Accountants servicing SMSFs have been told to exercise caution over the revolutionary technology and software that continues to impact on the sector as it may not necessarily meet their needs.
This topic is a dedicated chapter in a recent e-book launched by Class, Modern SMSF Administration: How to Embrace Digital Automation and New Service Models.
“There are many false paths on the road to nirvana – think of the Apple Newton or Myspace, once considered leading edge but are now almost forgotten relics,” the e-book said.
“Accountants should be wary of being seduced by technology that does not meet their needs.
“It is pointless investing in a solution that does not achieve the central goal in modern SMSF administration of automating all the functions that can be more efficiently and accurately performed by the software.
“Even if nine out of 10 of these processes are automated, the one that still requires a human being to intervene acts as a roadblock to the efficient operation of the rest.”
The chapter said the term ‘data feeds’ has become prolific in the marketing of cloud technology, but not all data feeds are worthy of the name.
“A true, direct-connect data feed comes directly from the financial institution into the administration software via a secure and encrypted link. This is what most people would intuitively understand as a data feed,” it said.
“However, other solutions that claim the name are not direct-connect feeds of data at all but are simply a system of emails sent from the institution via a third-party firm which reads and enters the data, sometimes manually, before sending it off to the administration software.”
This is inherently slower and costlier, and increases the possibility of error and emails getting lost or misdirected, it said.
The e-book encouraged SMSF accountants to trial software as the best route through the maze of competing offers.
It said the advantage of working with discrete funds like SMSFs is they can test the options with one or two funds to get a good idea of how they will perform on a larger scale.
“Of course, automation only gives the administrator a picture of where they are, it does not tell them where they are going or decide for them what to do next,” it said.
“SMSF trustees still need an accountant to consider all this information and provide the expert judgment and decision-making that only an experienced, trusted adviser can.
“The idea behind cloud is to free up your time to focus on this vital role.”
