When asked, the great ice hockey player Wayne Gretzky had a simple explanation for his almost supernatural ability to be one step ahead of his competition: “I skate to where the puck is going to be, not to where it has been”.
On the ice, Gretzky detached himself from the herd merely chasing the puck. Instead, he focused on the game and how it was changing. He was onto something; not just in ice hockey but in life.
Uncertainty doesn’t call for a ‘wait and watch’ approach
Since last summer’s EU referendum, many have opted for a ‘watch and wait’ approach. ‘‘Brexit means Brexit” has arguably become the defining phrase of our current political moment. Not because it gives us any clear insight but rather because it typifies an idea that has proven impossible to define.
The truth is that, for now, no one knows what Brexit ‘means’. Negotiations haven’t even started and could easily meander on for several years as negotiators attempt to uncouple the UK from the intricate mesh of EU laws and regulations. Ultimately, what Brexit means will be left to these experts.
Accountants need to provide a foothold for their clients
Here in the day-to-day, far removed from negotiating tables, it’s important to rather focus on what Brexit is: it’s disruption, same as it ever was. For your clients, it will mean uncertainty. Some businesses may not make it; others will adapt and thrive.
Just like after 2008’s financial crash, British businesses are clamouring to find their foothold in Brexit Britain. To manage this transition successfully they will need much more from their accountant than having their tax returns filed.
And while Brexit has changed a great many things, other trends have surged ahead unaffected.
The digital transformation of accounting never stopped. The future of accounting is still arcing away from compiling data to using digital tools to analyse it and offer specialist advice to clients. The uncertainty brought on by political upheaval only increases businesses’ appetite for this specialist guidance.
Beginning in 2017, this process will be accelerated even further by HMRC’s incredibly ambitious digital transformation agenda. Making Tax Digital (MTD), as the project is known, will effectively mandate that taxpayers use software (with a few small exceptions, here and there).
While almost nothing is known about Brexit, there are things we know for certain about the future of accounting. Under MTD, self-assessment as we have it now will cease to exist.
Instead, taxpayers will file four quarterly updates directly through their accounting software with one bigger return at the end of the year. Accounting will form part of a digital ecosystem straddling both the private and public sector.
The end of compliance (as we know it…)
Of course, filing clean, timely accounts will remain important. Clients may need to have their information sense-checked - but it won’t be the same. HMRC has effectively signalled the end of compliance as we understand it. It’s now for certain that the future of accounting lies beyond the realm of compiling data.
You and your client will be more connected than ever as accounting software enters its MTD golden era. Alongside the businesses that have already made the leap, a whole new generation of digitally enabled clients will begin to emerge.
Many of the traditional duties of the accountant will become automated. Invoices captured digitally, for instance, will flow seamlessly into a company’s profit and loss statement and balance sheet. All that will be needed is a cursory inspection to ensure its integrity.
With this will come new streams of data ready to be manipulated, analysed and articulated to a bewildered populace. Which profession is more suited to the task of diligently analysing reams of financial data than the accountant?
Future proof accountancy
This is why accountants need to stay focused on where we’re heading. Brexit is an event on a more important timeline. No matter what Brexit we get - hard Brexit, soft Brexit - accountants need to busy themselves with the critical task of future proofing their practices.
Inside or outside the EU, the broader trend of technological progress will not stop. Rather than getting distracted by unknown unknowns, the time is now to get ready for accounting’s digital future.