With the increasing market competition, businesses are constantly trying to grow. Innovation and new technologies can be their pathway to this growth. Read on!
Different professions perceive innovation differently. When it comes to accounting firms, it is believed that the accounting profession’s innovation originates majorly from the technology companies providing accounting and related software.
According to a survey conducted by Robert Half Management Resources, 41% of CFOs cited technology as a major source of stress in their jobs, saying that innovations in accounting are progressing so rapidly that it’s difficult to keep up.
But just technology cannot be defined as innovation. Innovation can be defined at your own firm as:
- Your firm is undergoing a continuous transformation.
- There is a constant increase in the capability of your firm to deliver services to your clients.
- Your firm is regularly transforming its management practices and operations.
How firms of any size can innovate?
An innovative approach can be adopted by any firm, irrespective of its size. Mostly the accounting professionals have a forward-thinking approach and strive to provide services that their customers value for years to come. It is overall another concern to figure out ways to achieve that without having to adopt overly risky or time-consuming methods.
Any firm cannot overhaul itself overnight and nor can it throw all its resources for innovating its services and operations. Your firm’s approach to innovation will mainly depend on the size and resources of your firm as innovation can be for every firm, but there is no one-size-fits-all approach to it.
- Innovation on a smaller scale
Investigating the services that you provide and how you provide them is one of the most fruitful ways to pursue innovation. There are a lot of software solutions available in the market and you can choose the one that brings efficiency to your business processes.
Once you start achieving what you are already doing faster and with more efficiency, you can think about additional services to provide. For example, the less time you spend on data entry processes, the more time you can spend providing essential advisory services to your customers. You need to think about innovations that can work today, which may be different from innovations that might work years down the road.
One of the effective ways to find the same can be to look at the software that your competition companies are using. Take part in networking groups with firms of similar sizes, get involved in online forums to ask questions, and attend conferences.
If you own a medium-sized firm, you can focus small teams on researching the viability of innovative options for your practice. Hiring third-party consultants that can focus on Machine Learning(ML), Artificial Intelligence(AI), and Blockchain technology can also help lead your way to success. Irrespective of the size of your business, testing the new innovations internally with your own transactions and books is a great way to learn.
- The mindset of innovation
By approaching innovation with a willingness to adapt and an open mind, firms of all sizes and types can benefit immensely. With the increasing market competition, it is very hard for businesses to grow and flourish by relying on outdated service offerings and technology, as clients have more options available now than ever.
Innovation might have a different outlook in different areas of your profession, but every business needs to innovate constantly. Adequate measures in this direction can separate you from the crowd and lay out a path for continued success.
Accounting Technology Innovations
- Cloud-Based Accounting – No other technology has had as much impact as the cloud on accounting in the 21st century. Cloud applications have the ability to handle everything from payroll and invoicing to taxes and benefits, automation being the biggest advantage of cloud-based accounting.
- Real-Time Reporting – With the improvements in AI technology, accounting has realized the importance of real-time reporting and the effect it has on gauging the financial health of a business. Now, the delay between the occurrence of an accounting event and when it is recorded, has significantly been eradicated.
- Mobile Accounting – Mobile accounting has eliminated the need for accountants to be metaphorically chained to their desks for their work. Accounting firms can now add receipts, reconcile accounts, create expensive claims, or send invoices all from a smartphone, laptop, or tablet.
- Optical Character Recognition – OCR technology has greatly helped the accounting industry. “Advances in this technology allow companies to use scanners or even the cameras on mobile devices to capture printed financial information such as receipts and invoices and translate the text into digital files,” accountant Bill Gerber explains. “Improved accuracy has cut down on the rate of error during this translation, and future updates promise to improve the procedure’s efficiency further.”
- Customer Relationship Management Software – CRM systems have become essential for accounting firms to meet market competition and expectations. The combination of these systems with AI and automated solutions helps the firms in customer engagement and automating mundane tasks.
How accounting firms can innovate successfully?
As discussed, innovation is crucial for accounting firms and here are few pathways that these firms can adopt to innovate successfully.
- Identify your buyer group and persona – A buyer group refers to a general category, like manufacturers or physicians. Within that group, it is required to search for a persona, which is a vivid profile of your anticipated user. An example of a persona is ‘members of a medical practice with 5 or fewer physicians’. Being specific is the key.
- Understand the market – Get a thorough understanding of the market, and learn why does the marketplace want what you have to sell? Your execution must be grounded on market research. Talk to everyone you can – prospects, clients, and industry leaders – to know about their requirements and pain points. It is important to think like a client and look at the market outside in, and not inside out.
- Use conceptual designs – For translating an idea into a service or product, conceptual designs should be used to assist the client. It can be said as a straightforward and simple picture of innovation concept. For example, growth can be shown as a three-legged stool where growth is the seat supported by functional areas of marketing, product management, and sales.
- Analyze market position – Access your market position by determining competitive offerings and your market differentiators. Interviewing your competitors can be one of the most reliable resources. Only with the in-depth analysis of the competition, you will be able to provide something that is absolutely compelling in the market.
- Give a name to your innovation – Provide an attractive, distinctive, and memorable name to your innovation strategy. Choose a name that throws light on the purpose and value of your offerings. Be creative with your thoughts, for example, instead of going for ‘accounting outsourcing,’ you can accommodate something more appealing like ‘concierge accounting.’
As discussed earlier, innovation does not work with the concept of one-size-fits-all, and hence, it should be structured according to your own business strategies and requirements. Implement new technologies and let yourself be creative with new ideas for innovation over the marketplace.