The bottom line of accounting revolution

Published on
October 21, 2021

During the recent Accounting Software Roadshow merry-go-round, I asked myself in a state of exhaustion ‘what is this all for?’ I had momentarily lost sight of the fact that the advancement in technology is ultimately for the benefit of the most important aspect of our businesses – our clients.

Since Xero came along to Australia in 2008 and forced a revolution in the Australian Accounting space, My Accounts along with thousands of accounting professionals have had to learn, adapt and improve our service offerings in order to keep up with what was now available to both us and the clients. At times it has felt like we’ve been on a Hamster-wheel of never-ending changes, improvements and expansions in accounting software that we need to be aware of at least, and be a master of at best.

So with my focus on clients back in check, I reached out to three accounting industry leaders to get their insight on why the recent accounting revolution is important to small business and how it benefits them.

Right at forefront of the revolution delivering news on all the changes across all the platforms is Sholto Macpherson. Without his updates, our job as accountants to keep up would be much more difficult. He had this to say:

“Business owners can look forward to expecting a lot more from their accountants. Accountants often have a negative association because they are associated with paying money for compliance. In the case of the ATO it can be quite a large sum of money, but so can the fees. In both cases it feels worse because the fees and tax paid are variable. So the business owner knows they are going to pay money each time they talk to the accountant but they never know how much. 

And there’s the problem that they never know how well the accountant is doing their job. They just see the number of hours but have no way of knowing whether that reflects a job well done. Should it take that long to do a tax return? Are they just slow and inefficient? Or could they have reduced the tax further if they had spent more time on it? 

This new wave of accounting technology is supporting a better relationship between accountants and business owners. The fees are fixed so the business owner knows exactly what it will cost. And they pay monthly, so there’s no anxiety over paying several grand in one whack. The biggest opportunity to improve the relationship is for the accountant to set KPIs and review them regularly. This is exciting for a business owner because it’s the kind of advice that helps them make decisions about how to improve their business. There are an infinite number of things you can do to increase your revenue or profits, the hard part is committing to one idea and being confident you can tell whether that idea worked or not. To have someone beside you working that out is a huge relief. It makes running a business a little less lonely and hopefully a lot more successful!”

A company revolution within an industry revolution – Reckon have been extremely busy with the release of cloud-based ReckonOne hitting the market at an impressive starting price of $5 per month. One of the driving forces behind this success that has led to a market-leading ~30% share price increase (Jan ’15-Jan’16) is Daniel Rabie who shared the following practical insight for small business:

There are over 2 million small businesses in Australia and they are a major source of employment (~45%) and contributor to GDP (~35%). Innovation in accounting software is necessary as it helps SMEs add value to their business, which in turn leads to higher employment growth and economic value. Take a practical example for a tradie – the innovative dashboard for ReckonOne gives you a real-time view of cash flow. Having a transparent view of the business means when it’s midyear and business has picked up, a tradie can easily determine whether to buy another work vehicle and put someone on to service additional demand. This innovation could give the tradie a commercial advantage over competitors and help him identify opportunities to grow his business.”

Posting a growth of 81% in subscription revenue in FY2015, Xero continues to lead the cloud accounting space. Managing this explosion of subscriptions across the ACT & NSW is Rob Stone who acts as a conduit between Australian small business, their advisors and Xero. He issued this statement:

“It matters to Australian small business that accounting standards and accounting software move with the times. 

Businesses always face uncertainty when making decisions. They need consistent, accurate and reliable financial information. And that only happens if accounting standards reflect what’s happening in the economy.

Innovative accounting tools help businesses thrive. They benefit – saving time and gaining new insights – when their accounting software becomes simpler yet smarter and more powerful.”

I felt a huge amount of relief after speaking with Sholto, Daniel and Rob about the positive impact of this accounting revolution. Any innovation that drives our industry forward, creating better accountants and better relationships between clients and advisors is alright by me. Sometimes the bottom line isn’t just a red or black number on a page, but also people – our clients. The bottom line is that all of this is for them, and I’m ok with that. Bring on the next roadshow!

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