Executive Round Table delivers fascinating insights on what's getting American accountants excited

When an invitation for the 'Gathering of Eagles' arrived in my in-box, I was intrigued. In my 30 years working in the profession and at Sage, I cannot recall one event in the UK where everyone comes together to share insights and perspectives for the common good of the profession. This was too good an opportunity to miss with the chance to connect with some of the US accountancy profession's top thought leaders, software vendors and media at an event hosted by the CPA and AICPA in New York.

Here are the highlights:

Heightened awareness of position on technology adoption curve

What was fascinating to see was how US firms demonstrated a rare level of self -awareness based on where they position themselves on the technology adoption curve. They had taken the time to look closely at their own firms' response to technology and had openly positioned themselves as 'Innovators' or 'Early Adopters' or even 'Laggards' The discussion that took place was all about helping to match up the more innovative software providers with accountants who are eager to differentiate themselves through innovative technology. This makes it all together easier for vendors to find the people who are ready to consider their services.

Surprisingly the UK leads US in Cloud accounting software adoption

It is a misnomer to think that the US is more advanced in Cloud technology adoption than the UK. While globally, there is a massive push for the small business market to transition from their desktop accounting software to cloud based accounting applications, it is *New Zealand and Australia that are leading the way followed by the UK and with the US trailing behind with just 5% of small business having chosen the Cloud option.

One of the most popular topics was the Cloud with many mentions of being 'past the tipping point' but the bigger issue to me seemed to be that the same generic terminology was continually being used without any detailed context. I spent time discussing this with James E. Carpp, Director of Consulting, at Rehmann, one of the largest accounting and consulting firms in the US, and he explained his firm's view: "We believe Cloud computing is the key differentiator going forward. Organisations can free up their capital, select best-of-breed solutions that provide for scalability and eliminate the need for in-house information technology resources while at the same time enhancing productivity through streamlined solutions."

Clients' needs are changing

US CPA firms reported that Cloud is the biggest change in terms of technology to affect the profession and yet, it appeared to me listening to some of the accounting firms that attended that they still need to be convinced that this isn't about them and what technology they need to adopt, also it isn't about IT per se; it's about evolving and providing up to date modern services their clients want and expect from them.

It's about evolution not revolution and things have a habit of being cyclical. For example, the new cloud technologies and software offerings promote more real time collaboration between accounting firms and their clients and this means more real-time data and insights. As an example, accountants who have embraced the collaborative technologies have evolved the old and out of favour booking service and turned it into a modern up to date and hugely valuable client accounting service. Some firms also offer a virtual CFO service as part of the package. This type of outsourcing model is a huge source of growth for forward thinking US firms.

A UK technology company leading the world with a very different proposition

The news that our baby, MyFirmsApp had been named the best online App for accountants by Accounting Today broke during the Roundtable and helped reinforce the UK as a leader in innovative new technology.

Technology is disrupting the traditional relationship between firm and client, by enabling Non-Accountants to become the first port of call for queries on accounts, finance and tax – at MyFirmsApp we call this the Google-effect. A large software vendor even declared at the event that AI and machine learning would result in the end of the accounting firms. Fortunately, accountancy firms are uniquely well placed to ensure that they do not become disenfranchised as technology disrupts the profession. When I asked James Carpp for his view he echoed this: "The current trend is clear, momentum is moving away from the personal computer to mobile devices as well as from in-house solutions to SaaS solutions. As our clients make this transition, firms need to be on the front end. The next logical conclusion for firms is to provide a focal point to gather disparate data into an easy to use mobile application. Firms that do this will remain relevant."

I also spoke to Geni Whitehouse, a keynote presenter whose aim is to make accountancy and technology interesting and writes a highly entertaining blog 'Even a nerd can be heard'.  Geni sees the value and potential of mobile: A firms own App is a no-brainer for any accountant who wants to stand out, own their brand and meet their clients where they are – on their phone.  The mobile solution is the missing piece in providing timely and relevant information when managing clients."

Blockchain

The excellent session led by Ron Quaranta on Blockchain really grabbed my attention. The technology behind Bit-Coin is a game-changer and is another example of the Internet and collaboration in real time driving change. Blockchain is set to impact accounting firms globally and potentially has serious implications for accountants and auditors. The profession has the opportunity to evolve new services that add value so I suggest accountants everywhere to get up to speed.  Expect to hear a lot more about Blockchain.

