Change. Just. Isn't. Slowing. Down.
NEWS ANALYSIS
NEWS ANALYSIS
We’re becoming more likely to pay by phone, rather than cash
Change. Just. Isn’t. Slowing. Down.
Accountants who do the books for the retail or restaurant industries now deal almost exclusively with card-based transactions
Last year, we looked at the major trends transforming accountancy. One year on, what’s changed? WORDS Nick Levine
I
n 2015, we identified various forces that were about to transform the life and work of every finance professional. A year on, take-up of cloud software has skyrocketed, and the transparency agenda has been electrified by the release of the Panama Papers. Time for a catch-up.
IKON IMAGES
1
Transparency
What we said in 2015: “The public will demand more honesty and openness from companies.” The publication of the ‘Panama Papers’ in April exposed to public scrutiny 11.5 million documents about 214,488 offshore companies. Leaked from the prominent offshore legal firm Mossack Fonseca, the data includes confidential information on high-profile politicians, business people and celebrities. The Panama Papers reveal how these individuals exploit secretive offshore tax regimes. The fallout from the leak forced Icelandic prime minister Sigmundur Davio Gunnlaugsson to resign. In the UK, it resulted in the publication of former prime minister David Cameron’s tax returns. While the use of offshore tax havens is still legal, well-known individuals may in future be cautious about using
BACK TO THE FUTURE
ACCOUNTING TECHNICIAN
SEPT/OCT 2015 AAT.ORG.UK £5.40
OUTSOURCED FINANCE FUNCTIONS
NO BARRIERS TO PAYMENT
UBIQUITOUS ACCOUNTING DATA
BIG IDEAS
APPS THAT TALK TO EACH OTHER
THE 'ANYWHERE OFFICE'
FUNDING PLATFORMS UNLEASHING LIQUIDITY
MILLIONS OF NEW START-UPS
ULTRA-ACCURATE CUSTOMER INSIGHT
EXPERTISE MARKETING
PUBLIC DUE DILIGENCE
REAL-TIME TRANSACTION STREAMING
THAT ARE CHANGING YOUR JOB FOREVER
001_AAT46_Cover_FINAL.indd 1
12
ACCOUNTANTS AS BRANDS
28/08/2015 09:54
Dig out your September/October 2015 issue to read about the 12 trends changing your job forever. Or use the Accounting Technician app, available at: bit.ly/atmagapp
Attempts at secrecy may be increasingly futile in the age of the data leak
them due to the possible negative consequences for their reputation. In this climate of greater transparency, Czech bank Fio has created a pioneering ‘transparent’ bank account, open to anyone who wishes to view transactions at any time. “The product is intended to support non-profits and civic associations, foundations, funds, political parties, and so on, to help strengthen the trustworthiness of their handling of funds and to allow anyone to review a history of financial transactions anywhere,” says the bank. It’s easy to see the potential application among, say, publicservice organisations.
2
“Whereas 12 months ago the cloud was generally accepted as the way software was heading, today there is a much greater sense of urgency and desire to embrace cloud software,” says Xero’s UK managing director, Gary Turner. HMRC’s move towards digital taxation has been a big factor; many UK accounting firms are turning to cloud-based options to help ease the transition for clients. Software companies have also developed new features. Sage One users have seen the introduction of DueCourse, a module that provides an invoice-factoring service to help businesses ease their cash flow. Xero, meanwhile, has introduced a two-step authentication system in a bid to ramp up security.
Online and mobile payments
What we said in 2015: “Disruptors in this field are making contactless tech a no-brainer for small businesses.” Like Sweden, the UK is moving rapidly towards being a cashless society, with consumers spending £1.5bn on contactless cards in March 2016, a 250% increase year on year. And, since Apple Pay launched in the UK, it has been supported by over 250,000 shops. The mobile-payment service can also now be used on London’s Tube and bus networks. What does this mean for you? An easier life. Having to do reconciliations with cash is messy. Accountants who do the books for the retail or restaurant industries now deal almost exclusively with card-based transactions.
4
Working in the cloud is becoming standard practice for accountants
Crowdfunding
What we said in 2015: “SMEs are clamouring for democratic equity.” In the 2015-16 tax year, the UK government introduced the Innovative Finance ISA (IFISA). This allows savers to invest their annual ISA allowance in qualifying peer-to-peer (P2P) lending platforms. The IFISA is likely to lead to increased adoption of P2P finance, due to IFISA providers allowing savers to grow their funds tax-free and enjoy gross returns of up to 6%. Not all news in the alternative sector has been positive. Rebus, which raised more than £800,000 on the crowdfunding platform Crowdcube, went into administration earlier in the year. And FundingKnight, a leading P2P lender that had funded more than £30m in loans, became insolvent in June. The company has been able to continue trading due to a fresh injection of funds from GLI Finance, which now fully owns FundingKnight.
