David Bergstein's Accounting Profession Predictions for 2017
My call outs for 2016 revolved around workflow and automation, which all came to fruition as accounting firms of all sizes clamored to get on the bandwagon of the automation of as many processes as possible to avoid data entry up front.
This was realized in the preparation of tax returns, as well as in the gathering of data to generate financial information. The scanning in of data, as well as the transferring of digital information from one source to another, increased. The key benefit to this will be the digital capture of information, rather than the scanning in from one source to the other. For example, last year I used Intuit® ProConnect™ Lacerte’s® direct input of data from my clients’ brokerage accounts, directly into Schedule D. This was a tremendous time savings for each return done. I am going to do the same this year, but will improve my workflow by switching to Intuit ProConnect Tax Online, which is driven by the Lacerte engine.
My predictions for 2017 revolve around structure and process at accounting firms and their affiliate organizations. As firms move from compliance to advisor shops and services, workflow and automation will continue at a more rapid rate. Accounting firms, as we know them, will be changing in how they are organized and how they charge for services.
We will see a rise in the number of firms opening up to perform bookkeeping and accounting services – back office processing or BPO – but not calling themselves CPA firms, even though, in most cases, it will be a CPA creating and running the operations.
An example would be an organization such as Growth Force, which isn't a CPA firm, but affiliated with one to provide the accounting services.
Another good example is Supporting Strategies. Once again, this is not a CPA firm, even though you can find many CPAs on staff. These are firms that see we are in a new world, and where data gathering and analysis that used to be very time consuming and costly to businesses can now be automated. This eliminates a need for a bookkeeper or accountant on staff because automation changes the game.
All accounting firms should welcome these new efficiencies and change their models to function more as a provider of advisory services, rather than compliance. This means that firms will no longer say that there is a staffing shortage because lower level tasks will be automated and senior staff can know how to perform their work more efficiently, using data analysis tools such as the following, just to name a few:
- Qvinci – financial consolidation, reporting and benchmarking tool.
- Fathom – dashboards and customizable performance monitoring tools for advisors.
- LivePlan - business planning, budgeting and forecasting tools.
A final example of firms restructuring to take advantage of this new technology is BDO (the 7th largest firm per IPA&AT ranking), with its “BDODrive” service offering.
BDODrive is a unique combination of professional and technological resources that provides excellence in core accounting and financial management, and an exceptional range of business advisory services. BDODrive streamlines everyday functions – reporting, payroll, time-tracking, accounts payable and accounts receivable – delivering mobile, real-time access to information, available anytime and accessible anywhere.” (Per BDO website).
Business Advisory Services is the key to an accounting firm’s growth, which will lead to firms adopting “Value Pricing” in the coming years. An example of value pricing can be seen in this screenshot of a firm's offering on the web, where the firm offers four different levels of service for clients to choose. The firm actually has more offerings, but I have selected this for an example:
Technology is changing how and where we work, and my predictions will be tested this year, as we see the following occur:
- More firms will adopt “Value Pricing”
- More firms will restructure and restaff to generate Client Account Services revenue via BPO, Back Office, VCFO and Vcontrollerships offerings
Remember that the average business is more successful when it works with an accountant, so take advantage of the opportunity to grow your practice by using technology and restructuring your practice to fit today’s client business needs.