We have been amused over the past few years at the growth of the talk around the death of compliance accounting. The anti-compliance proponents will tell you that Xero and MYOB will soon mean that businesses don’t need accountants, or that the IRD will effectively do your compliance for you. Neither of these is true.
While online accounting packages can certainly reduce compliance, it is still like a car, someone needs to know how to drive it and be willing to do so.
We do not believe that all businesses suit using an online accounting package, but even if they do, our recommendation is that they should use an accountant to review both the base recording of the information and the financial reports that are prepared from it.
For those that are not willing or able to do it themselves, thank goodness there will still be compliance accountants in the future.
The real risk to compliance accounting is not online accounting packages, but where the work is done, ie outsourcing. With the growth of off shoring, increasingly it is going to be easier to get people in foreign countries with much lower charge out rates to do the actual processing at far cheaper cost than you can currently obtain in New Zealand. Xero and MYOB do not actively explain this.