Technology advancements present many opportunities for accounting, but those who don’t embrace them will put their businesses and clients at risk. Tax tech expert Richard Puffe explains why your tax practice has to evolve with new technology.
“What do names such as Lotus 123 and Atari have in common?” Thomson Reuters Senior Product Manager Richard Puffe asks.
“In their time they were their industry’s premium brand — there were no peers or competitors who could dethrone them. But where are they today? What has changed?
“Technology has moved on and, with it, customer expectations. We are now in an era where customers expect things to be easy and shareable, with access any time and anywhere.”
Tax and accounting practices are just as susceptible to this change – customer expectations transcend industry, so clients expect the same ease of service as they experience with their favourite brands. Those who refuse to adapt to evolving technology risk becoming irrelevant in what is an increasingly competitive market.
“While the vast majority of accountants are using some elements of cloud software in tax preparation, there is still only about a quarter who use a full cloud-based solution. Those who don’t adapt now will be left behind,” he says.
Collaboration and real-time data
Moving to the cloud allows the creation of a streamlined workflow, which results in increased efficiency, productivity and profitability.
“The beauty is your information is being stored offsite, so your whole team has access from any authorised device or browser, anytime, anywhere they can get online,” Puffe says.
Businesses can also give access to their clients so they can view their own data and collaborate wherever they are. And all of which can be done in real time, which is what customers expect, whether they are ordering a pizza or finalising their tax returns.
Real-time access to data and increased collaboration between accountant and client gives you a competitive edge over the rest of the market.
“That distinction will set you apart and win you new customers,” Puffe says.
Tax professionals will also have peace of mind that the data is current and accurate, and advice is based on the correct information every time.
“Having a single database environment that can be shared between clients, tax, corporate secretarial, ledger, billing and invoicing is key,” he says.
With this improved data sharing, it’s important to ensure that software is compatible with major sharing platforms such as Google Drive and Dropbox.
Cost savings in the cloud
“Having a central source of data carries the advantage of not having to manually re-enter information such as invoices and source material, which is labour-intensive and costly,” he says.
While this has an obvious and positive impact on your bottom line, some of the less obvious costs can also be saved using cloud-based software. For example, there’s no need to invest in having an IT team maintain the system, since cloud vendors handle server and software maintenance, as well as tech support.
The vendor may also take care of system upgrades, and you no longer have to pay for your own data storage.
Data security is key
One of the big concerns about switching to the cloud is data security. Breaches in security can expose both your business and that of the clients, which would be disastrous.
There’s no shortage of stories in the media where breaches have done irrevocable damage to a business. But according to some reports, leaving your laptop unattended is riskier than using the cloud.
Puffe says the key is to choose a reputable vendor with a lot of industry experience. The reputation of the hosting partner is also important.
“Ask your vendor if they are certified by the Australian Tax Office to comply with the new stringent operational framework,” he says.