Change is coming to public accounting, and firms that fail to adapt will be hard-pressed to keep up with the competition.
That's the view expressed by executives from five prolific producers of accounting software. The executives, responding by email to questions from the JofA, articulated remarkably similar visions for how technological, demographic, and market forces will reshape the landscape for accounting firms. Across the board, in separately submitted answers, executives from Wolters Kluwer, Intuit, Sage, Thomson Reuters, and Xero agreed on the following:
* Competitors from outside the CPA profession--and outside the United States--will emerge to test CPA firms in the coming years.
* Younger entrepreneurs and other CPA firm clients, especially those from the Millennial generation, will expect high-touch, high-tech relationships with their accountants. Firms that offer only compliance services will be left at a competitive disadvantage.
* Value pricing will emerge as a key component of accounting firm business models, because hourly billing discourages the frequent communication and collaboration that will characterize the new firm-client dynamic.
The software executives'vision of the future aligns with the findings of a study conducted for AICPA subsidiary CPA.com by futurist James Canton and the Institute for Global Futures. That study found that 80% of CPAs believe their role will change significantly by 2025, with consulting, risk management, and advisory services playing a larger role in their businesses.
Why should CPA firms care what software vendors think? The JofA approached the software executives because a significant part of their job is to anticipate the direction that the market and their customers' businesses will take. Vendors that fail to meet accounting firm needs in product development will lose business in that space. The JofA was curious to see how the vendors' visions of the future compare to one another's and to those of others in the profession and beyond.
COMPETITION AND THREATS
The software executives see accounting firms being tested by a number of outside competitors in the next few years.
Automation and do-it-yourself technologies could convince some business owners that they can substitute software for an accountant and be self--sufficient, said Jennifer Warawa, vice president and general manager of Sage Accountant Solutions for Sage North America. "They may come to an incorrect conclusion that they don't...