Everyone knows the picture of a traditional accountant – a bit staid, buried in the detail, hard to reach, probably not very forward looking. Like all stereotypes, it is unfair but like all stereotypes it contains more than a grain of truth.
The thing is that it took a certain type of person to deal with the drudgery of wading through mountains of data entry into spreadsheets and spotting where things had got missed.
What is more, until the not too distant past, your accountant was also your auditor. All company accounts had to be audited (no longer), and the role of auditor is not too dissimilar to that of government inspector – all about finding out where the books were being fiddled.
Add to this a business model which is based on an hourly rate of fees and it creates another incentive to be slow – you get paid more!
However there really is now an alternative to this way of working, and quietly the profession is going through a revolution.
One thing that has changed is technology, tasks that used to take days, can take hours. The quality required of accountants now is not an appetite for dull repetitive work but a mixture of IT and problem solving. As we have written previously software like Xero and Receipt Bank is semi automating bookkeeping. To a traditional practice this can be a major threat, the chargeable hours are shrinking away and the skills required are now different.
The internet has played its part. Accountants cannot get away with hiding behind jargon in a way they once could – the information is out there in the public realm.
And finally government has been cutting red tape. Relieving small companies from the burden of having an audit is one example. Sole Traders with turnover under the VAT threshold are now given the option of a three line set of accounts: Income, Expenditure, Profit.
The wonderful thing about this revolution is that it has given space and resource to an aspect of accounting that has been starved of space in small business – using the numbers to help develop and grow a business. Like a clearing in a wood allowing flowers to grow, the space opened up by these changes has allowed accountants to use their training in getting businesses to perform. Big business uses armies of people with these skills and does very well through them – they are called management accountants.
So business owners now have a choice: Traditional or Alternative. Hourly fees or fixed fees. Spreadsheets or Cloud Computing. Stuck in last year’s bookkeeping or looking at next year’s projections. Inspector or Collaborator.
At Crunchers we are just thankful that our role could get so much more interesting and fulfilling.