How to create shortcuts in your accounting practice using technology

Content Summary

Mark Phillips | February 2020
This article was current at the time of publication.

Some practitioners – especially those with minimal interest in technology – argue that keeping up with IT developments is difficult to justify.

It primarily comes down to time, says Alan Giffard CPA, who with his brother David Giffard FCPA is co-principal of G2 Accounting (formerly DSG). 

“They’re already busy and find it hard to invest time to fix an issue or improve a process,” Giffard says. “It also has to be done as part of an overall refocus of the business. We’ve been billing clients on a fixed fee model for 10 years, meaning we have a huge incentive to improve efficiency through any means possible. 

“If, however, you bill by the hour and can then efficiently do a client’s job in half the time, you’re effectively going to be paid half of what you used to be.” 
Harry Hoang CPA, principal of Canberra-based Tailored Accounts, believes the cost of IT in Australia is very high.

“It’s a seasonal business, and it is difficult to take a couple of months to conduct research and development with new technology, another few months to implement it into the system or, for many organisations, even years,” Hoang says.

According to a comprehensive 2019 report from CPA Australia, MY FIRM. MY FUTURE., more than 45 per cent of respondents nominated new technology and digital disruption among their top-three business challenges, slightly ahead of regulatory change.

The report also identified the top-five ways technology adds value for public practices:

  1. Improved efficiency (72.6 per cent)
  2. Reduced time spent on administration and compliance (57 per cent)
  3. Improved service quality (51.8 per cent) 
  4. Better client engagement and communication (51.1 per cent) 
  5. Increased competitiveness (47.8 per cent).

CPA Australia plans to release practical guides to implement the report’s findings later this year.

Exit planning

In Giffard’s view, failure to properly invest in technology will reduce the value of a practice and make it harder to find buyers.

“For many accountants still stuck in desktop accounting software, there is a need for significant change management,” Hoang says. “If you’re not investing or making enough resources available to transition to new technologies, no one is going to want a buy a practice that has nothing relevant to offer for the future.”

Client engagement

Of course, technology is not a cure-all.

“New clients are still looking for trust and personal rapport,” Giffard says. “However, client retention is far easier with better technology, and you cannot afford to look like you’re behind the times, or they’ll naturally assume your knowledge is outdated, too.”

Hoang agrees: “Even smaller clients know there are a lot of efficiency tools available that extend beyond just data entry. Compliance is a top priority for most – be it tax-related or whatever – and technology can make that less demanding.”

Improved efficiencies

Cloud technology has allowed G2 Accounting to complete core compliance work (such as populating forms) significantly faster than five years ago, which, the principals say, “has, in turn, enabled us the time to more effectively advise clients”.

In 2012, Hoang decided to ditch his firm’s server box and moved 100 per cent to the cloud.

“Initially, we adopted a system like Dropbox, then invested in other technologies and we have never looked back,” he says. “It enabled staff to work from home rather than a physical office, which in turn has allowed me to take holidays while also doing a bit of work. We no longer want anything on a desktop. Everything is streamlined – we don’t have to deal with different data formats because everything is in the cloud and we don’t have hard copy.”

Likewise, at G2, the flexibility the cloud has made it far easier for staff to take maternity leave and time off to look after their children, without putting careers on hold. Even so, everyone in the firm must have the right attitude with regard to new software and technology.

Competitive advantage

Despite the so-called “gig economy”, in a smaller centre such as Canberra it can still be challenging to find the right person with the right expertise for online projects.

“[Many people] have always worked with Excel and will never want to work in an online environment,” Hoang says.

“It all comes down to whether we are ready to change, learn new things and to no longer be scared of technology. In Australia, there are still people who don’t know how to deal with their old computers – let alone the cloud or the next level.”

With an abundance of cheap overseas labour, technology is one of the few advantages many Australia-based practitioners retain.

“Technology is really the key,” Hoang says. “There is nothing else we can really do to compete. We need to put more money, resources and effort into investing in future technology. We also have to invent things, create things and make things so that we can be proactive rather than reactive.”

Resources for understanding technology in your business