Over the next few years, we will probably see an option for a direct connection between end-user accounting software and the tax department.
But would you be confident to push the button and submit the information yourself.
Could you risk being fodder for the tax department?
We can prepare to see more activity on the IRD's end as information becomes available to them in real time. I imagine they could flag variations in margin or revenues within industries using computer algorithms to audit information.
In an NZICA member survey, 98 per cent of accountants said their clients were not fully prepared when submitting their end-of-year financial statements.
They also revealed that top mistakes made by clients when doing the end-of-year books were miscoding transactions (77 per cent) followed by failing to provide sufficient detailed or supporting information (72 per cent).
So it doesn't look like accountants will be completely out of a job any time soon - they'll still be needed to keep an idea on how accurate information is. But we won't have the same level of work to do in making sure tax law is correctly applied.
So then will we be overstaffed? We have 33,000 chartered accountants plus book-keepers plus tax agents plus accounting support staff in New Zealand. What will accountants then put on their timesheets if they're not punching numbers and being bean counters?
I think we need to move towards being business mentors.
Rather than reporting on the past, we will be helping to determine and plan their client's futures, assisting with growth, development of markets, business systems, brand and succession. This involves regular contact between accountants and clients, which is a much better use of their skills.
Accounting then also becomes a free market, not a grudge purchase. You choose your adviser based on their skill to help you grow your business rather than a "have to" yearly tax return process.
