Technology driving change in the accounting world and expanding the accountant’s role
Technological innovations in such areas as cloud computing and automation are helping accountants and bookkeepers find new efficiencies and new ways to provide value-added services to their clients. istock.com
Cloud accounting, automation, machine learning and artificial intelligence are among the innovations transforming the business of accounting and the roles of professional accountants and bookkeepers.
Technologies that automate the repetitive, time-consuming tasks that were a large part of “traditional” accounting make operations more efficient and data more accurate. This streamlining benefits accounting firms and their clients, as well as businesses who handle their own books and tax filings.
At the same time, technological change is allowing accounting professionals to offer their clients value-added services as never before and to expand into more strategic positions as business advisers and consultants.
“The traditional accounting role as it relates to business has been largely centred around compliance,” says Faye Pang, Canada country manager for Xero, a technology company providing cloud accounting software – used by businesses in Canada and globally.
“What are your tax obligations? How do you comply with government and regulatory requirements? The accountant’s job was mainly about following the rules.”
Cloud accounting and related technologies are opening up new opportunities for accounting professionals to be more like partners to their clients, to function, in effect, more like a virtual CFO, says Ms. Pang.
“In the virtual CFO role, you’re at the table when it comes to strategy. You’re thinking ahead and not only reporting on past numbers; you are also using your financial expertise to recommend how your client can be more competitive and prepare for the future.”
Technology transformation speeding up
Technological change in the accounting world has been occurring for some time. As with so many other sectors, the rate of change has increased because it has been necessary. Across society and the economy, Canadians are adapting to our shared “new reality.”
“The pandemic has done to accounting what it’s done to almost every other industry – accelerate the pace of technology adoption by a decade,” says Ms. Pang. “We’re seeing an uptick in adoption of cloud-based tools especially because so many people are working remotely, away from physical office spaces and meeting clients virtually rather than in-person.”
Moving financial data online and into the cloud means that accountants and their clients can individually or together (in virtual meetings) easily access up-to-date records of past performance and projections for the future. Along with remote access, the platform incorporates automation tools that eliminate the need for manual keying-in of entries.
“Like many professionals, accountants are asking, ‘How can I drive more efficiency into my practice?’ Xero provides tools and tactics that use machine learning and AI to increase that efficiency to free up hours in the day to do other activities: launch marketing to get more customers, develop valuable new advisory services or – an important priority during the pandemic – spend more time with their families,” says Ms. Pang.
While Xero’s clients in Canada are a mixture of firms of all sizes, the company is particularly focused on serving accounting and bookkeeping firms, and businesses directly.
At the same time, larger firms are also embracing the technology. MNP, one of Canada’s largest national accounting, tax and business consulting firms, recently launched “ease,” which uses Xero’s cloud accounting platform to provide “always-on” accounting and bookkeeping services.
“Accessing this information through the cloud enables MNP teams across offices to collaborate and drive client success,” says Shayne Dueck, partner and business advisor at MNP. “We are always asking how we can support business owners who are limited on time and resources and provide them with something that actually adds value back to their company. Xero quickly became a key enabler for us in helping clients with this goal.”
The company has teams and resources to help their customers migrate from the offline world to the new platform, says Ms. Pang, who says some customers report they have been able to migrate months’ worth of records in 20 minutes.
The platform includes more than 800 app integrations that support workflow automation and better financial decision-making. During the pandemic, when many businesses are struggling with cash flow because of full and partial lockdowns, one of the popular features has been “the short-term cash flow” tool. It enables businesses to project their bank balances 30 days ahead, showing the impact of existing bills and invoices if they’re paid on time.
Another popular feature is the “business snapshot,” which helps clients easily compare profit and loss, revenue, expenses and cash balances in different periods through a real-time, single report – instead of needing to generate additional reports or spreadsheets.
Strengthening relationships between businesses and their accountants and bookkeepers
Xero’s experience with their customers in Canada and globally shows that businesses are more likely to succeed in the longer term when they have strategic and deeper advisory relationships with their accountants and bookkeepers.
Because it recognizes the value of these relationships, Xero has a “Matchmaking Tool” to make it easier to link accounting practitioners to small businesses well suited to their services.
“We’ve now got this rich data around all the different partners that are in our shared accounting community,” Ms. Pang explains.
“So we can intelligently recommend to a small business looking for an adviser, the appropriate accountant that deals with similar businesses and understands the nuances of their industry.”
THE ACCOUNTANTS OF TOMORROW
A conversation with Gordon Beal, CPA, CA, M.Ed., CPA Canada Vice-President, Research, Guidance and Support
What trends in business and technology are creating shifts in accountants’ roles?
Clearly, technology is changing the future for many professionals, and accountants are no different. Artificial intelligence (AI) and data analytics, in particular, are sure to change financial reporting and many other accounting roles.
Another key trend we see today is the escalating importance of sustainability, social and environmental factors, and climate change on the ways many businesses are operating.
How can accountants contribute as businesses focus more on Environmental, Social and Governance (ESG) reporting?
Companies are confronted with novel challenges in a world of significant and rapid change: greater focus on corporate purpose, social issues such as diversity and equity, and a broad spectrum of environmental challenges. These trends provide exciting opportunities for accountants and the roles we play – to go far beyond foundational financial advice.
Accountants can step up to meet companies’ needs for enhanced analysis, provision of trust around information and data being used, a shift from historical to future focus, and greater judgment and ethical leadership.
What key competencies does CPA Canada envision for accountants in the emerging marketplace?
We expect that accountants will see a heightened focus on continuous learning, inquisitiveness and curiosity, with the need to keep informed and up to date. Issues of ethics and trust, along with equity, diversity and inclusion, will increasingly be at the core, in addition to critical thinking and strong communication skills.
How is CPA Canada supporting accounting professionals through education and professional development for these new jobs and roles?
CPA Canada launched a new data certificate last year, and we are currently expanding the curriculum with new partners. We are developing our offerings related to sustainability and also looking at helping our members practising in audit and assurance develop the skills to continue to expand their field of assurance services to non-financial information related to ESG reporting.
To facilitate the expanded realm of practice, we are developing a new competency map, taking a blank-sheet approach to creating a foundation for training new CPAs.
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