Accounting For Small Businesses is Changing

Wherever you may think where the future of accounting for small businesses lies, one thing is for sure: the times they are a-changin’. Over the last 25 years, the changes to the accounting profession have been widespread and pervasive. Of course, this will inevitably have a knock-on effect on startups and small businesses.

Everything from the medium through which the accountant does their business, to the role of the accountant, to the role of the small business owner have all changed irrevocability. These changes are not at an end. If anything, the developments will only speed up.

There is much speculation as to what these advancements in the future will involve. One thing is for sure. Technological advances will drive the innovations as they have for the last 25 years.

These advances will reach into all aspects of the accountant’s profession.

The accountant must be adaptable and flexible in the future. Clients are not the laymen they used to be. They will demand more. Virtual accounting will become the norm.

Change to Traditional Forms Of Revenue

Tax returns have long been the bedrock of many accounting firms’ revenue. However, technological advancements in accounting software has, and will continue to, significantly decrease the time taken to complete tax returns and other basic bookkeeping tasks. This means that accountants will have to charge less as a result. What are the consequences?

Firms will have to be more creative in the services they offer. Savvy small business owners will demand and expect more services as the traditional services that provided consistent income for accounting firms become more automated.

Clients Want Additional Services

With the ease of access to information on the internet, everyone is becoming more informed and savvy. They will be aware that the traditional accounting bread and butter tasks do not take the time they used to.

They will also be aware of what the accounting firm can provide if they know to ask for it. There are a number of areas outside of traditional accountancy that these new clients will want assistance with, for instance: help with understanding and managing cash flow, help with legally reducing tax payable, and help with asset protection.

In the future, all firms that want to compete and survive will have to provide these services and more.

Virtual Accounting Will Become The Norm

Through the development of virtual accounting programs such as Xero and Handdy, many of the more straightforward accounting tasks have been simplified. It will be within the realm of possibility for the small business owner to take care of these tasks.

This will free up the accounting firm to conduct other more complex work such as finance broking, wealth creation, and risk management.

Ideally, this would lead to an increase in productivity. Regardless of what changes to accounting and small businesses will take place, what is not in doubt is that changes will take place. The accountant and small business owner must be prepared so as to future proof their companies.