“Nothing in this world is certain – except death and taxes” – Benjamin Franklin once quoted. And since taxes are already dealt with elsewhere on these pages, we turn our attention to the most probable cause of the accountant’s imminent death as a result of digital transformation – which started already some time ago, but whose effects have possibly been underestimated by the fiduciary and financial service industries.
Digitalisation seems to be the topic of the day in all its possible facets everywhere we go – it is almost fashionable to engage with the term in some form or other – using it, talking about it, discussing it at your local restaurant table, or in this case, writing an article about it.
Of course, opinions on the subject vary widely with regard to the actual meaning of the term and what it entails and what impact digital transformation will have on accountancy firms, their employees and related services rendered.
We recently spoke to a colleague of ours – a start-up entrepreneur himself – who offers similar services to clients. It resulted in an animated discussion about what the future of accounting and fiduciary advice could look like. And in this context, he asked an important as well as justified question: what benefits and added values have we generated for our clients up to now and what will these look like in the future?
Until now, a provider of fiduciary services would rely on offering the required infrastructure such as software on one hand and the professional qualities of its employees on the other. Relatively high costs for existing accounting tools was often reason enough for many entrepreneurs to outsource their finance and accounting services to a fiduciary company.
But the number of providers developing modern accounting software has increased significantly in recent years. These applications simplify bookkeeping enourmously and thus enable people without a particular expertise to manage their own financial and accounting systems. And this already harsh and sometimes unwelcome”competition” will definitely continue to grow. Traditional bookkeeping, which was largely executed manually only half a century ago, experienced a first major reorientation 30 years ago with the arrival of the PC – now new automation processes will bring further change in the future.
A disruptive breakthrough in accounting as well as in controlling is therefore only a question of probably a very short time. After all, digitalisation has already led to significant upheavals in other areas and will continue to do so here. The use of artificial intelligence will significantly change familiar working methods and operating systems.
So, what will this new world look like and what does this mean for our accountant?
To put it provocatively: the profession as we know it, will simply cease to exist. Even with current technological possibilities, considerable degrees of automation can already be attained today. Certain applications offer new approaches here and facilitate work processes. But the really big breakthrough is yet to come.
However, digitalisation does not necessarily mean that entire professions will disappear completely. There are still taxi drivers today despite the existence of Uber and hotels despite AirBnB.
But the transformation will come and processing will eventually give way to consulting. It cannot be denied that the complexity in many areas, such as billing or fiscal law, has increased. And unfortunately, or fortunately for our business, despite digitalisation, it doesn’t look like this is about to change.
The demands in the fiduciary industry will be to recognise opportunities and possibilities in good time in view of the impending changes and to find new creative ideas and approaches to solutions. For death will befall those who stand still.
June 11, 2020
