Article Summary:
The massive development of information technology has affected the accounting profession, has minimized the time required for traditional accounting jobs- bookkeeping, taxation and auditing- and it has created the need for the accounting profession's expansion in new broader scope business activities.
The massive development of information technology has affected the accounting profession, has minimized the time required for traditional accounting jobs- bookkeeping, taxation and auditing- and it has created the need for the accounting profession's expansion in new broader scope business activities. Traditional paper-based financial reporting is becoming increasingly less timely and thus less useful to decision-makers .Computers help accountants in both auditing and tax decision making, generate reports for those needing the information, and much of the preparatory work in financial-statement audits is eliminated by automated work papers, thereby 'freeing up' accountants for more advisory, finance and decision-making role
Conventional bookkeeping and tax preparation services are being increasingly automated and/or done by clients themselves, or being commoditized to the point where some bookkeeping and tax jobs are being outsourced. .
The broadening of accountancy profession is taking two forms, a broadening of the scope of the profession itself and of individual accountants. The role of accountants is continually expanding as they have redefined their activities from primarily information processors to strategic business advisors This involves the accountant moving from a number cruncher to a business and financial strategist and from a cost oriented scorekeeper to a market oriented business partner. Accountancy has surpassed its role as monetary supervisor to management of overall corporate guidelines and parameters. Today corporate governance issues are of utmost importance as it has been recently demonstrated by the accounting scandals of Enron, Satyam, Lehman Brothers etc.
Bottom line, the traditional accounting/CA firm business model classified below is in state of continues flux post the global economic shake up.
Bookkeeping Firms
- The bookkeeping firm acts as the accounting department for the small business owner. They provide everything from monthly write-up bookkeeping to tax compliance services. This keeps the business organized and financially responsible. . Today computers with the right accounting software do routine accounting work (bookkeeping) once performed manually by accountants and few entry level accounting positions will be needed as these responsibilities are taken over by computers and lower level other employees..
Outsourced Accounting Firms
- Outsourced accounting service firms act as a company's accounting department. They provide the accounting service, mostly online and in some cases the contractors that complete all of the accounting work either at their location or at the client's website. The accountant or accountants remain employees of the accounting firm in one country but complete the accounting for the client in another location.
Tax Firms
- Tax firms provide tax services only. These kinds of firms usually choose to specialize in one niche market. Tax firms can be sub-categorized into firms that offer individual tax services, business tax consulting, and high net-worth tax consulting. They give advice for mergers and acquisitions of international businesses and must be knowledgeable of the laws and tax practices of other countries. Accountants must also be aware of these issues as well as the customs and business environment of the countries in which their companies do business.
Audit Firms
- Audit firms all do primarily one thing: they audit company financial statements and issue opinions on those audits. However, audit firms could be broken down into sub-categories such as governmental audit, nonprofit audit, SEC audit and private equity audit firms. Audits are conducted in many different areas, including: financial, operational, information technology and compliance issues.
Full-Service Accounting Firms
- Full-service accounting firms provide a wide variety of services. Ernst & Young, Deloitte, PWC, KPMG, the Big-4 accounting firms, are largest U.S. accounting firms that provide multiple services with revenue of billion dollars. They provide tax, audit, risk management, business development and executive coaching service.
Large and medium-sized accounting firms have been particularly affected by the advent of information technology. These accounting firms have been impacted from two directions: the changing nature of information services required satisfying their clients; the changing nature of information access and management required to satisfy their knowledge workers. Within accounting public practice, there is mounting pressure for professional staff to be knowledge workers who can deliver customized services at high speeds, coupled with the ability to perform their job at any time or place.
To sum it all up, during the 2011s, the traditional accounting and finance professional role is going to evolve into niche-based specialists either providing a high level of advisory and guidance with active client involvement, or a high level of diagnosis and execution with active client involvement.
With change in accounting practices other firms and companies, both Web-based and brick-and-mortar alike, are beginning to offer unique niche-based accounting and finance services, and these are not CA firms doing this, but banks, consulting firms, and other non-CA/accounting based advisory firms, and they're doing this by using new financial and analytical software tools
It's clear that client's value time with partners, but they also place very high importance on efficiency and responsiveness and being able to access their own information. As firms look to improve profitability and meet clients' growing expectations for just-in-time information, technology-based self-service delivery touch points will become an even more important part of shaping the client experience. Today, your clients' service expectations are being driven in part by their consumer-based service experiences − whether it's what they can do on their iPhone®, or how they conduct business with their bank online. They expect you to be closely connected to them, and they want you to be available anywhere, anytime. Finding new ways to keep clients satisfied must be at the center of every firm's strategy, and one way to do this is to connect more successfully with clients by optimizing firms' top investments: both technology and people. Although many firms are reducing staff size by necessity, firms can also leverage technology to create new connections with clients, while staff focuses on high-value client work.
