Things we count as “common” today were only figments of science fiction writers’ imaginations forty years ago. Motion detecting doors, self-parking cars, global video chat. These are now an ordinary part of life. Change is happening rapidly in every sector, leaving no one unaffected. How is this impacting the accounting industry? What else is to come?
How the accounting industry has changed
All of us in the Xero community have watched these changes over the past five years, and they are not trivial. The shift is not just “cloud based accounting”. In 2011 there were at least 17 cloud based accounting systems available in Australia, the UK, the USA, and New Zealand. But what Xero has done is truly significant. And it’s based on the accelerating pace of change in today’s world.
Xero’s contributions are wide and broad. But three elements stand out.
- Xero woke up the world to cloud based systems as the future of the industry. Despite many other cloud systems, it was Xero that shook up Intuit, Sage, MYOB, and others.
- Xero built their sales vision around helping SMEs. Whether the client was an accountant or the business owner. For Xero, the objective was to bring companies to greater financial stability and performance. Xero driven accountancy firms focus on service, not just tax and compliance.
- Xero expanded its global universe through working with value added developers (e.g. Receipt Bank, Deputy, ProfitSee, and hundreds of others), who all share a passion for helping SME companies.
Big accounting firms are now moving into the SME marketplace
This expansion of value added developers has generated another massive shift. Features and services that were only available to large corporations are now available to SMEs. In many cases, the seamless integration with real-time data in accounting software has provided tools and benefits far beyond what is being done in Fortune 100 companies.
This has created an impact on accountants they did not expect. The demand for value added services to SMEs is growing very quickly. Business owners find out what can be done, and they go “shopping” for where to get it. How large is this impact?
Historically, accounting firms that primarily service SME companies offered only tax and audit services. The accounting firms that were offering value added services were the bigger organizations. Places like Ernst & Young, KPMG, Deloitte, Price-Waterhouse-Cooper, and similar sized firms. The difference was that their services were from mid-sized on up to large corporations.
That has changed. Many of these large accounting firms now have a dedicated focus towards the SME marketplace. Why? Their traditional clients have grown “smarter” and are squeezing the price/value proposition. The larger accounting firms have realized the SME marketplace is the largest opportunity for their companies globally.
Though most of them are in the early stages of learning how to provide these services to SMEs, one thing is certain. They have deep pockets and a long, successful record of service to business.
The chain reaction has begun. In today’s world, five years is a long time. Broadening your services to the SME market is occurring faster than you think. The accounting industry will be unrecognizable to most five years from now.
Embrace the change. Those that do not will be left in the past.
Peter M. Vessenes is the CEO of ProfitSee. ProfitSee gives you access to financial intelligence and reporting tools typically reserved for large corporations. They provide CFO-level financial insights for small and mid-sized businesses.