Since the dawn of the accounting profession circa 300 BC (we think!) when the words "just put it in sundry expenses" were first uttered from the mouth of the first accountant, the role that accountants played has grown over the centuries as financial systems and tax regimes became more complex.
Guttenberg invented the printing press, Edison came up with the light bulb, and so, the common setting of the modern accountant's office was created - hunching over a binder of invoices, to the cold light of a fluorescent lamp. Accountants were pretty much safe and cozy in their comfort zones. The profession changes over the years, but there was never any question as to the core function of accountants. Until now, that is.
Tech and automation, remote work, and DIY accounting - all deeply disrupted the profession. Accountants are looking to restructure the nature of their profession for the future to come. We know they have an important role to play - but what will it look like?
Here's a short, useful guide on how you can future-proof your practice:
Prepare for Bitcoin and other cryptocurrencies as a B2B/B2C payment method
Bitcoin was up. And down. And up again. It's very much alive and kicking. Even if Bitcoin were to disappear off the face of the earth, the revolution of cryptocurrency is here to stay.
Businesses are paying and accepting payments in cryptocurrency. Some companies are even paying their employees with crypto. An estimate from late 2020 indicated that around 2,300 businesses accept Bitcoin, and a more recent study says a third of small business owners accept cryptocurrency as payment. Visa, Mastercard, PayPal, and Stripe, have all announced plans to enable crypto payment processing.
So, cryptocurrency accounting is a big thing, and all indications are that it'll get even bigger. Even if you haven't encountered crypto transactions so far, the odds are it's only a matter of time until you will. The AICPA is already in the process of preparing CPAs for blockchain integration into accounting and is offering training and certification for accounting professionals.
The AICPA offers many training resources on accounting for Bitcoin and other cryptocurrencies, some even qualify for CPE credits. Here's a selected list of resources:
- Accounting for Bitcoin and other cryptocurrencies
- Virtual currency tax guidance and resources
- Cryptocurrency: What you need to know to properly advise clients (Webcast)
- Understanding, Using, and Securing Crypto and Digital Assets
- IRS crypto guidance every tax practitioner should know
Tap into emerging business industries and niches
Over the last few years, many industries have emerged or gained tremendous momentum from online event management to in-home beauty services. Each of these has its own distinctive financial and commercial characteristics, demanding a distinct accounting approach.
Small businesses in new niches and industries are thirsty for financial guidance. Some of them are led by novice business owners, the industry is new, and many of the financial challenges they meet are new to them. This is just the place for an agile accountant to leap in to fill the void.
Niche accounting is already a great way to grow your practice. This will only become truer in the future.
Stay ahead of the tech curve
Accounting is probably one of the most affected professions by the advancement of technology, with a constant heated debate around the question of whether AI will take over the role of accountants.
The AI accounting market is projected to grow at a Compound Annual Growth Rate (CAGR) of 48.4% from USD 666 million in 2019 to USD 4,791 million by 2024.
As with lawyers and medical professionals, the advancement of tech and AI isn't an obstacle but rather an opportunity to evolve by using cutting-edge tools to become leaner, more effective, and give your clients the best service possible.
With cloud accounting, accountants and clients can manage data online from anywhere, streamline work processes and get live financial reports instantly. To learn more on how to make the most out of cloud accounting, read this article.
Accounting software integrated with online AP/AR services enables accountants and clients to set up approval workflows, increase visibility and efficiency and reduce transaction costs. AI-powered services can automatically scan and upload invoices in a fraction of the time it used to take, and manual reconciliation is also in the process of turning into a relic.
So if machines end up doing most of the accountant's busywork, where's the opportunity in that?
Becoming the mentor your clients need
The difference between a good accountant and a great one isn't in the technical side of their work. With tech doing the heavy lifting, there's a focus shift into an advisory role.
And small business clients need it more than ever. In a recent survey, business owners were asked what they expect their accountant to help them with most. The majority of the services they mentioned were advisory: Tax planning (57%) and "understanding changes in tax law" (56%); financial planning (32%); managing cash flow (27%); and business planning (25%).
It's clear that accountants are evolving from the dated idea that they’re just number-crunchers to being guides, advisors, and mentors. And this is where accountants can make a significant impact on their clients' lives. They can advise them, help them grow, and turn them away from pitfalls, towards the golden coasts of success.
What does it take? It all starts with a change in mindset. Start by:
- Being proactive in your advice. Take the lead, ask questions, identify blockers, potential growth catalysts, and offer practical actions.
- Prioritizing open and steady communication with your clients. Encourage them to ask tough questions and challenge you and create dedicated communication channels. For example, you can set up open 1-on-1 sessions for each of your clients, or create a dedicated inbox for general questions your clients can send you.
- Following up on open and recurring issues. Map out ongoing concerns that your clients are experiencing, and make it a point to not let them slip through the cracks. If your client is experiencing cash flow issues every summer, it may be something that can be avoided by proper financial planning.
- Reevaluating financial strategy periodically. Markets are changing, businesses are growing, and technology is evolving. A financial strategy is a living, breathing thing that needs to adapt to what’s happening at the moment. That’s why it’s important to go back and ensure that the assumptions and conclusions that your clients’ financial strategy are based on are still valid.
- Participating in online social communities. Not only of your peers, but also for business owners, where you can offer advice and learn more about the day-to-day concerns and needs of prospective clients.
It may sound like a contradiction to say that the future of accounting will focus on humans more than ever before. But it’s true. AI and tech can do amazing things with data and algorithms and programming we’ll never understand.
But this will actually give accountants more bandwidth to help their clients with their goals, needs, and concerns, helping them turn their businesses into financial successes. The accountants who adapt their mindset to this will thrive in this brave new world.
*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.