We're sometimes guilty of giving accountants a bad rap.
We joke about them being "boring" and a "necessary evil", but is there anyone we hold in higher regard for their financial acumen? That we trust more to interpret our financial data and sort out our tax?
And though some futurists predict advances in technology will eventually make accountants redundant, Adam Davy, head of advisory at BDO NZ, says it all comes down to how you define accountancy and whether the profession is able, willing and prepared to change.
"There is also talk about accounting firms needing to hire a different type of person. In my view, they still need to be numerate, first and foremost, and it is actually the profession's leaders who need to harness, direct and empower the future generations of accountants."
Davy admits businesses of less than $2 million per annum turnover — and that's most New Zealand businesses — won't need accountants in the future if they're just after historical numbers. But if they want someone to help understand how to get the best out of the business, they'll need the new incarnation of accountant. And he says technology will help the accountant carry out this enhanced role better, faster and more cost-effectively than in the past.
"For larger businesses, including the listed and multi-national, there certainly is a place for the more complicated accounting and forecasting that allows businesses to borrow, grow, or raise capital for expansion, or sell for succession," says Davy.
"This is a level of professional judgment that will still require high-level accounting professionals."
Another financial technology sector that may become largely automated is bank approval for lending. However, Davy says banks don't lend solely on numbers — there's a human element involved, and accountants are valued for their role in assessing people, strategy, management capability and business behaviours.
As technology develops, clever accounting firms will assist clients to move forward with the new technology, says Davy.
"It needs to be genuinely cloud-based, and enable the use of add-ons in ecosystems. In my view, the accountant needs to understand, promote and assist with these add-on programs as we are best placed to understand and integrate with the client's business."
Davy notes accountants will need a change of focus to prioritise time on other critical areas of a business such as strategic planning and family business areas, along with succession and legacy objectives and looking to provide more holistic service solutions to clients.
Automation has, in fact, had many positive benefits on the accounting profession. It has allowed instant feedback and insights so that the accountant can give current and predictive advice better, quicker and more accurately than ever before. Davy says it means you can monitor bank covenants on a daily basis, such as interest cover on debt and equity ratios, so you can become aware of an issue before it arises.
"Banks much prefer a proactive borrower. Technology makes it easy to get and deliver in a more useful and user-friendly way that enables regular input from your accountant to help you run your business. It also lends itself to using the time you have with your accountant for more value-add advice."
Davy says the modern market demands accountants help with businesses, no matter where they are in their life cycle — whether a start-up or mature, whether seeking capital or successors.
"Once both the market and the accountant realise this is what is most valued, the focus can and will change to helping the business set, monitor and achieve its goals. We have created BDODrive to address this need — BDODrive is a range of professional tools and insights that can help businesses reach their goals with the benefit of clear advice."
What it all boils down to is that the "people aspect" can't be replicated by accounting programs. Davy says machines are a long way off understanding human emotions and vulnerabilities that can make or break a business.
"Accountants should be a part of the client's governance and/or management, such that they are regularly advising on the business instead of only looking at historic numbers."
In five years' time, Davy truly hopes "the compliance stuff — PAYE, GST, FBT, income tax and financial statements for smaller businesses — is automated to the point that between the likes of Xero, your bank and the IRD, you won't need an old-style accountant just to crunch the numbers. Instead, the industry will become one of trusted advisers who have a first-class understanding of the financial and non-financial aspects of business."
He says if done properly, accountants in the future should have a highly-valued role in the business community where they are seen as a critical part of business survival, development and growth.