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What does the future hold for accounting? AccountingWEB A picture of a future gazing accountant
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What does the future hold for accounting?

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What could a firm achieve if it threw its hat into the innovation ring? Will Cole talks to flinder CEO Alastair Barlow about the future of technology in the accounting profession.

10th Oct 2023
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With the Making Tax Digital for income tax self assessment (MTD ITSA) can kicked further down the road, firms who have spent time and resources prepping for the big switch are now suddenly free to focus on other, more innovative projects to help propel their firm to that next level.

This newfound freedom could be the catalyst for some exciting new developments across the profession. Yet, while no one can profess to know the future, there is some merit in speculating what a firm that puts innovation at the heart of its operations could look like in the near future.

Innovation from the outside

Not saddled with the inordinately heavy baggage of MTD, Alastair Barlow, founder of flinder, has instead focused his time on ironing out inefficiencies and innovating his business into a forward-thinking and tech-savvy operation. However, when asked to commit to a bit of future-gazing, Barlow argued that, unlike other sectors, traditional accounting is still grappling with a lack of forward-thinking firms.

“Compared to the technology world, you don’t see any overnight success in accounting. There’s 42,000 accounting firms in the UK and yet, there’s no dominant player. That’s because firms, especially those with the business model of a partnership, lack agility and flexibility,” said Barlow.

Because of this, Barlow contended that, rather than coming from within, innovation will more likely come from outside players, with firms hopping on the bandwagon after seeing positive results.

“I feel that innovation won’t come from within, but will instead come from outside. Of course, you will have a small portion that will innovate from within the profession, but real innovation, I think, will come from forward thinkers from outside, rather than established firms.”

Wide net vs a niched approach

Asked what he thought the future held for these innovative disruptors, Barlow believed that firms will go one of two ways: a widening of services or a granulated niche, with the traditional firm becoming a less and less profitable operation as new developments change the profession.

“We’re already starting to see some of the more advanced pioneer firms saying: ‘Hey, I’ve got a good relationship here. I’m selling consulting services, let me sell HR, let me sell legal services,’ and so they’ll start to expand,” Barlow said.

“On the other hand, I think weirdly, you’ll then see some firms really niche down. Firms that figure out that they’re really good at offering a specific service and don’t want to spread themselves too thin.”

Seamless experience

Asked to dig a little deeper and put forward a more fantastic image of what a firm that has truly put innovation at the heart of its operations might look like in five years’ time, the term that Barlow continually returned to was “seamless”.

According to Barlow’s predictions, the future accounting firm has ironed out the inefficiencies that plagued its predecessors, with tech taking a leading role in “eliminating human subjectivity” from the profession. 

“My future firm would have all processes basically create a seamless journey,” Barlow said, predicting that the work that has long been the accounting world’s bread and butter will become increasingly automated as automation technologies continue to improve.

“A future accounting firm with enough capital could have its own large language model (LLM) and a set of reporting tools that can be verbally accessed, like Siri, by clients. You could ask for a daily update and the AI could seamlessly create unique reports for clients.”

However, Barlow also admitted that this creates a problem for the traditional accountant, meaning they too will need to evolve and adapt in order to stay afloat.

“People will need to have very strong business conversations and understand their clients’ businesses, not accounting. They’re the ones that have the relationship and take the business owner through that journey, but as much as possible the rest of the firm would be completely seamless.”

This article is an extract from our new editorial special report: “The practice innovation handbook”. Download it now to access expert advice and real-life examples to help you identify areas for improvement in your firm and make changes that will drive innovation and boost efficiency.

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