The real competitive threat

The other day I read an article in one of the accounting trades that posited an interesting premise; that in the not so very distant future, cloud accounting software applications will perhaps become so turnkey that they would be eventually be able to replace accountants.

Certainly there are a number of user-friendly cloud accounting apps currently, whose use is growing exponentially – i.e. Xero, and FreshBooks to name two, but can one or more automated technologies really usurp the expertise and personal touch of the most trusted advisor?

Despite the inarguable success of QuickBooks for example, it hasn’t made accountants obsolete nor has the portfolio of tax filing products that line the shelves at retailers such as Staples, Office Depot or even Costco. To be sure, the aforementioned did create more DIYers with regard to 1040 preparation, but after either covering or consulting within the accounting profession for the past 15 years, I can safely say, that clients still prefer the handholding that has become embedded as part of the CPA job description.

You could also ask yourself will drones eventually replace UPS or FedEx delivery.

Personally I can’t see it – at least not in the ensuing five years or so. The thought of some multi- propellered craft landing on my doorstep to drop off the newest bestseller or stylish apparel would more than enough to creep me out for days.

No, if accountants really want to see one of their greatest competitive threats (other than CPA firms of course) they need to look no further than their local banks.

To wit – recently I received a flyer in the mail from a branch of a national bank that had just opened in my town. In addition to the perfunctory checking and savings rates and all the promised benefits thereof, it offered financial and tax planning as well as tax preparation and estate and trust administration. For business customers its staff also provided “start-up consulting and advisory services,” and payroll.

Sound familiar?

If I was a practicing CPA and considering the resources that national banking brands have, that would certainly give me more than a little cause for concern. Conversely, banks are inherently run via a layered bureaucracy and I doubt they would be able to replicate that personal touch proffered by an accountant.

And I can say with some certainty that it would certainly be a while before anyone develops an app for that.