So it's about analysing data and then providing strategic advice, coaching and mentoring. But do the accountants of today possess this skill set?

“It’s not rocket science, it’s really just asking the questions and analysing the data in the context of business success,” Mr Vamos said.

“It’s saying, ‘OK, why do you have so much stock?’, or ‘why aren’t you collecting faster?’, or ‘I have another client over here in a similar business that is doing it with a lot less stock than you are’. Or ‘you’re spending a hell of a lot of money on contractors, you’d probably be smarter to employ a couple of permanent staff to do that’.”

People who don’t change are going to be more at risk from change than those who embrace it. — Steve Vamos, Xero CEO

He said big business commonly employed strategic advisers or coaches, and small businesses were missing out.

“At Xero we’ve got a CFO who asks why we’re spending so much money there, how come we’re spending more money here than there. It’s that capability that I’ve got access to. I think if every small business had that opportunity, they would perform better, they would succeed,” he said.

“So we see that as a real opportunity for us to encourage our partners to move into that space.”

Xero itself would have to evolve in response to this change, creating tools that help bridge the gap between accountancy and strategic advice.


“You can start to develop applications that analyse the data and start to compare or suggest actions that might make a difference. So this notion of data, workflows and insights is really core to how we’re looking at product development and innovation as we go forward,” Mr Vamos said.

Gary Turner, Xero’s managing director in Britain, said automation would present an opportunity for accountants sequestered in the big firms to strike out on their own.

Proliferation of small firms

“Technology is lowering the barriers to entry. There are great examples of people who were inside large accounting firms, and technology enabled them to leave and set up their own smaller accounting firms,” he said.

“Rather than fewer accounting firms, there may be a significant number of smaller accounting firms. It won’t be monopolised by large firms, it’ll be hundreds of thousands of firms that couldn’t have existed without technology enabling them. There are lots of two-, three-, five-, 10-person accounting firms existing today that wouldn’t have existed 10 years ago.”

There might be more small firms, but will there be as many accountants in 10 years?

Evolution is a dynamic, not a straight line, Mr Vamos said.


“You go back, how many people have got personal trainers today, how many personal trainers were there 30, 40 years ago? I mean it was Olivia Newton-John doing Physical on a video. There were no gyms – look at all the gyms now. It goes on, how many blokes do you know who get facials and massages, all these services industries are booming at the same time as other activities are no longer relevant,” he said.

“So I think there will be more people involved in helping small businesses succeed in their performance and their development in the future than there are today. And I guess what I believe is that there is no question that people who don’t change are going to be more at risk from change than those who embrace it.”

Mr Turner said accountants should be excited and relaxed, not fearful, about the change.

“Accountants are much more pragmatic, they would actually rather not have to spend a third of their time on manual and repetitive tasks because it’s not high value, it’s not what you trained and qualified as an accountant to do, and it’s actually time that you could be spending helping your clients or driving more value for your business,” he said.

“I think most accountants, even the ones that are fearful of this, are accepting of the fact that it’s ultimately a legitimate and good thing to happen. [Many] are running in the direction of automation, not away from it.”