Based on the conversations I’ve had with tax accountants over the past few months, along with trends I’ve heard about at a number of events, there is a lot going on in the world of tax and accounting technology.
Today, the buzz is all robotic process automation and artificial intelligence. The world of accounting is changing from an historic view of a business through financial statements that look back at results, to a front-loaded dashboard with real-time results and information. The dashboard for QuickBooks® Online is a good example.
Then, there’s revenue recognition. While software as a service has changed how revenue is reported and how financial statements are audited, the bottom line is that business owners are looking for answers on how to improve profitability, liquidity and cash flow. This all translates back to how we can capture the data for transactions quicker and push them through the accounting system to get out information that will allow us to make the right decisions on what to do next.
Indeed, compliance work is becoming a commodity, and advisory services are where the real value is. CPA firms are becoming professional services firms and competing heavily with non-CPA firms in all areas, except in auditing, which will change from being done at a point in time to being done continuously. In fact, the AICPA is laying the groundwork for the future of audit by building a foundation for how it should be done via OnPoint PCR, which AICPA says can work hand in hand with the prescribed standards the association promulgates.
Another hot topic in accounting is independence, especially when it comes to audits and on whose server the software resides. When tools are hosted on the web by third parties such as Amazon and IBM, accountants have less of an issue with independence since they are not controlling the data. However, the rules still apply; the person who makes the decisions concerning how entries are made, and who they are made by, will still create questions.
It’s interesting to note that the same hot topics in accounting relate to taxes. I know most tax preparers spent a great deal of time this past tax season educating their clients on tax reform, especially the qualified business income (QBI) deduction. We also see CPAs and accountants advising their clients on the impact of the Wayfair decision on internet sales and purchases. SALT, or state and local taxes, is the area of concern based on the changes to the IRC relating to the limits on deductibility.
All of this leads to turning from compliance to planning when it comes to where our clients should live and work, and comes back to automation, data analysis and technology usage in how to provide meaningful information. Software programs, such as Intuit® ProConnect™ Tax Online, Lacerte® and ProSeries®, produce reports that allow us to sit down with our clients and make planning suggestions based on the returns we produced.
As accounting standards and tax rules change, hot topics also change, but the constant will always be the output of accounting reports and tax liabilities. Accountants must always find ways to help their clients become more liquid, solvent and profitable, along with reducing their tax burden whenever possible. Technology usage is involved in all of these areas. We must continually produce results more quickly and interpret the facts to advise our clients.