This post by Hamish Edwards, of Xero, got me thinking. I agree with his assertion that:
"The reality is core compliance work is becoming commoditised and low cost operators are pushing the pricing for this work down".
He then goes on to say that live bank feeds (into clients' online accounting software, like Xero) will be life-changing for accountants.
Bank feeds would represent a significant improvement in accountants' quality of life, by eliminating some "grunt work", and should lead to productivity gains but I am not optimistic that accountants will fully grasp the real nettle.
My guess is that, within a decade (actually, I would bet 5 years max), client small business owners are going to be 90% self-sufficient on the compliance side. So it's not a case of accountants needing to re-engineer processes to make compliance work economically viable - 90% of this work is going to totally disappear, simple as that.
Accountants are, for much of the traditional work they do, simply "middlemen" and women. We can see where other middlemen have been crushed by the Internet - for instance the high-street Travel Agents and Insurance Brokers (with Estate Agents soon to follow). The future is one where small business owners work with Xero/Kashflow/FreeAgent for their compliance needs - who needs an accountant getting in the way, and adding cost?
Of course, the software vendors know this. In the meantime though they need accountants to help them on-board new businesses and the accountants need them - to be able to connect with the new breed of client who "gets" Saas and wants an accountant who is comfortable with that. Let's not kid ourselves though, that the relationship between the accounting software companies and accountants will be anything like as cosy in 5 years time.
None of this should worry any accountant readers with imagination.
Those with imagination will already have begun moving the focus of their practices away from compliance work and on to monthly "virtual CFO" and strategic planning services. But, for those lacking imagination and the will to change, the inevitable future is going to be bleak, I believe.