Opinion: Why a 60% drop in compliance fees could be good for accountants
Clients want commercial advantage.
Will we really see a 60 percent collapse in the cost of compliance? In yesterday’s article CCH iFirm CEO Mike Chisholm predicted as much due to efficiencies in cloud accounting software which slash the time to prepare a BAS or annual returns.
Even allowing for the usual caveats – every business’ tax affairs have different levels of complexity and cost – there’s a growing feeling among accountants that tax compliance is on the verge of being heavily commoditised. Maybe a 60 percent drop in fees is a little high, but the time savings through online software are at least that much.
That would be fantastic news for business owners as it lubricates one of the more painful friction points in their business. There’s no commercial advantage in compiling annual returns.
And is this work that accountants really want to do?
While losing a large revenue stream is a disturbing thought, the long-term outcome could be extremely positive for accountants. It will force them to focus on providing services that do offer commercial advantage which ultimately make their clients much happier.
There are some parallels with newspaper journalism. The Sydney Morning Herald, Daily Telegraph and others made their millions from the “rivers of gold” classified advertising which was savaged by a host of niche e-commerce sites.
The devastating impact on publishers’ revenues is forcing journalists out of their ivory towers and to engage more directly with their readers through online videos and social media. It also opened up the market for small players such as Crikey and the Eureka Report, which exist mainly from the subscriptions paid by readers.
In theory publishing (and democracy!) would be better off if journalists were rewarded directly by subscription-paying readers as it reduces editorial conflict with advertisers. Fingers crossed – it’s too soon to tell.
Likewise, accountants can provide fantastic insights beyond the compliance picture with tools such as Fathom and Spotlight Reporting. Would a business owner be happier with their quarterly BAS or advice, backed by numbers, on which products to promote in the Christmas shopping season?
No-one wants to see their income reduced by 60 percent. But maybe this is the tough medicine that will make accountants stronger – and, ultimately, happier.
Do you agree? What services would you add?