Iris-Ebook-firm-of-2025-V2

What does the

accountancy

firm of 2025

look like?

IRIS. Look forward

1.0 Introduction But first, a quick look at UK

accountancy firms today

There’s been a huge amount

of change happening in the

accounting industry for years

now – and advancing technology

is either responsible for, or is

powering, that shifting scene.

The COVID-19 pandemic prompted

a huge surge in businesses starting

to adopt digital technology – for

most, it was a case of necessity.

The accountancy sector

was no different.

While many accountant practices are starting to

embrace a digital way of working, many are not,

relying instead on processes that are manual, timeconsuming

and error-prone. And it’s unlikely these

practices will survive, let alone thrive, for much longer.

Looking at the numbers, while the small number of

accountancy firms that are ‘truly digital’ has increased

slightly since the pandemic, it’s the number of ‘digitally

aware’ firms that has seen a massive leap.

In this eBook, we take a look forward to the near

future, to 2025, at how digital technology will continue

to revolutionise the accounting profession – and how

you can future proof your business to ride the digital

wave, stay competitive and, most importantly,

keep your clients happy.

2 Call 0344 225 1525 Visit iris.co.uk Email sales@iris.co.uk

Call 0344 225 1525 Visit iris.co.uk Email sales@iris.co.uk

3

Digital Firms in the UK; Pre-COVID-19

Estimated that there are less than 2,000 digital accountancy firms

From 22.5% pre-pandemic, to a huge 70%, who have

since introduced some digital components into their

business (eg, remote working or SaaS applications).

However, that still leaves roughly 25% of the market

<2.5%

Truly

Digital

Firms

~22.5% Digitally

Aware

~75% Still Unaware

who are digitally unaware, still living and breathing

on the desktop, with limited interactions online, and

limited interactions with their clients digitally. And,

sadly, these are the ones that will be struggling or,

potentially, have already gone out of business because

34+.5

they weren’t able to digitise their business in the event

of the pandemic.

But, while COVID-19 may have forced everyone’s hand

to act quickly, it isn’t the only reason why a digital way

of working will become necessary to survive.

2.5%

Innovators

13.5%

Early Adopters

34.5%

Early Majority

34.5%

Late Majority

15%

Laggards

<5%

Truly

Digital

Firms

Digital Firms in the UK; IMPACT OF COVID-19

You have to be digital to thrive in the new normal

~70% Digitally Awake

~25%

Still

Unaware

or out of

business

2.5%

Innovators

13.5%

Early Adopters

34.5%

Early Majority

34.5%

Late Majority

15%

Laggards



5

Why accountancy firms need to

re-engineer for the digital age –

a quick dip into the near future

The landscape

for accountancy

is changing

dramatically – and

there’s a common

thread of technology

running through all of

these changes on the

horizon.

Client needs are changing –

compliance versus advisory and other

value added services

The accounting world is being majorly disrupted

by Cloud software that enables clients to do their

own compliance work, previously the core of many

accounting practices.

Modern business owners also want, and expect, a

more collaborative service, bringing advice and insight

to the client/accountant relationship.

Cash flow management

What clients typically

need around them

day to day

Business coaching and mentoring

Start up advice

Growth funding services

Clients

Strategic financial advice

Paperless

Anytime, anywhere service

Intelligent insight from their data



7

The competition

is adapting and

accelerating

> As more and more businesses go digital, it breaks

down international client barriers, But, of course,

it works both ways – allowing accounting firms to

come in from outside the UK as well.

> Practice mergers have been accelerated by

COVID-19. Firms that are struggling to go digital

are selling their client lists, or merging with

another firm, to ultimately become a stronger

combined firm, to weather the storm.

Making Tax

Digital (MTD) is

forcing change

The rollout of MTD is perhaps the biggest incentive

to embrace digitisation in the accounting profession.

The government claims the initiative, designed to

help businesses declare their tax to HMRC digitally,

will ‘become one of the most digitally advanced tax

administrations in the world’. And, while delayed for a

year due to the Covid-19 pandemic, it is still very much

a government priority.

> Well-established, but traditional accounting

firms are handing the reins to the younger

partners, to the millennials, to generation Z –

ie, the digital natives.

> Clients are going through the same generational

change, using more technology than ever, doing

things themselves through apps, so that they can

be in control of their data.

Ultimately, HMRC’s goal is to get tax all in one place, to

get to real time reporting, with e-invoicing, so as soon

as a transaction happens, they’ll be able to calculate

the tax that’s due on it.

Digitisation unlocks that allimportant

data

Once you start to get things off

paper, off the desktop and into the

Cloud, you get a huge amount of

Will we end up with Uber for

accountants?

powerful data, centralised and at your

fingertips. And data sits at the heart of

Where a user can go into an app,

say ‘I want a tax return done’, and

accountants from across the UK,

or even the globe, will compete for

their business?

your digital future. It can be used by

software tools for intelligent reporting

and decision making, automation, and

AI and machine learning. It has the

potential to do so much for you – and

your clients – around the clock.



