How Do You Change an Industry?

July 22, 2022
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NGMI

Have you ever met with your CPA and felt confused? Maybe you've worked with a bookkeeper and just felt like you had no idea what they were saying. Perhaps you've talked to a financial professional and felt frustrated because they simply weren't helpful.

There's a lot of frustration surrounding the accounting industry and most of it (rightfully) comes from clients!

What accountants do is literally a punchline in our favorite television shows; it's a true mystery to the public because of the complexity of the services that we offer. Many people recognize that they need an accountant, but they're just not sure why.

How do you go about changing an industry that seems to be stuck in the past?

First, we need to understand why the industry is the way it is. Then, a lot of professionals have to actively choose to shift the way their businesses are run. Finally, the perception of the rest of the world can change. In short, you'll need better software, unified professional standards, and a whole lot of marketing.

How does software help outdated industries?

In the last 30 years, software has quite literally taken over the world. The United States tech industry alone had an estimated market value of $1.6 trillion dollars in 2021 and employed almost 12.2 million workers in 2020 according to Zippia. Technology has monumentally shifted our lives; enabling us to be more efficient and effective in our jobs, revolutionizing entertainment, and creating new methods of communication that were previously just science fiction.

While major financial sectors like banking, tax, and bookkeeping have seen incredible advances in technology, it still sometimes feels like many of these monoliths are stuck in the stone age when it comes to their customer experience.

Part of this is due to constantly evolving legal changes in things like the tax code that simply complicate the work that CPAs and tax professionals do. An incredible benefit of technology is that it's able to adapt so quickly to the changing requirements of any industry. Technology helps accountants and bookkeepers be far more efficient, precise, and effective at what they do. Yet, there's a lack of excellent client-facing software that helps to streamline a customer's experience with their accounting professional.

We're left with disjointed communication, scattered data, and information that's simply incomplete.

Accountants Aren't Created Equal

There are so many facets to accounting. From tax professionals who help you file returns at the end of the year to public accountants that tackle the auditing of massive companies like Apple to small bookkeepers that help you understand your business better, there's a lot of opportunity in accounting.

With that being said, every company is different from the next.

All accountants have different processes, different interpretations of the tax code, and even different ways of setting up the books! In the accounting industry, there are Generally Accepted Accounting Principles - also known as GAAP - that set the standard for things like concepts, definitions, and accounting rules. However, GAAP is only required for publicly traded companies. Private companies, like most small businesses, are not required to adhere to GAAP.

For this reason, private companies have much more flexibility when it comes to the structuring of their financial statements, as they need only comply with the tax code. This lack of a required accounting structure isn't necessarily a bad thing, though. For entrepreneurs, it means that there are a lot fewer hurdles when starting a business!

This leads to a divided experience when it comes to finding an accountant. Because financial professionals vary in their processes, interpretations, and foundations of accounting, it's difficult to know what to expect when you seek out help as a customer!

The Perspective Shift

Accounting and bookkeeping are viewed as a necessary evil by most people. In reality, when done right, these services create a deeper understanding of your business and enable better decision-making! Excellent bookkeeping allows business owners to go from being confused and uncertain about the condition of their company to finding clarity and confidence in what they're doing.

It's this kind of shift - one where accounting professionals are viewed as solutions rather than problems - that can inspire a lot of change in an industry. It's about communicating the true value of what a deeper understanding can bring!

At their best, technology-enabled accountants and bookkeepers can bring about incredible change in the lives of small business owners. As more and more software comes along that helps us serve clients better, more training becomes available for professional development, and a clearer message is communicated about the problems we can solve, the financial services industry can and will change for the better.

Jeremy Millar
Written by:
Jeremy Millar

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