The future of accountancy: what do accountants think about digital tax and technology?
As the accounting landscape continues to shift, we wanted to find out what accountants think about the big changes facing the profession, such as digital tax and automation.
A sea change for the UK’s accounting landscape
The UK accountancy profession is set to experience a seismic technological shift as the government’s Making Tax Digital (MTD) agenda comes into effect, requiring business owners to provide regular tax updates to HMRC through software.
For many contractors and micro-business owners, this will represent a quantum shift in how they manage their finances.
For accountants, the challenge will be preparing their own practices for digital tax so they can benefit from the inevitable demand among clients for expert advisors who can help them navigate this monumental legislative change.
Murmurs from the market: the results from our accountants’ survey
With such significant change on the way, we surveyed more than 150 accountants in practice* to gauge their opinions on the current state of the accountancy profession and discover what they think about the effect that technology and digital tax will have over the coming years. The results show that while these changes are not universally embraced, there are many accountants who are optimistic about the future.
Making Tax Digital
The mood among accountants about MTD appears to be relatively enthusiastic. Half (50%) of those we surveyed said they felt positive about the government’s proposals and 54% said that providing quarterly updates would help their clients have better visibility over their business health.
MTD is the UK government’s plan to digitise tax for businesses by 2020. How do you feel about this plan?
- I feel positively about it (50%)
- I feel negatively about it (35%)
- I don’t have any opinion about it (11%)
- I don’t know (3%)
- I haven’t heard of MTD before (1%)
Do you think that providing quarterly updates will help your clients have better visibility over their business health?
- Yes (54%)
- No (44%)
- I don't know (2%)
However, many accountants also seem to be pragmatic about the new legislation and the effect it will have on their practices. 53% said they expected MTD to make their clients’ work harder, while 44% said they expected the proposals to have a negative effect on their clients.
How do you think your work will be affected by MTD?
- It will make my work harder (53%)
- It will make my work easier (28%)
- It will have little or no effect on my work (10%)
- I don’t know (9%)
What impact do you think MTD will have on your clients’ businesses?
- It will have a negative impact on my clients (44%)
- It will have a positive impact on my clients (34%)
- It will have little or no impact on my clients (14%)
- I don’t know (8%)
Automation and the future of work
Increasingly sophisticated technology is making it easier for clients to perform basic bookkeeping tasks, and this means that the traditional role of the accountant is beginning to change. With this in mind, we also asked how the accountants we surveyed how they felt about the evolving role of automation in their work.
In our survey, nearly two thirds (62%) of respondents said that they didn’t think they would broadly be doing the same day-to-day tasks at work in five years’ time.
Do you think you will still broadly be doing the same day-to-day tasks at work in five years' time?
- No (62%)
- Yes (36%)
- I don't know (2%)
And 96% said they thought accountancy would be automated to some degree within the next five years. That includes more than a fifth of respondents (22%) who said they thought “all or most” accountancy work will be automated.
What do you think will be different about your work
75% think they’ll focus more on providing advice to clients
69% think they’ll spend less time on manual tasks
57% think they’ll work remotely more
34% think they’ll spend more time on tax reporting
31% think they’ll have less face-to-face contact with clients
22% think they’ll have more face-to-face contact with clients
10% think they’ll spend less time on tax reporting
1% think other things will be different about their work
Many accountants anticipate making a shift towards providing expertise-focused services in the future. We found that three quarters (75%) of respondents who said they didn’t think they’d be doing the same work in 5 years’ time thought they would be focusing more on providing advice to clients instead.
In addition, 69% said they thought they would be spending less time on manual tasks, while 31% said they expected to have less face-to-face contact with clients in the future.
There also appears to be a strong desire among accountants to expand their skill sets, with 42% saying they intended to retrain in some way in order to safeguard or future-proof their role.
Are you intending to retrain in any way with the aim of safeguarding or future-proofing your role?
- Yes (42%)
- Maybe (23%)
- No (20%)
- I haven't thought about it (12%)
- I don't know (3%)
It’s clear from the results of this survey that accountants believe their roles are changing. These changes may be spurred on by MTD and increased automation in the workplace, resulting in a shift from compliance accountancy to advisory services.
Change is inevitable, but also presents an opportunity for accountants who take a pragmatic approach. Those who are nimble enough to react to the developments of the future will be in the best place to serve their clients’ needs and further grow their practices.
*The results were taken from a survey carried out by FreeAgent in April 2017. The study surveyed 150 accountants specialising in the small business and contractor market.Try FreeAgent for free