do is way beyond compliance - although that will always be important - and about business advisory and business management work and that's where much of the knowledge-value lies in our training. There is a great deal more collaboration between us and other professionals - tour managers, promoters, business funders, lawyers - than ever before and the ability to automate as much as possible to give everyone a clear line of sight of all the relevant financial elements, in 'real time', is essential for making the best business decisions. This isn't about marketing, it's about common sense.
As has been rehearsed many times already in AccountingWeb and elsewhere, compliance is ripe for automation to free up time for the more challenging (and arguably interesting) aspects of the accountant's role and is potentially changing the perception of accountants with people outside the profession.
Yes, I know it is old fashioned but it works for us. Many of the clients do not have the computer skills or equipment to go digital themselves and we do not have the time or resources to take on more work, so I am preparing my exit plan now.
Sorry, Homeworker, but that argument is exactly the wrong way round. In just two or three years, we have moved from limited digital working to Xero Platinum Partners. But we also use other digital systems, as do many of our clients. Yes, we still work with clients using old-fashioned spreadsheets, but fewer of them by the month.
Why? Because automation helps reduce time within our own business and, with initial support for clients, within theirs too. The automation and integration between systems - including IRIS and others - is happening because of the recognition that automation can add value to our profession and to the people we work with on 'the outside'.
@Nick
Don't be sorry that you disagree with me. Debate with differences of opinions is what it's all about.
Most of us are professional Accountants (quals or unquals) but our mind sets are different. Some love automation, some don't. Some people love walking, some want to travel in space. Why is there a need for a change of mind set? Why should we all use smart phones? etc. etc.
I always love that phrase "add value". Do not assume that Nick.
I could increase my turnover easily by using different marketing devices but it would devalue my business as I wouldn't have the time to be able to service my clients who choose me because of the way I do business. Automation of accounting records should be a natural progression not something that is forced upon us through greed and incompetence.
@Nick
Talk about IRIS. Look at the crap way they have handled Drummohr tax shift from desktop to the cloud. Absolutely diabolical. See us professionals all know what's going to happen when HMRC demand Digitalisation.
Here We Go Again!
Software Systems already use what are called Knowledge-Driven Systems and Neural Networks.
Real AI (As distinguished from Artifical Intelligence which is banded about by those who really ought to know better...) is a long way away. More anon.
Knowledge-Driven Software (KBS) has an embedded database of answers: OK so far. Thus, e.g. solicitors can generate a lease, will, codecil, whatever around the outline of a WP (World Processor) document template and seek advice in terms of precedent clauses: (i.e. those proven in case law).
We already suffer dumb-brained salesmen and women with their eye on the big buck, touting wills. Problem is they all use KBS since :
1. They are not solicitors:
2. They have little or no knowledge of law:
3. A laptop and KBS are a nice little tool for earning well above their skill sets and ability.
Real AI seeks to capture the skills, knowledge and lifetime study of a real person: and then, regurgitate this on demand.
However, we aint there yet! By a long chalk.
We must all agree, the days of the little guy hunched over his desk with sharp pencils creating analysis from the muddled contents of a large cardboard box are almost past. (Interestingly, in my experience, the most successful practitioners in those days, in any case didn't bother to develop true records, but simply used ratios in cashflow: same as what was the IR).
However, can we expect the huge number of self-employed traders and partnerships wo are, sadly increasingly innumerate and quasi-literate to accurately deal with ANY bookkeeping system, where it is PC/Network hosted or in Cloud?
( https://www.tes.com/article.aspx?storycode=6042996 )
Really?
There's no doubt that this is happening. What I think we're tasked with now (you guys as a profession and us as a society) is figuring out how things are going to change, who and what is going to be affected and how we deal with it.
@John, I don't think its helpful just to label the Susskinds' thesis as "hogwash". I'm sure they could be wrong, but they are at the coal face, trying to understand what is shaping up to be the BIGGEST societal change in human history. I'm talking industrial revolution x 100.
In the medium term, it will change the way we work. We'll most likely, in the long term, graduate into a post-work economy, radically removed from the concept of working for money.
Not a "Debate"? Thus why allow comments?
It is very easy, as an academic (Which I am and was: and awarded the sobriquet of "Mr Real World Man!", at the BSchool conferences I was compelled to attend as a External Examiner and Moderator. Of which I was extremely proud!), to star gaze and neatly ignore the temporal World... this is called a Cognitive Disconnect.
Yes: the Paradigm Shift in business, social and normal life has already taken place; thanks to the WWW and Internet. Was this a Quantum Leap, however?
Clearly, no. As Vin Cerf, one of the architects of what was to be, said, the internet was is and would be a "disruptive technology": it would, forever, change the way man interacted with each other and the World around him and her.
As one example, when I was working on IBM SYStem 360 Mainframes in 1966, the lead System Analyst stated "In a few years, we will simply speak to the computer and say "Do the wages!"...
I am still waiting...
At present we are all going through serial Step Change: not Quantum Leap.
@Michael
I too worked on an IBM system 360. I think it was model 10, but I know it had a floppy disc. you will no doubt correct me.
I was in charge of Accounts receivable (although assistant accountant) and I always remember the long account numbers we had to allocate so that you could fit in new accounts. Anyway the point was made by Fred (the programmer) that very soon all the stuff in this office (computer suite) would be able to fit in a portable phone. He's not far off. I do agree, however that it is more of a serial step change. It has to be so that people can play catch up. What is annoying is while we are gently leaning the new stuff, HMRC want to go from low tech to high tech and expect every business to keep up to speed. It won't happen.
@Francois must learn to live in the global world not just the cloud you accommodate.
Luxury! Sheer Luxury!
