The time for tax disruption has come
Accountants have seen technology change what they do – computers, emails and software have relegated paper forms and calculators to the distant past. Yet, tax service providers haven’t always had the technology solutions to meet the needs of practitioners, making radical technology adoption a distant goal for many. Today, these problems no longer exist!
You’ve probably moved from web-based accounting software to cloud-based tools. Today, AI and machine learning are reinventing accounting. On the other side of automation, however, is disruption, and taxation is ripe for this kind of change. Here’s why:
- More users motivate developers. Thanks to the coronavirus pandemic, everyone is pretty much used to remote working and digital solutions. There are finally enough users of digital tools for software publishers to have an incentive to develop new software. Also, a lot of accountants don’t really want to do 1040s anymore. It’s very difficult to help this taxpayer who only pays once a year at a reasonable rate because it takes a lot of time. It was never like this. But this translates into a gap in the market where individuals will seek technology to provide the services their CPA used to provide if accountants don’t know how to be more efficient.
- Technology can keep pace with taxation. It used to be that there wasn’t enough time to go beyond innovation because keeping up to date with the tax code was too much work. AI and ML have changed that, and it’s no longer a problem. Tax software can be rewritten in a new language that can be updated faster, which is pretty cool. It is also possible to create human-centric software that is not scary or confusing to interact with, which will increase adoption rates.
- Investors are ready to invest. The profession has the interest of private equity and venture capitalists who have discovered that taxation can be a profitable business. Automation hasn’t happened in years, and when there’s money, there’s movement. There’s so much outside money coming into the accounting space, both from companies and suppliers to the industry, that it really makes a difference. Think about it. Investors put money where they think they will get a profitable exit, and they see a tax opportunity.
These three reasons are what will really make things happen, and accountants need to be aware of what is happening.
The impact of time
Consider also time. It’s a limited resource and the one thing you can’t get enough of. Now that the high season lasts practically the whole year, you no longer have time to reset yourself to understand things and change for next year. It’s no longer a sprint; it’s a marathon. So what do you need to fuel up and reach the finish line? Automating.
Technology will not replace accountants. It’s not going to take your job or your team’s jobs. But that doesn’t mean you can sit idle and let those existing jobs become useless. Accountants, it’s time to up your game.
It’s now possible to transition from time-consuming basic services like 1040s to technical service and free up your time for light consulting work and intense customer interactions. That’s more than the 1040s. It’s all compliance that takes too long. Even on the business side, there are countless different state and local tax laws to contend with. When the cost of labor is just too high to hire people to perform very specific tasks, the solution has to be technology.
If you have a large backlog right now, you know things can’t stay the same. You need to automate and do something different. This is the disruptive space accountants find themselves in right now.
Change the way you think about resources
Shifting to a disruptive, technology-driven mindset is a big shift in how you think about resource allocation. How about that? Instead of looking at how much a product costs, consider how much it will save you. If the goal is compliance, then you need the resources. Start changing your mindset by asking yourself, “If we don’t fill out these forms, what’s it going to do for us as a business?” If you change the conversation to the revenue side of the business, there will be more money in the pot.
How do you get to this other conversation? Start with better product and project management. And better training for the next generation that is not based on an end result but rather on technical skills. Change happens if you manage results, not time. And that’s why pricing is so critical. You have to look at the result, not just the time it took to do it. More importantly, you need to ask if the customer is satisfied.
This leads to changing your entire business model. This seems like a big and scary thing to talk about. So think about technology and disruptions like this instead – never stop learning. That’s how you have to live. That’s how we adapt.
It also means you can never stop learning the other stuff That is. This includes the human side of business, emotional intelligence, management and leadership skills and how to communicate. There are many more elements to being an effective professional today that you need to be aware of.
Accountants now live and work in a world that is changing and evolving at a record pace. To stay relevant, you must learn, grow and adapt. To thrive, there must be disruption. The accounting industry is ready. Are you?