Software: Best Friend or Trojan Horse – Accountex Roundtable Insights – 5 key takeaways
On 1st May, ICB gathered tech giants at Accountex in London ExCeL to discuss whether software is a friend or a trojan horse.
Read the insights below, featuring ICB Co-Founder and President, Garry Carter, Damon Anderson (Director, Partner & Product of Xero), Caroline Plumb OBE (Founder & CEO of Fluidly), Jennifer Warawa (Executive Vice President - Partners, Accountants & Alliances at Sage), Kevin Lord (Practice Digital Enablement Manager at FreeAgent), Damien Greathead (Vice President - Business Development at Receipt Bank), Murray Willson (UK Sales Manager at SmartVault), and Chris Williams (Partner Manager at AutoEntry).
“The Accounting industry is going through a technological renaissance” – Damon Anderson, Xero
Our software experts agreed that the Accounting industry was going through a transitional phase whereby bookkeepers and accountants are seeing the change in the way they carry out their everyday jobs. Apps such as Receipt Bank, AutoEntry and HubDoc have been created to capture data and add it to the general ledger in a more efficient, quicker way. Xero’s Damon Anderson added to his previous comments saying “there has absolutely been transformation and automation of data and transactional flow of information going into an accounting system, but I think that to say that there isn’t a huge opportunity for bookkeepers and accountants is really missing the point. There is a huge opportunity in what you do with that data and how you can use that information to get better business outcomes. And with companies like Fluidly, there’s a lot of talk around advice that bookkeepers and accountants can provide to their customers. I think there’s also been a lot of opportunity, especially in the UK, for better compliance software.”
(L-R) Kevin Lord (FreeAgent), Damon Anderson (Xero)
“It’s not really human vs machine, for us, it’s about human + machine and how do you bring the two together to make something more powerful” – Caroline Plumb OBE, Fluidly
The main consensus around the table was that bookkeepers and accountants should not be fearing the development of new technology and apps, and instead should be finding ways to use it to enhance their services to their clients. Caroline Plumb, CEO of Fluidly, spoke about the importance of seeing machine learning and technology as an addition rather than a substitute.
“I think what consumers are particularly bad at doing, are seeing use cases that aren’t substitutes so we always think that we’ll get a better, faster, cheaper… but what we don’t see are the new capabilities, new additive areas and I think actually that’s where the power of a lot of this work comes in. It’s about what can we add to existing things, it’s not just about compliance, it’s about advisory, it’s new services, it’s additionality, not just substitution. And people get very concerned about “they’re going to take my job”, but actually if you looked at what’s happened, for example, in the travel industry when automation came in, in terms of the online travel agencies and bookings, actually travel agents who used to go on the computer and match up flights, now move into much higher value activities like planning whole holidays and tours and actually the value in that industry and the number of jobs remains pretty static.
“A Gartner stat which is really important to consider – AI is going to eliminate 1.8 million jobs, but it will create 2.3 million more. The key takeaway is they’re not the same job so it’s basically, there are jobs that are going to go away, but there are more jobs being created and it’s your ability to change into whatever that looks like ” – Jennifer Warawa, Sage
Jennifer Warawa (Sage)
Many bookkeepers and accountants are going through a shift in the way that they work. They are streamlining their processes and finding better ways to improve efficiencies in their practices. That said, as mentioned by Damien Greathead from Receipt Bank “Change is that constant – I think that is the most threatening because they’ve got to put food on the table and this is the way they’ve always put food on the table and now we have to look at ways in which I can adapt my skills so as to remain relevant and I think that’s the biggest challenge as to whether you’re a bookkeeper or an accountant, burger flipper, or whoever you are – I think that’s the challenge and it’s happening in every industry.” “And it’s not unique to the bookkeeping profession or the accounting profession. The education system is not able to keep up – as one element of that. It’s not able to keep up the pace of change that technology is bringing. And that’s why a big question for us, you know the software developers who are driving and bringing this technology to us – is what role can we play that can, you know, helping in driving that education agenda. How do we surface up through the process of getting people into the profession?” added Damian Anderson, Xero.
“We will all be affected by open banking and the reading of bank transactions and traditional lending methods.” – Kevin Lord, FreeAgent
There have been some predictions that banks will soon start to have preferred suppliers to assist you with your businesses, although Garry Carter, queried whether a historical record of being bad payer may affect your chances of securing funding or lending in the future. Kevin talked about his previous experiences working as a bank lender for RBS; “I used to assess lending, I would say go to your bookkeeper or go to your accountant, get me 2 years’ worth of financial accounts. That’s historic information, I was basing a lending decision on something that happened 2 years ago. That’s dangerous for the bank, very dangerous for the business, the business could already be in a tricky situation, so what’s happening now, and we are certainly starting to go into that market which is- yeah you’ve sent me this invoice, this person is a bad payer, do you want invoice financing on that invoice that you’re sending? We strongly believe that the bank data and the client data are all there and you can make better lending decisions and credit decisions based on that.
“We don’t necessarily have to put round pegs in square holes and put bookkeepers and accountants into this advisory role.” – Damien Greathead, Receipt Bank
Though the main message to bookkeepers and accountants during this new wave of technology, is to shift your services to advisory-based services, it is not the be-all and end-all. Damien suggested that perhaps if compliance was your strength, focus on that element of the service and increase your client base. Some bookkeepers like compliance and actually if that’s the case, they should just do more compliance. So actually the 10-20 clients you could handle before, double it, triple it, and grow that aspect of your business. I think we are trying to push accountants and bookkeepers down to this advisory role and help clients to understand their business but actually some of them like compliance, just do a lot more of it and that’s the business that they should focus on. Move away from the manual, putting information into boxes, because the machines can do that, just do more of it or choose.
These sentiments were echoed by Chris Williams of AutoEntry who talked about some members he met at the Inspire Tour; “The bookkeepers that I met on the Inspire Tour are saying manual data entry is painful and a lot of them want to do the advisory role and help, encourage and specialize in the businesses. There was one lady I met who specialized in pubs – she knew everything inside and outside, but she said she didn’t have the time to get out and help those guys. So, if the bookkeepers and the accountants have the time, they can reach out to the clients and help them in their industries. Jennifer Warawa of Sage also highly recommended specialising in an industry “ You do need to decide; do I become a volume player and do more of this at a greater scale? Or do I specialize because there is such an opportunity for people who want to specialize, to go after a vertical – If you can figure out how AI affects this industry, the world is your oyster. There is just so much opportunity, but you can’t be all things to all people anymore, because you can’t keep up with all the technology.
Chris Williams (AutoEntry)