5
Cloud accounting
What we said in 2015: “Use of cloud software is increasing exponentially, moving accountants onto value-adding tasks.” Use of cloud accounting software continues to accelerate. In fact, it’s close to being the norm.
3
Automation
What we said in 2015: “Automation is changing accountancy more rapidly than any other trend.” Receipt Bank and SAP’s Concur are increasingly becoming the preferred solutions for the automation and coding of receipts. The mass adoption of such software is revolutionising accounting. While cloud accounting providers import bank-feed data, receiptscanning tools import expense data and purchase invoices. These can be easily matched up to the corresponding cash transaction in cloud accounting software packages. Receipt Bank now has official integrations with FreeAgent, Crunch, Xero, QuickBooks, Sage and FreshBooks.
SMACC, a relatively new entrant to the cloud accounting sector, offers a proprietary feature that allows for the scanning and automation of receipts, alongside other processes, within the main accounting software itself. The company, which uses machine-learning and artificialintelligence technology, may well offer the most advanced technological solution around. Founder Uli Erxleben told TechCrunch recently: “Now you have all you need for liquidity planning and revenue/expense reports, close to real time in the tool, without the need to input data yourself or wait for your accountant to do it for you at month end.”
6
Big data
What we said in 2015: “Big data will turn us all into analysts.” In June 2016, ICAEW’s new president, Hilary Lindsay, said the accounting industry had to “respond to the growing trend of big data”. Unfortunately, compared to its overseas counterparts, UK business has been sluggish in doing so. A recent PwC survey found only 30% of UK executives would describe their firm as highly data-driven, compared to 45% in America and 53% in China. The need to plug this skills gap has been highlighted by Sanjay Brahmawar, global head and managing partner, strategic business development, at IBM Watson Internet of Things. At the World Manufacturing Forum 2016, he said: “Getting the skills required to analyse and manage all of this data is going to be difficult.” Much work to do, folks.
FIND OUT MORE Keep up with all the latest trends affecting accountants by visiting: aatcomment.org.uk 13
NEWS ANALYSIS
We’re becoming more likely to pay by phone, rather than cash
Change. Just. Isn’t. Slowing. Down.
Accountants who do the books for the retail or restaurant industries now deal almost exclusively with card-based transactions
Last year, we looked at the major trends transforming accountancy. One year on, what’s changed? WORDS Nick Levine
I
n 2015, we identified various forces that were about to transform the life and work of every finance professional. A year on, take-up of cloud software has skyrocketed, and the transparency agenda has been electrified by the release of the Panama Papers. Time for a catch-up.
IKON IMAGES
1
Transparency
What we said in 2015: “The public will demand more honesty and openness from companies.” The publication of the ‘Panama Papers’ in April exposed to public scrutiny 11.5 million documents about 214,488 offshore companies. Leaked from the prominent offshore legal firm Mossack Fonseca, the data includes confidential information on high-profile politicians, business people and celebrities. The Panama Papers reveal how these individuals exploit secretive offshore tax regimes. The fallout from the leak forced Icelandic prime minister Sigmundur Davio Gunnlaugsson to resign. In the UK, it resulted in the publication of former prime minister David Cameron’s tax returns. While the use of offshore tax havens is still legal, well-known individuals may in future be cautious about using
BACK TO THE FUTURE
ACCOUNTING TECHNICIAN
SEPT/OCT 2015 AAT.ORG.UK £5.40
OUTSOURCED FINANCE FUNCTIONS
NO BARRIERS TO PAYMENT
UBIQUITOUS ACCOUNTING DATA
BIG IDEAS
APPS THAT TALK TO EACH OTHER
THE 'ANYWHERE OFFICE'
FUNDING PLATFORMS UNLEASHING LIQUIDITY
MILLIONS OF NEW START-UPS
ULTRA-ACCURATE CUSTOMER INSIGHT
EXPERTISE MARKETING
PUBLIC DUE DILIGENCE
REAL-TIME TRANSACTION STREAMING
THAT ARE CHANGING YOUR JOB FOREVER
001_AAT46_Cover_FINAL.indd 1
12
ACCOUNTANTS AS BRANDS
28/08/2015 09:54
Dig out your September/October 2015 issue to read about the 12 trends changing your job forever. Or use the Accounting Technician app, available at: bit.ly/atmagapp
Attempts at secrecy may be increasingly futile in the age of the data leak
them due to the possible negative consequences for their reputation. In this climate of greater transparency, Czech bank Fio has created a pioneering ‘transparent’ bank account, open to anyone who wishes to view transactions at any time. “The product is intended to support non-profits and civic associations, foundations, funds, political parties, and so on, to help strengthen the trustworthiness of their handling of funds and to allow anyone to review a history of financial transactions anywhere,” says the bank. It’s easy to see the potential application among, say, publicservice organisations.
