It’s International Accounting Day. A day put aside to truly stop and recognize the accountant in your life and what they do for you. The accountant is having a bit of a renaissance at the moment. Small businesses are having a rebirth in the global consciousness with shows like Shark Tank making stars out of entrepreneurs. And with them, come their books. The power of accounting is now being felt on a global scale, as behind most great businesses, is a great accountant. Now movies like The Accountant are showing that not only can one person make the difference in your business, but they don’t have to adhere to traditional stereotypes.
Disruption in accounting
Our US Head of Accounting Amy Vetter believes that the whole accounting industry is coming into its own.
“The amount of disruption currently occurring in the accounting industry is unprecedented. Millennials, in particular, are introducing the industry to a new way of working, as well as a new set of technology that is changing the way we do business.”
“From the client’s perspective, we’re able to move accounting professionals from “the person who does my taxes” to “the trusted business partner I can’t do without.” While there is a knowledge gap that needs closing, technology is driving new opportunities for accounting professionals and changing the future of our industry.”
“I’m also excited about the changes technology is creating when it comes to globalization. In the past, accounting professionals were constrained by geographical borders. With the cloud, an accountant in New York can service a small business in the UK just as effectively as they would someone in their own backyard. In this borderless tech world, accounting professionals are now rethinking how to market and sell services. With the right approach, opportunities for client prospects are borderless and available for firms of all sizes, not just the large firms anymore.”
Where accounting is headed
Our CEO Rod Drury think the next phase of accounting is rooted in double entry, AI and machine learning.
“In our time, double-entry bookkeeping has fallen out of favor after a six-century run. Today accounting is done on computers with software packages… built for single-entry bookkeeping,” he said.
“If we bring back double-entry bookkeeping to business, to the commons, to the internet, to the marketplace, and to our everyday lives – we’ll start another renaissance. And Xero is the only double-entry accounting system of scale that is available for small business.”
Taking the next step for accounting means incorporating all the current technology to boost the field, and therefore what it’s able to do.
“Automation and machine learning are improving traditional services by streamlining compliance processes and creating new business opportunities, many of which are either no-touch or limited-touch,” Rod said.
“Bankers can see a full set of historical and audited numbers, and with a professional accountant able to review the numbers each day, the risk of lending capital to a small business falls substantially.
“Through a fundamental rewiring of how small businesses operate, we light a fire under the engine room of our economies. Millions of new jobs will be created. New categories of work will be established on top of these new platforms and new services will be born.”
“Every small business and accountant now has a super computer working for them.”
“We expect in the next five years, the pace of innovation will be quicker than the last ten. And unlike previous technology shifts, the benefits won’t be experienced by just big enterprise – they will flow to the smallest businesses, deep down in the engine room of our economies.”
What the future will look like
An example of how machine learning will start to flow into small businesses and accounting practice is the Xero Chatbot which Rod demonstrated on stage. Xero has been working on further integrating our small business platform with products like Facebook Messenger so you can access the information you need, where you want it.
Every month, over 1 billion people around the world communicate with friends, families and over 50 million businesses on Facebook Messenger, interacting with customers, keeping them up-to-date.
Built on Amazon Web Services, the chatbot leverages machine learning technology and the $1 trillion worth of transactional data processed in Xero over the past 12 months to enable businesses to query their latest financial data, including who owes them money, when their next bill is due or how much money is in their bank account. It also connects to the Xero Advisor Directory and can recommend a suitable accountant or bookkeeper in their area. Xero subscribers will also be able to discover new apps in the Xero ecosystem.
So what’s next? Well, according to Rod: “Now we need to make accounting magical. Machine learning is how you create that magic.”