Tax firms that have already gone digital have certainly cut costs, but most will tell you that the real time savings comes from faster searching and retrieval of information, from single source compared with looking for tax information everywhere .
"The timely updates and one click tax research provides significant productivity gains and opportunities to boost client service at the same time," says Thomas Abraham, Managing Director at CCH India, one of the leading information and work flow tools provider of tax accounting and corporate law worldwide. "A lot of time savings in client service comes from looking for tax information related to some particular year or specific jurisdiction which can be done using tax search in fraction of seconds on CCH Tax Tracker by using world class search platform of Intelliconnect which is an extensive database of various tax laws, case, jurisdiction and news. Thomas says. "Rather than looking for vague tax information on direct tax in different books it can be researched accurately on Tracker without pain."
With the changing technological landscape, the future role of the accountant to stay competitive in the future has also changed.
1) Be information provider -One challenge the accounting field faces today is coming to grips with the incredible amount of financial detail their clients are both receiving and generating. The new frontier for accounting/tax related information services is filtering, assembling, prioritizing and then presenting the most vital data in a format that is readily usable by the management team."
2) Be online, be different - It is normal now for the buying process to begin online with a search engine. What makes your firm different from the firms listed ahead of you in search results or from the firms down the street? Do something to stand out when speaking with prospects, and prospects will spread the word. For the initial meeting, familiarize yourself with their industry beforehand, provide something more to take home than your marketing brochure (maybe a one page document with a few areas of focus and strengths), and follow-up with a handwritten thank you note.
3) Build an Online Presence - If prospective clients start their buying process online, it is important for your firm to at least be among search engine results. That is difficult, though, if your firm does not maintain a website. According to the 2010 AICPA MAP Survey, 33% of Certified Practicing Accountants in US firms still don't have an active site. To attract new clients, you have to meet prospects where they are—online.
4) Technology can help: - Business owners are busy running their business, so be conscious of their time and make things easy for them.Make file transmission less of a hassle by giving clients the ability to connect with you online through a client portal. Provide detailed information on your services through your website, so prospects and clients can easily find what they are looking for.
Ultimately, when evaluating how to move forward with technology in your firm, it is vital to understand your market, clients and the strengths that make your firm unique. Given how far technology in the accounting industry has come since the time of Luca di Borgo the Italian merchant who wrote first book of accounting in1477, it is no longer an option just to provide timely and accurate financial information. Exploit new technologies in your client interactions, and you'll find that your firm is better prepared to gain and retain valuable clients
Conventional bookkeeping and tax preparation services are being increasingly automated and/or done by clients themselves, or being commoditized to the point where some bookkeeping and tax jobs are being outsourced. .
The broadening of accountancy profession is taking two forms, a broadening of the scope of the profession itself and of individual accountants. The role of accountants is continually expanding as they have redefined their activities from primarily information processors to strategic business advisors This involves the accountant moving from a number cruncher to a business and financial strategist and from a cost oriented scorekeeper to a market oriented business partner. Accountancy has surpassed its role as monetary supervisor to management of overall corporate guidelines and parameters. Today corporate governance issues are of utmost importance as it has been recently demonstrated by the accounting scandals of Enron, Satyam, Lehman Brothers etc.
Bottom line, the traditional accounting/CA firm business model classified below is in state of continues flux post the global economic shake up.
Bookkeeping Firms
- The bookkeeping firm acts as the accounting department for the small business owner. They provide everything from monthly write-up bookkeeping to tax compliance services. This keeps the business organized and financially responsible. . Today computers with the right accounting software do routine accounting work (bookkeeping) once performed manually by accountants and few entry level accounting positions will be needed as these responsibilities are taken over by computers and lower level other employees..
Outsourced Accounting Firms
- Outsourced accounting service firms act as a company's accounting department. They provide the accounting service, mostly online and in some cases the contractors that complete all of the accounting work either at their location or at the client's website. The accountant or accountants remain employees of the accounting firm in one country but complete the accounting for the client in another location.
Tax Firms
- Tax firms provide tax services only. These kinds of firms usually choose to specialize in one niche market. Tax firms can be sub-categorized into firms that offer individual tax services, business tax consulting, and high net-worth tax consulting. They give advice for mergers and acquisitions of international businesses and must be knowledgeable of the laws and tax practices of other countries. Accountants must also be aware of these issues as well as the customs and business environment of the countries in which their companies do business.