2
“Whereas 12 months ago the cloud was generally accepted as the way software was heading, today there is a much greater sense of urgency and desire to embrace cloud software,” says Xero’s UK managing director, Gary Turner. HMRC’s move towards digital taxation has been a big factor; many UK accounting firms are turning to cloud-based options to help ease the transition for clients. Software companies have also developed new features. Sage One users have seen the introduction of DueCourse, a module that provides an invoice-factoring service to help businesses ease their cash flow. Xero, meanwhile, has introduced a two-step authentication system in a bid to ramp up security.
Online and mobile payments
What we said in 2015: “Disruptors in this field are making contactless tech a no-brainer for small businesses.” Like Sweden, the UK is moving rapidly towards being a cashless society, with consumers spending £1.5bn on contactless cards in March 2016, a 250% increase year on year. And, since Apple Pay launched in the UK, it has been supported by over 250,000 shops. The mobile-payment service can also now be used on London’s Tube and bus networks. What does this mean for you? An easier life. Having to do reconciliations with cash is messy. Accountants who do the books for the retail or restaurant industries now deal almost exclusively with card-based transactions.
4
Working in the cloud is becoming standard practice for accountants
Crowdfunding
What we said in 2015: “SMEs are clamouring for democratic equity.” In the 2015-16 tax year, the UK government introduced the Innovative Finance ISA (IFISA). This allows savers to invest their annual ISA allowance in qualifying peer-to-peer (P2P) lending platforms. The IFISA is likely to lead to increased adoption of P2P finance, due to IFISA providers allowing savers to grow their funds tax-free and enjoy gross returns of up to 6%. Not all news in the alternative sector has been positive. Rebus, which raised more than £800,000 on the crowdfunding platform Crowdcube, went into administration earlier in the year. And FundingKnight, a leading P2P lender that had funded more than £30m in loans, became insolvent in June. The company has been able to continue trading due to a fresh injection of funds from GLI Finance, which now fully owns FundingKnight.
5
Cloud accounting
What we said in 2015: “Use of cloud software is increasing exponentially, moving accountants onto value-adding tasks.” Use of cloud accounting software continues to accelerate. In fact, it’s close to being the norm.
3
Automation
What we said in 2015: “Automation is changing accountancy more rapidly than any other trend.” Receipt Bank and SAP’s Concur are increasingly becoming the preferred solutions for the automation and coding of receipts. The mass adoption of such software is revolutionising accounting. While cloud accounting providers import bank-feed data, receiptscanning tools import expense data and purchase invoices. These can be easily matched up to the corresponding cash transaction in cloud accounting software packages. Receipt Bank now has official integrations with FreeAgent, Crunch, Xero, QuickBooks, Sage and FreshBooks.
SMACC, a relatively new entrant to the cloud accounting sector, offers a proprietary feature that allows for the scanning and automation of receipts, alongside other processes, within the main accounting software itself. The company, which uses machine-learning and artificialintelligence technology, may well offer the most advanced technological solution around. Founder Uli Erxleben told TechCrunch recently: “Now you have all you need for liquidity planning and revenue/expense reports, close to real time in the tool, without the need to input data yourself or wait for your accountant to do it for you at month end.”
6
Big data
What we said in 2015: “Big data will turn us all into analysts.” In June 2016, ICAEW’s new president, Hilary Lindsay, said the accounting industry had to “respond to the growing trend of big data”. Unfortunately, compared to its overseas counterparts, UK business has been sluggish in doing so. A recent PwC survey found only 30% of UK executives would describe their firm as highly data-driven, compared to 45% in America and 53% in China. The need to plug this skills gap has been highlighted by Sanjay Brahmawar, global head and managing partner, strategic business development, at IBM Watson Internet of Things. At the World Manufacturing Forum 2016, he said: “Getting the skills required to analyse and manage all of this data is going to be difficult.” Much work to do, folks.
FIND OUT MORE Keep up with all the latest trends affecting accountants by visiting: aatcomment.org.uk 13
