With the role of accountants becoming increasingly automated, analytical skills are becoming more critical than ever. In order to provide good financial advice about the future it is critical we understand both the current context in which we operate, and likely developments in the future.
PEST is a methodology for analysing the external factors that affect the sector a business or firm operates in. The letters stand for:
- Political
- Economic
- Social
- Technological
This blog is the last in the series. We’ve already spent time on Political, Economic and Social Factors. That leaves us with Technological Factors left to explore.
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At the forefront of all our minds right now is Making Tax Digital. As of March 2019, Accountancy Age was reporting that only 30,000 of the 1.2 million companies needing to register with HMRC had done so.
So, the first point is that if you haven’t started preparing yet, it’s time to get started. The software providers have mostly got their act together and have generally made it pretty simple. If you find yourself in doubt, they might be your best source of advice, but HMRC will be helpful as well. Initially, they will keen to help you comply, not to punish you.
If you are in practice and will be acting as agent, the need is all the greater. If you work in a practice that has been holding out against investing in technology, you will now get dragged along by government.
Staying with those in practice, for me the key technological driver of change is cloud accounting. It enables you and your clients to maintain one set of records you can each access without sending files and backups backwards and forwards. Now that we are all constrained by GDPR, that could not be more important. If you have SME clients, mobile apps could be the solution to getting them to keep better records, making it part of their everyday routine.
Moving elegantly on to the SME sector, there are great opportunities for simple data analysis. If you are involved in producing management accounting information to help the managers or owners of the business make good decisions, it has never been as cheap or as straight forward to look for possible strategies by interrogating the data.
Meanwhile online tools – payment systems, banking etc – are no longer the preserve of big corporations. You may not be in the business of developing AI tools, but the software providers are investing heavily and producing some great productivity enhancements.
For those in larger corporates, it is all about big data. It’s time to get up to speed with Power BI as Microsoft moves its pivot table generation into the new platform. So that is an analysis of the impact of technology on the accountancy profession. But what about your business or your clients? AI, Blockchain, 5G networks are all headed your way and may have a significant impact depending on what sector you operate in.
Here is a list of some of the new technology that you might want to think about:
PEST Technological factors
- Big data, data analysis and data science
- Analytics tools
- Cloud accounting
- Tax software
- Machine learning
- Robotic process automation
- Artificial intelligence and intelligence augmentation
- Mobile accounting
- Data visualisation
- Block chain technology
- Bitcoin and crypto-currency
- Deep learning
- Embedded and self-serve analytics
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