The future of accountants

and bookkeepers

“Smart machines and artificial intelligence

will compete with human labor for

knowledge work.”

—Dr. James Canton and the Institute for Global Futures, for CPA.com™

Trends impacting accountants today

Digital transformation enabled by new IT

Source: IDC

Cloud Mobility Social business Big data/analytics

First platform

(mainframe)Late 1950s to present

Second platform

(client/server)Mid-1980s to present

Third platform

(social, mobile, cloud, and

analytics, possibly IoT)early 2010s to present

1950s 1980s 2010s

Increased cloud adoption

Mobile, real-time access to practice management and client data

Increased use of social media in B2B marketing

Business insights through data analytics

New business models

Shift from compliance to advisory services

Moving from time-based billing to value-based pricing

Changing workforce demographics

Third

platform

Leveraging the “third platform” and new business models

Software revenue growth rate through 2017

5.5xHigher cloud SWgrowth vs. packaged SW

Key software trends

Customers are purchasing services, not servers, and using SaaS to extend or replace existing applications

Predicted cloud software market

size by 2017$76.1B Cloud software market CAGR

through 201722.1%

More cloud ISVs (CSVs) by 20172.5xNet new software will be built for

cloud delivery in 201591%

10x more discrete “software”

services available in 201710x

22%

4%

0%

5%

10%

15%

20%

25%

Cloud SW Packaged SW

Cloud is at the center of software industry growth

Source: IDC

64% 54% 37% 36%

N=603, Source: IDC Software Channels Survey, Fall 2014

Cloud Mobility Social business Big data/analytics

The shift in practice offerings

Q. Does your practice offer . . .

N=603, Source: IDC Software Channels Survey, Fall 2014

Reasons for offering cloud solutions

59%

36%

35%

31%

26%

23%

18%

To respond to customer demand

To Increase our business growth rate

To improve our profitability

To increase or add recurring revenue

To respond to competition

Because our major software vendor has moved in that direction

To improve company valuation

% of respondents

Customer demand is primary driver of cloud adoption

36%

43%

50%

48%

64%

57%

50%

52%

0% 50% 100%

58%

59%

50%

33%

42%

41%

50%

67%

0% 50% 100%

n = 98

n = 107

n = 95

n = 107

n = 203

n = 78

n = 73

n = 53

1-10 employees

11-49 employees

50-249 employees

250+ employees

Q: Do you currently use cloud-based accounting solutions in your practice?

Region Firm size

Accounting practices are moving to the cloud . . .

but not quickly enough

Source: Impact Research Report, January 2016

Be

bol

d!

Ch

an

ge

is

to

ug

h,

bu

t

yo

u’r

e

to

ug

he

r!

48% 48%

50% 50%

43% 57%

36% 64%

33% 67%

50% 50%

59% 41%

58% 42%

Around 6 in 10 practices offer advisory services across all markets surveyed

6%

4%

6%

4%

59%

64%

65%

63%

36%

32%

29%

33%

0% 20% 40% 60% 80% 100%

Compliance only

Bookkeeping, Payroll, Personal Tax, Other tax

compliance, audits, business tax, financial statement preparation, estate planning,

financial planning

Advisory

Business advisory, consulting services

Bookkeeping services only

Few differences by

cloud/Desktop, or

Sage/Non-Sage/Size of

company

n = 98

n = 107

n = 95

n = 107

Accounting practices: services mix

Source: Impact Research Report, January 2016

63% 33%

65% 29%

64% 32%

59% 36%

4%

6%

4%

6%

Compliance only

Bookkeeping, payroll, personal tax, other

tax compliance, audits, business tax,

financial statement preparation, estate

planning, financial planning

Advisory

Business advisory, consulting services

Bookkeeping services only

Trends impacting accountants

over the next 5+ years

Artificial intelligence

Automated data collection

Machine learning

Automated, continual compliance reporting through direct connections

Always-on accounting

Blockchain and “smart contracts”

Automation—driving efficiency and growth

Leveraging technology, automation, and full integration across practice and

client systems, freeing accountant to deepen relationships and grow business

- Compliance- Additional

services- Analysis- Insights- Advice

Accounting System

Bank import, OCR

scanning

Future: automated-concurrent-continuous

While the focus of the software industry in recent years has been

on cloud computing and security, analytics and digitization are

seen as having the biggest future business impact.

The practice of the future will be shaped by analytics,

digitization, and cloud computing

Source: Deloitte University Press; Reimagining core systems: Modernizing the heart of the business; Feb 24, 2016

Analytics and intelligence

Digital (web, mobile, social)

Cloud computing

Cybersecurity and data privacy

Legacy/core modernization

Emerging technologies

Technology areas Percent of CIOs with high investment

77%

75%

64%

58%

47%

28%

Percentage of CIOs that anticipate

significant business impact

17%

19%

18%

8%

36%

Medium Low

A mobile, social, and collaborative business solution that is the “office of the future”

Accountants and their clients will increasingly need . . .

One real-time source

of information . . .

control their business

from the palm of their

hands.

so they can focus on

developing the business,

look ahead, and . . .

with data processing

automated from front

to back office . . .

Past perspective:

Financial statements, revenue

and cost analysis, tax and

compliance

What happened?

How many?

Current perspective:

Profitability of products,

customers, markets,

spending, operations, working

capital, pricing

Future perspective:

Forecasting, scenario planning,

investments, modeling,

analytics

Why did it happen?

What is being done

about it?

What will happen next?

What if?

Risks and

opportunities?

Practice personas aligned with client needs

Source: IBM Institute for Business Value; The New Value Integrator

Past Future

WHAT

TECHNOLOGY

First- and second-gen platforms:

Mainframes, client-server systems,

desktop software

Third-gen platform: Social,

mobile, cloud, analytics

FOCUSAccounting and bookkeeping;

complianceAdvisory services

WHOCUSTOMER Accounting Financial performance

ALLIANCES Do it ourselves Partner collaboration

HOWSALES MOTION Transactional Ongoing relationship

MARKETING Traditional Digital

-4.8%

CAGR 12.7%

CAGR

2015-2020 growth

Transformation of how accounting will be conducted

Source: IDC, Sage

Integrated

apps and dataCRM

Single view of

client Client

acquisition

and practice

growth

Automated

data collection

and

management

Practice and client management

Accounting practice essentials

Sources: Sage global survey of 407 accountants (Dec 2015) and CPA Practice Advisors Thought Leaders Symposium (Feb 2016)

Next steps

Determine your why

(vision, mission, purpose)

Evaluate the tools in your

toolbox (and whether or not

you’re even using them)

Evaluate all the things in your

business that haven’t changed over

time, and then ask yourself why

Ask your clients, “If I could do

one thing differently to better

meet your expectations next

year, what would it be?”

Determine “first steps”

Find an accountability partner to

encourage you along the way

Differentiate to win

Be bold! Change is tough, but

you’re tougher!

“Adaptability is about the powerful

difference between adapting to cope

and adapting to win.”

—Max McKeown

Global company with over

13,000employees

Revenue of

£1.4bn

Over

3mcustomers

Sage is the market leader for integrated accounting, payroll,

and commerce systems, supporting the ambition of the

world’s entrepreneurs.

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Group plc or its licensors. All other trademarks are the property of their respective owners.

Thank you