I too worked on an IBM system 360. I think it was model 10, but I know it had a floppy disc. you will no doubt correct me.
I was in charge of Accounts receivable (although assistant accountant) and I always remember the long account numbers we had to allocate so that you could fit in new accounts. Anyway the point was made by Fred (the programmer) that very soon all the stuff in this office (computer suite) would be able to fit in a portable phone. He's not far off. I do agree, however that it is more of a serial step change. It has to be so that people can play catch up. What is annoying is while we are gently leaning the new stuff, HMRC want to go from low tech to high tech and expect every business to keep up to speed. It won't happen.
@Francois must learn to live in the global world not just the cloud you accommodate.
Floppy disc? Floppy Disc?
Sheer luxury! In my -early - days, all data input was by punched card; programs were carried on high speed 9 channel tape (which often snapped), and VDU's were a rumour.
Core Storage Memory was Ferrox Cube.
All output was on Fanfold Opera Sheets, which could easily cut fingers...
After six months of doubling my salary with overtime, in a special task force, trying to make the - very advanced system actually work properly - we all worked out what IBM stood for: It's Better Manually!
The company (Ford Europe) had four 360s in the UK: @ $1,000,000 each per annum rental cost. Then you couldn't buy them. Languages were FORTRAN and COBOL.
Leading Edge: problem is here, John, the Blue Sky visions of system architects and techies, rarely if ever translate into extant real World usable applications which deliver all the front-end project design parameters. One of the biggest problems of all is System Integration: i.e. making disparate software communicate and translate without conversion errors.
And it is here, I fear, HMRC will fall over their own feet - again - by buying into visions rather than hard, cold reality.
You're right CHANGE
Francois
You are corrcet:
The legal profession is aiming to have some disputes resolved by Computer within the next four years.
They will learn from the likes of Amazon and E-bay.
We are already attempting to provide information, and have been doing so (very badly, as we are massively under-funded) for the last 3 years.
Accountants are going to be stuck in the 19th Century until they see that cashflow and Econometrics need to replace double entry as a basis.
Article made me laugh.
I love ivory tower academics spouting forth without any knowledge of what it's like in the real world.
Down here at the coal face any attempt to force people to move to digital tax systems and online reporting quarterly will mean a huge increase in work for accountants, as most clients don't want to be their own accountant (hence why they appointed us in the first place). They would much rather run their business and leave it to us to sort out the 'mess'.
How the information is recorded doesn't change this. In fact, the more complex the system used to record the information the longer it takes to sort it all out.
The problem is that the people pushing the 'reforms' have no concept of the real world or are advised by huge firms where most clients have dedicated departments running the already heavily computerised accounting functions. They then come up with ideas based on that mind set rather than looking at how it might apply to the semi literate non-english speaking self employed person.
@Michael
I did work on a tabulator, NCR, comptometer and I had to write a flowchart for bathing a dog. All simple stuff really.
The trouble with HMRC digitalisation is they are going from vey low tech to high tech whilst missing the bit where you learn what bits work and what doesn't. Still we can always send Francois and co to sort out their mess.
I dont know if anyone has thought of this already...
but I have just received an invitation to discuss a "solution" to the problem of non-computer literate clients (no doubt more will follow) in which it was suggested that the data could simply be downloaded from the clients bank account.
This prompts me to ask: will clients therefore need to have separate bank accounts for their business/letting activities in future? Many small businesses and landlords (I suspect) do not and this may well involve extra costs, but would this also give HMRC easy access to all of your private data?
Right!
but I have just received an invitation to discuss a "solution" to the problem of non-computer literate clients (no doubt more will follow) in which it was suggested that the data could simply be downloaded from the clients bank account.
This prompts me to ask: will clients therefore need to have separate bank accounts for their business/letting activities in future? Many small businesses and landlords (I suspect) do not and this may well involve extra costs, but would this also give HMRC easy access to all of your private data?
I'm sure Fred the window cleaner regularly puts all his accounting transactions through a dedicated business bank account, so he will be OK then.
The Core Decision:
Will we be determined to manage ICT?
Or will ICT manage us?
What is called Big Data is trying hard to manage us...
I am very anti change, but it will be those Accountants that jump on board early that will prosper, was it just me or was there lots of management speak in the above article.
Here we go, the Accountant will be at the heart of most businesses, i hope not for all our sakes.
Change for improvement is a good thing (double glazing). Change to a bad thing MTD (5 returns instead of one)(demanding business keep records HMRC way) won't be tolerated.
There is no difference to an Accounting package in the cloud or on a desktop. Oh yes in the cloud it can get hacked easier. I'm glad there are Accountants that "pave the way" for us mere mortals.
John:
Perhaps we can define the role of the accountant in this fast changing World as making sense from the nonsense clients fondly imagine are their "accounts".
Clients rely, absolutely on various professional advisers; if they possess much common sense.
From the inception of what is more properly called EDP (Electronic Data Processing) any computer from a standalone PC to Cray Supercomputer onwards thru the massed array of virtualised servers in the stupidly called "Cloud" (it's a system, stoopid, in a data farm or data centre!), there was an old expression: GIGO.
GARBAGE IN GARBAGE OUT!
When I stop reading about banks and telecoms companies and even more serious, the massive US data host, dyn,
was broken into and brought down huge chunks of the internet, then I will believe these rocket scientists are getting somewhere at last. I am not holding my breath, though...
http://www.theverge.com/2016/10/21/1336234/dyn-dns-ddos-attack-cause-out...
Academics, tend to write books about the future, which are based upon their own area of expertise (economics?) and synthesise possible forward changes on what might be possible, what could be possible and what they would like to see possible!