Xero foresees automation advantages
Amid the turbulent times of Brexit, Xero recently released a study predicting what the future would look like for UK small businesses and their accountants. Gary Turner shared his own commentary on the findings with AccountingWEB.
Almost half (46%) of UK small business owners surveyed were concerned about the future, so Xero enlisted tech trendspotters Gerd Leonhard and Emma Gannon to help explore the issues looming on the horizon in its recent Business Rewired report.
“How a small business works now is dramatically different from the 1980s when the first personal computers arrived. But far greater change is on its way,” Xero’s UK managing director Gary Turner told AccountingWEB. “To stay relevant and move with the times, the accounting industry will need to keep on top of what’s ahead.”
Contrary to many predictions, accelerating change and automation don’t spell doom and gloom for small business. Some exciting opportunities are set to open up, according to the Xero report.
Artificial intelligence and automation
“AI and automation will continue to be adopted for basic or repetitive tasks. These technologies will give valuable head space and critical thinking time back to accountants and bookkeepers - allowing them to take on a more advisory role within a business,” said Turner.
Some of this automated activity will be carried out by digital assistants. Rather than just playing music or summoning up weather forecasts on demand, these bots will play a management role for small businesses by coming up with research materials for presentations, sharing meeting minutes and responding to routine emails.
Already, the report found that 51% of small business used digital assistants for setting work-related reminders, checking work calendars (49%), and sending messages (45%) – but these rates will increase rapidly in the next decade.
The wired workplace will also have a huge impact on staff issues such as recruitment and work-life balance, the authors predicted.
Find your purpose
One of the six big themes in the Business Rewired report is the need for businesses and their employees to find their purpose. Young people coming into the workforce don’t just want a regular pay cheque, they want meaning too, and to truly make a difference.
“Younger people now expect more from their employers. They want flexibility, the ability to work more than one job and a healthy work-life balance,” explained Turner.
The need for meaning extended to companies too; 62% of the small business owners surveyed recognised that their purpose was important to their customers and 43% said that they prioritised their business’s purpose over its profits.
Cash and profits
But profitability and cashflow will continue to be important factors. Following on from Xero’s efforts to improve cashflow over the past year, the Business Rewired report suggested that the growing “blended workforce” and increased use of digital money may finally make the late payments epidemic a thing of the past.
Gig workers offering their services to different organisations will need a new type of payroll that pays faster than the usual 30-day invoice terms. End-to-end digital transactions make this possibility more feasible and the survey found that 42% of small businesses thought the current slow payment model was outdated.
So what are accountants going to be doing with all the extra time that automation will deliver? The message is a familiar one, based around using their knowledge of the data underpinning business performance to play a more proactive, coaching role.
The trusted adviser
The phrase “trusted adviser” has become almost as much of a cliché as the “leisure society” idea that preceded it by a decade or two. But that doesn’t undermine its value, according to Xero’s Gary Turner.
“While we aren’t all driving around in driverless cars and we don’t all have robots pouring us tea in the office (yet), there have been many positive changes in the last 20 years. Email has transformed communication, cloud technology has revolutionised the speed at which businesses operate and has allowed businesses to operate at a global level,” he said.
Don't get left behind
“But things are about to get even more exciting. My advice to small businesses and their accountants would be to not get left behind. Keep up with new technologies or you may risk missing opportunities, becoming irrelevant and struggling to give your clients what they want.”
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