It was a real honour to be invited to help shape a vision for the future of the profession and in her own inimitable way, Geni summed up the 'Gathering of Eagles' perfectly. "This event reinforced the importance of continuous learning that goes far beyond the basics needed to maintain our professional designations. Too few traditional accountants are even aware of most of the incredible technology that was on display at this gathering. Whatever the medium, we accountants must keep learning so we can constantly evolve and innovate."

*Source – Panalitix 2016

About the author

Gavin Disney-May is a senior executive, corporate development professional, entrepreneur and investor with a proven track record of leadership and achievement in the software industry. He currently acts as a strategic adviser to a number of technology businesses, M&A firms and private equity houses and is

Chairman of MyFirmsApp, a global FinTech company and the world leader in App and mobile technology, with a particular focus on financial advisers, accounting and bookkeeping firms.

www.myfirmsapp.co.uk

Among the many disruptive technology trends impacting the way we do business, blockchain is one that is less well known within the accounting community. However, given its potential impact, blockchain is certainly not a trend that accountants can afford to overlook any longer.

Defined as an open, distributed ledger, blockchain technology records and verifies transactions without any trusted central authority. The technology itself exists as a file that maintains a continuously growing list of ordered records called blocks. Each block contains a timestamp and a link to a previous block using a "fingerprint." Blockchains are resistant to modification of data and cannot be altered retroactively.

Here are some potential uses for blockchain in accounting and audit:

• Traceable audit trails;
• Automated audit processes;
• Authentication of transactions;
• Tracking ownership of assets;
• Development of "smart contracts;" and,
• Registry and inventory system for any asset, ranging from raw materials to intellectual property

While many of us associate blockchain with digital currency, like Bitcoin, its potential impact is much wider. From medical records to identity management to land rights and global trade, blockchain acts as an indispensable ledger — a central point of truth. Instead of companies keeping and reconciling records of the same transaction in their separate, privately managed databases, or ledgers, both sides of the transaction are recorded simultaneously in a shared ledger. Because of this capability, as well as its ability to record transactions in real-time, blockchain is poised to up-end traditional methods of invoicing, documentation, contracts, and payment processing for businesses and industries both large and small.

"In the future, virtually every function in the world of financial services will be displaced, disintermediated and decentralized," said Ron Quaranta, chairman of the Wall Street Blockchain Alliance during an American Institute of CPAs / CPA.com Executive Roundtable in February. "The Internet gave us a powerful way to share and access information. Blockchain now gives us a powerful way to share and access value."

Impact on audit practices
Like most forms of technology, blockchain in accounting and audit greatly reduces the potential for errors when reconciling complex and disparate information from multiple sources. Further, accounting records are not alterable once committed under blockchain, even by the owners of the accounting system. Because every transaction is recorded and verified, the integrity of financial records is guaranteed. While impressive, this technology has the potential to greatly reduce or even eliminate the need for auditing resources — potentially disrupting the accounting profession as a whole.

"Our technology has finally caught up with our desire to transact, without the need to trust the other party, and without the need for an intermediary," said Quaranta.

With such upheaval on the horizon, you'd think accountants would take note. However, in a recent survey conducted jointly by Thomson Reuters and the Chartered Institute of Management Accountants, only 4 percent of respondents selected blockchain as the disruptor that will have a great impact on their business 25 years from now. We believe it may be even more disruptive to the profession than machine learning, which will have a substantial impact on the profession, and we also believe the impact will start to be felt within the next few years.

Given the consequences, accounting firms who rely heavily on their audit practice may want to think about cultivating and diversifying services and clientele. With Blockchain, is there even a need for audits in the future? As with all new and potentially disruptive technology, it's important to understand the opportunities and consequences, as well as how your firm will move forward as adoption of advanced technologies, like blockchain, continue to accelerate.

Embracing disruption
While we cannot change the fact that technology is disrupting our profession, we can choose to embrace it and find new, value-added ways to serve our clients. The most successful firms are transforming by moving away from traditional compliance activities and towards strategic advisory roles focused on helping their clients run a better business, improve their personal financial situation, or assess the risks involved with making a change.

So, while blockchain in accounting and audit may not yet be felt, it's never too soon to survey the technology landscape and adjust the strategy of your firm accordingly. In such a fast-paced technological environment, being informed and open to change is really the only way to remain successful.