9

The technology

that will power

the future of

accounting – our

predictions for the

firm of 2025

The heterogenous stack

– connect to any system,

anywhere, at any time

> Cloud computing enables all

applications to connect seamlessly

> Data is updated automatically –

and bi-directionally

> Phones and tablets will be the most

common way to access software

> Access is 24/7, from anywhere

With Cloud computing at its heart, the heterogenous

stack allows applications to securely work together,

seamlessly. Data can be updated in either direction, is

available 24/7 and is available from any device. Devices

are getting smarter too – competing with your computer.

Your clients will start to use these and realise they can

do more – and you will want to do the same.



11

Virtual

worker bots

Voice controlled,

connected devices

> Machine learning powers a

virtual workforce

> All first line customer

interactions (email, chat,

messaging, phone) carried out

by these worker bots

Machine learning and AI will power

voice-controlled access to software and

> Allow real time Q&A style

business reporting

> Automatic follow-on queries

and commands

> Use voice recognition for secure

access and permissions

The reason devices will become more powerful, is

because they’re being underpinned by machine

learning – algorithms that automate outcomes. We’re

already seeing it in the systems we use today, website

chat bots, for example – 8 times out of 10 that’s a piece

of machine learning in the background, talking to you

based upon a series of algorithms.

Virtual staff, powered by machine learning, could be

your first line of communication, reducing the onus on

your staff to answer straightforward questions, whether

via email, forms on a website, or telephone calls.

Devices such as Amazon’s Alexa will become

commonplace in the business – especially in

light of a potential ‘no touch’ policy as part

COVID. Voice control seems the obvious

solution – and it’s all powered through

machine learning and AI.

It removes the need of access for the

software, you can ask ‘what is the current

number of outstanding tax returns?’; ‘What’s

our pipeline look like for new services for

the next three months’ and, in real time, it

will extrapolate that data from the different

systems that you use and pull it together

and give you an answer in plain English. It will

recognise your voice compared to somebody

else’s and know what security permissions

you have. You could then ask it to send that

report to me or to a client.

So, suddenly, these connected devices,

through the Internet of Things,

powered by AI and machine learning,

to enable much more of a no touch

environment.



13

An AI-powered

back office

Blockchain

> AI will simplify all of the volume

and process tasks

> All manual processes on older systems

can also be carried out by ‘virtual staff’

> AI will complete all finance processes –

staff will only need to review

> Analysis and reporting will be

completed by virtual assistants

Blockchain is the ultimate end

piece – where all the technology

is heading. The simplest way to

think of blockchain is a new way

of technology, linking everything

together, so that all data is held into

a chain and can be automated and

actions taken off the back of it.

AI will become the power in your back office.

You’ll get rid of all of your manual processes,

because they will all be done by virtual bots.

You’ll also get all of the analysis and reporting

done for you, so you can get on to the really

important information for your clients. Rather

than just telling them their profit for the

year, you’ll be able to give some educated

information, as to what that means and

why that’s so important for them.

And, because your staff will only

have to be reviewing the financial

processes and tasks, rather than

doing them, they will have

more time for client contact

– building

For example, when a client of yours sells goods, the

blockchain will go and automatically update their

purchase orders so that they can go and get new stock,

and work out the logistics automatically to ship the item

for them. It will also update your financial records. And,

at the same time, tell HMRC about all of the information

that’s gone through so they can do the tax calculation.

Suddenly, it all becomes automated.

And, while this technology isn’t proven yet – and, even

then, it’ll be a number of years before it becomes

mainstream – it’s certainly something we should be

thinking about today.



15

Conclusion

Do you have a complete

practice solution?

Where does this

ultimately lead us?

This is what IRIS provides:

Hosted website

AML

Single database

Payroll bureau

Tax & accounts

It leads us to an accountancy

industry that is completely

Prospecting & Onboarding

underpinned by the latest

technology – and you will need

to be willing and ready to evolve

along with that technology to

thrive. In short, you need to

become a digital firm to succeed in

the long term.

Prospects

Payroll

Invoice & receipt app

HR

Online bookkeeping

Process Automation

Security, Governance & Compliance (HR & payroll)

Client Advisory Services

Clients

Client Engagement

Practice Management, Workflow & Automation

Client Services

Client Compliance Services

Government

Practice management

Online payments

Outsourcing

Client portal

Hosted desktop

OpenSpace

Import digital records Document storage Time & fees

Plan your digital roadmap to

2025 now with the help of IRIS.

Call us 0344 225 1525.



17

IRIS Software Group

Heathrow Approach

470 London Road

Slough

Berkshire

SL3 8QY

0344 815 5656

sales@iris.co.uk

iris.co.uk

© IRIS Software Group Ltd 10/2020

All rights reserved.


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