There is a traditional image of an accountant. It’s usually a serious person in a grey outfit, sitting behind a neat and tidy desk stacked high with papers, gently punching numbers into an old-fashioned calculator. They then set about making neat additions in an antique fountain pen in a thick ledger.
The traditional idea of the accountant is of someone who deals with numbers. Any time-consuming and complicated money matters were simply passed on to the accountant who would painstakingly and diligently tot them all up and come up with the relevant business figures at the end of every financial year.
However, over the last ten years or so, all that has changed. New online tools have allowed people to do their own real time accounting. Using a variety of easy to use platforms such as QuickBooks, Xero and FreshBooks has put the power in the hands of the small business owner. With these tools you can issue invoices, update and track business accounts and log all expenses throughout the year.
So, there’s no mad rush at the end of the year to tot up all the receipts stuffed into a shoebox or make desperate calls to the accountant to take care of the books. All of which begs the question: just what do modern accountants do, and do you really need one for your business?
The simple answer to the second part of that question is that, yes, you very much do still need an accountant. Even though these modern accounting tools have taken the sting out of keeping track of invoices and expenses, looking after the finances, taxes, payroll and other financial aspects of any business requires expert knowledge.
In fact, there is an argument that states that the recent technological revolution has made accountants more important to small businesses than ever before. Yes, their role may have changed and they are no longer the human calculators and data entry drones they used to be, but there is a whole new set of challenges they need to face.
Technology is changing the face of accounting
The changes that are being brought by this technological advance are also causing massive societal shifts, and it is the accountants who are at the frontline of learning how to deal with these. For example, Blockchain is the technology that is powering the cryptocurrency revolution, with things like Bitcoin having the potential to change the way money is used and moved around the world.
As well as this, the automation of data, artificial intelligence and data analytics are having massive impacts across the board. In fact, these new factors have posed the biggest existential threat to accounting in decades. Even things like cloud computing and social media are changing the roles of accountants around the world, and the existence of thousands of small businesses around the UK is dependent on accountants getting to grips with these technological shifts and applying their expertise to them.
David Vaudt, chairman of the Governmental Accounting Standards Board, said: ‘The relevancy of the accounting profession in the next decade will be largely impacted by how capable we are at visualizing and harnessing the potential benefits of new technology, and how willing we are to make the changes necessary to take advantage of the enhanced technology of tomorrow.’
These tectonic shifts in technology will be most keenly felt at the level of small business. Large corporations with huge IT departments and large accounting firms at their disposal are not just able to cope but are even driving the changes. But for smaller businesses with limited resources, keeping up with the rate of change can be almost impossible. That’s why the role of accountants is still so important.
So, it seems that as well as providing solutions to age-old business accounting problems such as tracking invoices, tax and expenses, the new technology has created problems too.
The role of the modern accountant
It’s clear that modern accountants are not the drab number crunchers they were once perceived to be. Yes, they still receive training in all these aspects of accounting, and this does still form a part of their role in the modern business environment. But in general, the role of the modern accountant is more like an expert advisor. They are skilled and knowledgeable in all areas of business and can offer guidance and stewardship through these sometimes choppy waters.
While you focus on running your business, your accountant will have one eye on the bigger picture. They will also be able to guide you through the use of the modern technology and provide access to services that can help your business to run smoothly. Fully integrated accountancy software is only of real benefit if you are using it to its capacity, and that means having an in-depth understanding of how it works and what areas of the business can utilise its power.
Modern accountants specialise in matters such as expenses and VAT, and will be your conduit in dealing with HMRC, which is a process that is undergoing some significant changes at the current time, with Making Tax Digital changing the way you log and pay your taxes.
It’s a familiar story across the business world. New technology emerges and threatens to overhaul the way that everything works but it is also limited by both human understanding and application. You still need the expertise and knowledge to be able to apply these new tools to your business.
In this way, the role of the accountant has changed from that of a practical position to a more advisory capacity. You could even say that they have become more important figures in any business, becoming even more indispensable. To find out more about the role of the modern accountant, get in touch with a member of the Together Accounting team. We’re always happy to talk and look forward to hearing from you.