There are some major factors to consider when thinking about how the accounting industry will look in a decade’s time; many components are already forcing change, and this shift is showing no signs of stopping.
These days accounting industry has been evolving, along with globalisation, consolidation & commoditisation of the companies. These factors are affecting the constantly changing accounting industry.
Like in almost all the industries, technology is driving the evolution of accounting industry. Off lately, cloud accounting has enabled the business owners to take glance on their accounts on the go. In the coming years in fact, technology shall impact the industry in robust manner.
The development of technology and globalisation will mean affordable and powerful systems will be readily accessible to all. The power will be transferred to the users and the accountants that represent them, meaning platforms being used to keep books in check won’t require major capital investment, with users only having to pay for what they use.
The success of online accounting software such as Xero and Quickbooks Online means many traditional accounting services will become commoditised, and the pressure on the pricing for such services will be increased. There are already many firms offshoring transactional type work to countries where labour and associated resources are cheaper.
It is thought that this is just a step in the process as technology advances; while machine learning and artificial intelligence (AI) will encourage deeper transactional type services, adding further pressure on the way in which more traditional accounting services are delivered.
Machine learning and AI (Artificial Intelligence)
The opportunities machine learning and Artificial Intelligence could bring to the accounting industry are significant and will offer (and already are offering) real opportunities. Using these developments, practices will have an economic and efficient means of advising clients about present and future finances – with greater speed and confidence. The opportunities machine learning brings to the accounting industry has been enormous.
The development of technology over the next decade will not only lower the cost of transactional type processing, but will also lower the price of higher level type processing. This means that the bases of competition within accounting may change dramatically.
It is safe to say that, due to social media and rapidly developing tech, clients’ expectations for superior customer service within the accounting industry may increase. This will likely be the case in all fields and has already started to happen. Customers will expect greater productivity from their practices and will develop a requirement to want this on-demand.
As the pressure on price increases, it will become obvious that the industry consolidation will quicken. This has already been apparent in recent years, with larger, traditional practices now moving in to target the SME market.
In most of the developed world, SMEs already make up around 80 per cent of all businesses, as quoted by a major daily.
Technology in the next decade, shall reduce these processing costs, thus it is expected that mergers and acquisitions will increase, and some element of consolidation will occur in order to ensure economies of scale are achieved. This may then also lead to greater client churn if traditional practices do not have the technology, and therefore the competitive weapons, with which to compete against those that do.
India, being a technology provider geography to the world, seems to the best place to have talent pool coming from for the accounting practices in the transactional processing work. Offshoring in the current scenario should be the effective strategy for the accounting practices.
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