How much IT ‘knowhow’ do you need to hold in your practice? And who should hold it? Kevin Reed looks into why technology is vital to help your practice deliver high value ‘human’ services.

Many practitioners are taking a deep breath and preparing to get their heads around what their technology requirements will be for the weeks and months ahead. Such a task is one that falls outside of their comfort zone. But while talk of AI and robots creates a 50s-style Utopian vision, the reality is more complicated, real-life and, well, human. While the world is scary enough for practices to grasp, it’s also the case for their clients. And these clients – while happy to use tech to undertake tasks to support their business, wouldn’t think that technology would replace their unique service. And that is the same for practices. Technology can free an accountant from the mundane, placing them where their clients want them to be – providing proactive advice to help them grow. And this ‘human factor’ means that practitioners must think not only about how they provide that face-to-face service, but how the increasing and evolving use of technology will impact the future skills of their staff and colleagues.

As we have outlined in recent issues of AdvanceTrack’s newsletter, practices’ people, organisational and strategic elements must be in place to make the most of technology. Software and hardware are a means to an end, not the end itself. “Do not forget that people are the means to the end as well – the end is top client service,” explains Rakesh Shaunak, group chairman of MHA MacIntyre Hudson. “The two combined deliver that service.” The Top 20 practice has looked to add some formality into its approach to understanding tech developments. It has put in place an ‘innovation group’. This group of partners and senior staff “gaze at the horizon”, and then look to align upcoming tech with client offerings.

There is a lot of hype around artificial intelligence and robotics, but for Shaunak’s practice the key focus is on data analytics. This is enabling the firm to undertake much broader audits of client data rather than just looking at samples. Quicker and more straightforward auditing means it can be undertaken more often – so interim and quarterly audits are becoming more popular. This in turn makes the full-year audit easier. It can also be used in the tax arena as well – allowing MHA MacIntyre Hudson to benchmark clients and understand where there are opportunities to provide more wealth management and wealth generation services. So what does this mean for your staff? What do they need to know to be relevant in a modern practice? Ironically, with all this talk of tech, that isn’t necessarily the main focus of your team’s skillset. As has been said, it is all about client service.

Instead, the shift in training and recruitment has been to find go-getting, inquisitive people who have an aptitude in communication – or at the very least the energy and open-mindedness to learn. This is alongside getting to grips with core accounting and finance requirements.

“For us it’s about understanding analytics, with our people valuing soft skills training more highly than technical,” says Shaunak.

“There’s more emphasis on the ability to engage.” He admits that for some existing staff, re-training can be a challenge, even where programmes are run to help change mindsets. “We don’t always get there with some people,” he says. This issue accelerates in professionals’ career development “much more quickly than previously”, says Alison Stiles, head of business development at the ICAEW.

“Can you look at that financial information, spot trends, see problems, create advice and provide it?” she asks. Concurring with Shaunak, Stiles sees a “struggle” for practitioners that fail to grasp the nettle or help develop their staff and practice in this manner. Anyone wishing to continue in the profession must appreciate that continuous learning is now key. “Adaptability has to continue on all the way through,” she says. “So CPD on tech and its impact will be critical. The model of looking at books and then you’ve ‘learnt it’ is long gone.”

The other thorny issue to consider with technology is who’s going to look after it all? Smaller practices in particular can find this a head-scratchingly difficult thing to manage. As with all small businesses though, it’s about focusing on your core service, and handing over the day-to-day running of such matters to someone else. “You don’t need to be a tech ‘expert’, but use it as a platform. Rather than foist it onto someone internally, look to outsource it,” suggests Stiles.

Shaunak says that a “sound principle whatever the size of your firm” is to separate IT strategy from IT delivery. From this point you can then consider which aspects need to stay in-house or can be outsourced. “We’ve outsourced IT equipment procurement, while an internal team looks after maintenance,” he explains. While the innovation team brings together people from around the practice, a senior manager heads up strategy. There is also an internal head of delivery. “When you have these roles combined then it breaks down, as the person will get bogged down in operational matters,” Shaunak explains.

Carl Reader, a director at Swindon-based practice d&t, says that a full-time IT director focused on operational matters is not really needed in a smaller practice but – as also suggested by Shaunak – you will need team members that see the value of technology from a client perspective.

Formalised communication between partners and the team members using technology on a day-to-day basis is critical, he believes. Without that line, a lack of understanding occurs about what tech is needed, and how things currently work.

“As firms get bigger, beyond the sole practitioner, there is often a disconnect from what the partner wants to buy and what the team wants to implement,” he explains. “The partner is sold the story for a horribly complicated dashboard, but other staff might not understand it.”

