We know the landscape of the bookkeeping and accounting industry continues to evolve at rapid speeds, and that to succeed you need to stay ahead of the curve. Nowhere has that been more apparent than at Xerocon South over the last few days.
That’s why today, we invited four leading industry bodies in the Australasian bookkeeping and accounting world to take to the Xerocon stage. As they can share the insights on their agenda today, you can be more prepared with what to expect for tomorrow.
Here’s a wrap up of what they said in this morning’s sessions:
Institute of Public Accountants Australia (IPA) update
Spokesperson: Vicki Stylianou, Executive General Manager Advocacy & Technical
As the largest SME-focused accounting body in the world, IPA started its industry update by recognising that the accounting profession is growing strongly and, according to market trends, will be worth $20.6 billion by 2020. Not surprisingly, it named technology-related services as a driver of this change.
Acknowledging that small-to-medium practices continue to face concerns keeping up with the impact of regulation and automation, IPA identified six key growth areas for the future: management and consulting services, business advisory, superannuation, wealth management, financial planning and tax consulting.
Speaking at Xerocon South, Vicki Stylianou urged delegates to “specialise, diversify, consolidate, acquire, transform, embrace and build new skills.”
On the subject of government, Stylianou explained that higher standards of financial advice will be effective over the next few years after a concerted effort from government. Meanwhile, the ATO continues to release its new streamlined reinvention program.
Stylianou brought the IPA update to a close by telling delegates that the social value of accounting is being increasingly realised – thanks in part to developments from the United Nations Sustainable Development Goals. “Many business leaders are focusing on sustainability and purpose, and the role of their organisations in society,” she said.
Institute of Certified Bookkeepers Australia (ICB) update
Spokesperson: Matthew Addison, CEO
Most of us within the accounting and bookkeeping world are already aware that the ATO is redesigning its systems to more closely align with the working reality of Australian SMEs. Speaking at Xerocon South, Matthew Addison also explained how IBC has been heavily involved in the recalibration – encouraging a ‘significant shift of thought’ on behalf of the bookkeeping community and, by extension, their clients and employers.
“Businesses should get on and do business, enjoy doing what they do, make money and then use natural business systems to facilitate the correct payment of the correct amount of tax,” he said.
Addison then identified a number of ‘big picture’ development projects that are set to impact the way accountants and bookkeepers interact with the ATO in the future. Namely, the ATO will introduce a new:
- Relationship Authorisation Manager
- Cloud Software Authorisation and Authentication Management
- Preferencing System – i.e who gets what mail and who gets told about it
- Practitioner Lodgement System (PLS) – how we lodge and interact with the ATO digitally
- Portal – using up-to-date technology to bring us a better portal services.
Finally, he referenced projects – both from within the ATO and beyond – that will directly impact the way we work with businesses. These included:
- Simpler BAS from the ATO – getting rid of unnecessary reporting
- Single Touch Payroll from the ATO – introducing a more integrated system
- eInvoicing – a digitally generated invoice system developed by a collaboration of industry, advisors, professional associations, government, software companies and the banking sector.
“It will change the software, it will change the bookkeeping, it will make things more efficient,” he said.
Australian Bookkeepers Network (ABN) update
Using the findings of the ABN Benchmark Report as the foundation for its update, the ABN identified four industry-wide trends: revenues are in decline, average working hours are in decline, the average fee-per-client is in decline, and charge rates are rising.
“In short, bookkeepers are charging more per hour to more clients but making less money,” Peter Thorp said.
Thorp identified the top three ‘sleep deprivers’ being faced by the industry, as ‘sourcing new clients, time management, and obtaining timely and accurate data’. To counter this, he explained that technology, knowledge and clients were the three key areas of growth that will offer the greatest impact on the business of bookkeeping right now.
To provide the assembled delegates with different paths of opportunity, Thorp presented five routes of action for bookkeepers: do nothing, remain focused on compliance, join the offshore brigade, aggregate or employ, or look at a niche offering and specialise.
“We look for trends and we look for issues – to give you a commentary of your industry,” Thorp said. “It’s more than stats: it’s about providing guidance. Because behind every good business, there’s a good bookkeeper.”
Chartered Accountants Australia and New Zealand (CAANZ) update
Dr Michael Fraser’s session focused on the ethical hotspots in business banking and finance, noting that ethical behaviour and a purpose beyond profit are central to successful business. Together they serve to attract and retain clients and top talent, he said, and build trust in an organisation.
“Unethical behaviour in a business context is not a case of a few bad people doing bad things, or people with integrity versus people without,” Dr Fraser said. “Good people placed in an ethically challenging environment will often suffer ethical lapses. Research suggests these are often unconscious.”
Citing the example of the London Interbank Offered Rate – a scandal that spanned several countries over a decade and was dubbed the “biggest financial fraud of all time” – Dr Fraser shared the words of one of the men to be convicted:
“The practice was tried and tested, it was so endemic within the bank (UBS), I just thought … this can’t be a big issue because everybody knows about it…. (it was) such an open secret.”
Ethical behaviour, he told delegates at Xerocon South, is in fact influenced by three different factors:
- Structural factors, such as the system we work in. This includes laws and regulations, policy procedures and codes of conduct. In banking, for example, the remuneration structure (bonuses) is a significant structural factor.
- Social factors, such as the expectations and reactions of colleagues, clients and leaders; lack of diversity and competitive pressure.
- Individual factors, such as biases that allow us to make decisions without considering the ethical implications of our actions.
The answer, Dr Fraser concluded, lies in culture. Leaders should aim to show integrity and lead by example, organisations should actively support diversity, and everyone in the team should have the ownership to pick up the large and small behaviours that threaten ethical behaviour.
“Rules and regulations are important but will not succeed in isolation,” he said. “They must be supported by an ethical culture.”