Innovation and Disruption: Challenging the Professional Accountant’s Value
It’s tough, being a professional accountant or bookkeeper for small businesses and it’s not getting any easier. Yes, there have always been challenges to the relationship, particularly with the perceived value of performing the work being fairly low yet the value of the work product being quite high. But professionals are facing new competition – competition in more areas and delivered in more ways – than ever before. This competition and the advantage it often represents is founded in the disruption of traditional IT created through cloud computing services, and the innovative use of technology, people and process to craft entirely new service models. Accounting professionals must recognize and leverage these elements to improve client service levels and differentiate offerings, or they risk losing revenue, business value, and relevance to their clients and markets.
Accounting and finance technology has, for many years, been necessarily focused on managing the ever-increasing volume of paper-based information. This paperwork provided the basis for financial transactions and had to be collected, translated and normalized, keyed into the system as data, and finally summarized for various reporting purposes. It makes sense that the simple fact of “document and paper handling logistics” have resulted in a variety of approaches and computerized tools designed to deal with all that paper. The “reality of paper” is firmly entrenched in business, and has been for so long that accounting solutions and financial systems have been developed to make working with supporting documents easier, yet continue to approach the use of those documents simply as support for data entered after-the-fact.
But there are new participants in the world of small business accounting and bookkeeping, and this entirely new generation of solutions does not carry with them the weight of years of paperwork and paper-based processes. Rather, this generation of online application solutions is developed with innovation in mind, and is seeking to develop a new approach to what are generally referred to as “best practices” for accounting for small business. Bear in mind that the term “best practices” describes something well-known and
There are two very important aspects of these “new generation” solutions and the services they provide, and which represent the challenge to the old rules of doing business. Based on early adoption and usage of many of these solutions, they will be successful. How they fit into the profile of today’s accounting or bookkeeping practice remains to be fully exposed.
1. Real-time information
It was always broke, and now we can fix it. When most of the business and accounting information was paper based, it meant that accounting and bookkeeping would always be performed after-the-fact. It takes time to gather the information, and even more time to organize it and turn it into useful digital data. The new approach is not to provide a better way to manage paper or to turn it into data more quickly. The disruptive and innovative approach introduced is the belief that information should originate as data and not as a document.
2. Consumer-oriented service
DIY is fundamental to many of today’s small business solutions and services. While the term Software as a Service describes how software and systems are being sold in the form of subscription services, the reality of many of these solutions is Service through Software, where the work product is the service rather than the software and systems (and people) performing it. Customers subscribe to a supporting business service, and it’s delivered through a software-based interface. The innovation delivered is the simplicity and affordability of getting the work done for the business owner, and the disruption is the further-diminished perceived value of the accounting or bookkeeping professional and the fundamental services they provide.
Accounting and bookkeeping service providers have difficult decisions to make regarding how they will address these very immediate challenges to the value of the services they provide. Professionals who learn to understand and appropriately select and apply this new generation of technology-supported services are likely to find that the competencies they develop – which represent differentiation – serve to make them as valuable to their own enterprises as those of their clients.
- Read more about how, for Accounting Professionals, It’s Good to be Sticky
- Read more about how There’s No Fear and Loathing in Accounting
- Read more about Data Warriors: Accountants in the Cloud
- Read more about using the cloud to extend “connectedness” beyond traditional boundaries