Reader believes that the technology to interact with core accounting systems that will help provide better client advice is already available – the skills gap is in “the ability to understand commercially how that impacts the client and what to tell them”.

“Business development and technical skills can be taught,” he says. “You’re looking for that spark, to be able to deliver soft skills to help clients.”

The changing practice landscape, the impact of MTD, investment into the cloud by the major software companies, and how AdvanceTrack® is helping support practices be fit for the future. The company’s founder Vipul Sheth talks to former Accountancy Age editor Kevin Reed about these key topics, and more

Vipul, what are the pressing issues for practices in the next 24 months?

Technology is the number one issue. Knowing which tech companies will be the winners – that’s a very big unknown. They have made a lot of investment, but we don’t know which will stand the test of time. I do think Xero and QuickBooks will be the two global cloud platforms… I can’t see Sage being there. Unless Sage come up with something amazing, they’re not in the game – as a Brit, I feel disappointed about that.

The profession is losing skilled staff through retirement and mergers, leaving a gap in experience and advisory skills. Younger staff like to use tech but are not always so proficient or experienced in client engagement – that’s not true of everybody, but many naturally communicate through devices. The next generation don’t always want to take the risk of running a firm, with the responsibility and financial exposure. Firms must consider how to provide work/life balance.

Back to tech-based communication: this will be ne for 90% of scenarios, but there will be an element of the client base that wants to engage, to meet up face-to-face. The next generation of practitioner needs to be able to ‘press the flesh’, and gain the confidence of the client in a one-to-one situation. As such, succession planning is an issue that’s never far away.

Is Making Tax Digital (MTD) the game-changer, and if so, why?

MTD is absolutely front and centre for everyone, but my view is ‘never let the government write your business plan’. Build a business that goes beyond dealing with numbers; build a business that clients feel they can’t do without.

MTD is concertinaing the time window to migrate people to the cloud to do things effectively. It’s important that MTD is making firms visit this – but they should look beyond it. The law will make us help clients be compliant, but what do you do with that information? MTD will ‘help’ you keep clients out of jail – but it won’t help you make more money. What will enable that is how you use that information to make clients run their business better.

What about longer-term for practices?

Everything comes down to client service. Moving to the cloud is an essential part of providing advisory services – keeping them compliant but using other tools to give better insight to what will be increasingly operational data. By offering clients insight, you can use data to justify where you are and what decisions you’re making.

There will continue to be a market for compliance business but, over time, technology and self-service will replace those firms – if that’s all you’re delivering to clients.

Automation and AI – what should practices consider with regards their strategy, and staff levels?

Our top clients have already started moving staff to client-facing roles. When they recruit people today, the type they recruit are those they think could be partners in 10-15 years’ time. If you have enough coming through with that skillset, you’ll automatically have in-built succession… practices forget they’re running businesses.

Tech is used in young people’s everyday lives. So practices must look at the range of skills they will need. You will rarely find someone that can be an accounting technician, fully IT-literate, can run a practice and serve clients. Teams will need to be built to cover the bases.

Is it tough for firms to serve clients while everything is changing so quickly around them?

Forward-thinking firms have a small group of people running change programmes. They’re the ones most successful at implementation, and some with non-accountants going into the technological change roles.

We all need to re-skill and keep developing. I’ve had several professional roles in my career, and am doing something very different to what I did 15 years ago. We must recognise that in ourselves, and also give people the time and framework to adapt.

What types of practice are impressing you, and why?

Some cloud-only firms are very impressive. They have no shackles, and are not wedded to a particular technology. Staff can work anywhere (which comes back to staff wanting work/life balance).

There are a handful of ‘traditional’ firms that have impressed me by having a big client and team base, looking after SMEs and using AdvanceTrack® and other technologies to service a much wider cross- section of clients than they would have in the past – regional practices operating on a national or international level.

Where does AdvanceTrack® fit into all this change?

We have been a tech-first supplier/provider to the profession. We will adopt tech that’s developed by third-parties, or develop our own. Where we have really continued to progress is our need to be efficient, particularly in collecting and processing data efficiently – to help our practice clients deliver an amazing service.

Off the back of MTD and the need to keep clients compliant, we’re able to give scalable bookkeeping solutions to practices and enable them to work with real-time data. This solution feeds into practices’ other advisory- led and insight services.

What do potential clients ask you about AdvanceTrack’s services, and what is your response?

The questions have hardly changed over the years! First, quality – how do you maintain it? How do you keep clients’ data secure?

Our biggest challenge is those in the industry that have offered bad service, which makes it much harder for practices to revisit the option of outsourcing.

Some clients have come to our offices. They want to ensure that if working with a provider, we’d also look after our staff when working on their projects – part of their due diligence is to visit our offices and ask our team members any questions they want.