Audit Firms
- Audit firms all do primarily one thing: they audit company financial statements and issue opinions on those audits. However, audit firms could be broken down into sub-categories such as governmental audit, nonprofit audit, SEC audit and private equity audit firms. Audits are conducted in many different areas, including: financial, operational, information technology and compliance issues.
Full-Service Accounting Firms
- Full-service accounting firms provide a wide variety of services. Ernst & Young, Deloitte, PWC, KPMG, the Big-4 accounting firms, are largest U.S. accounting firms that provide multiple services with revenue of billion dollars. They provide tax, audit, risk management, business development and executive coaching service.
Large and medium-sized accounting firms have been particularly affected by the advent of information technology. These accounting firms have been impacted from two directions: the changing nature of information services required satisfying their clients; the changing nature of information access and management required to satisfy their knowledge workers. Within accounting public practice, there is mounting pressure for professional staff to be knowledge workers who can deliver customized services at high speeds, coupled with the ability to perform their job at any time or place.
To sum it all up, during the 2011s, the traditional accounting and finance professional role is going to evolve into niche-based specialists either providing a high level of advisory and guidance with active client involvement, or a high level of diagnosis and execution with active client involvement.
With change in accounting practices other firms and companies, both Web-based and brick-and-mortar alike, are beginning to offer unique niche-based accounting and finance services, and these are not CA firms doing this, but banks, consulting firms, and other non-CA/accounting based advisory firms, and they're doing this by using new financial and analytical software tools
It's clear that client's value time with partners, but they also place very high importance on efficiency and responsiveness and being able to access their own information. As firms look to improve profitability and meet clients' growing expectations for just-in-time information, technology-based self-service delivery touch points will become an even more important part of shaping the client experience. Today, your clients' service expectations are being driven in part by their consumer-based service experiences − whether it's what they can do on their iPhone®, or how they conduct business with their bank online. They expect you to be closely connected to them, and they want you to be available anywhere, anytime. Finding new ways to keep clients satisfied must be at the center of every firm's strategy, and one way to do this is to connect more successfully with clients by optimizing firms' top investments: both technology and people. Although many firms are reducing staff size by necessity, firms can also leverage technology to create new connections with clients, while staff focuses on high-value client work.
Tax firms that have already gone digital have certainly cut costs, but most will tell you that the real time savings comes from faster searching and retrieval of information, from single source compared with looking for tax information everywhere .
"The timely updates and one click tax research provides significant productivity gains and opportunities to boost client service at the same time," says Thomas Abraham, Managing Director at CCH India, one of the leading information and work flow tools provider of tax accounting and corporate law worldwide. "A lot of time savings in client service comes from looking for tax information related to some particular year or specific jurisdiction which can be done using tax search in fraction of seconds on CCH Tax Tracker by using world class search platform of Intelliconnect which is an extensive database of various tax laws, case, jurisdiction and news. Thomas says. "Rather than looking for vague tax information on direct tax in different books it can be researched accurately on Tracker without pain."
With the changing technological landscape, the future role of the accountant to stay competitive in the future has also changed.
1) Be information provider -One challenge the accounting field faces today is coming to grips with the incredible amount of financial detail their clients are both receiving and generating. The new frontier for accounting/tax related information services is filtering, assembling, prioritizing and then presenting the most vital data in a format that is readily usable by the management team."
2) Be online, be different - It is normal now for the buying process to begin online with a search engine. What makes your firm different from the firms listed ahead of you in search results or from the firms down the street? Do something to stand out when speaking with prospects, and prospects will spread the word. For the initial meeting, familiarize yourself with their industry beforehand, provide something more to take home than your marketing brochure (maybe a one page document with a few areas of focus and strengths), and follow-up with a handwritten thank you note.
3) Build an Online Presence - If prospective clients start their buying process online, it is important for your firm to at least be among search engine results. That is difficult, though, if your firm does not maintain a website. According to the 2010 AICPA MAP Survey, 33% of Certified Practicing Accountants in US firms still don't have an active site. To attract new clients, you have to meet prospects where they are—online.
4) Technology can help: - Business owners are busy running their business, so be conscious of their time and make things easy for them.Make file transmission less of a hassle by giving clients the ability to connect with you online through a client portal. Provide detailed information on your services through your website, so prospects and clients can easily find what they are looking for.
Ultimately, when evaluating how to move forward with technology in your firm, it is vital to understand your market, clients and the strengths that make your firm unique. Given how far technology in the accounting industry has come since the time of Luca di Borgo the Italian merchant who wrote first book of accounting in1477, it is no longer an option just to provide timely and accurate financial information. Exploit new technologies in your client interactions, and you'll find that your firm is better prepared to gain and retain valuable clients
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