Fast forward: What can you expect out of 2020
You would be living under a rock if you haven't noticed that the accounting industry landscape has been at the heart of exponential change. The last decade has seen the most significant changes.
Cloud accounting software players like Xero and Intuit made a big splash into a market that was heavily monopolised by a well-known and trusted household brand MYOB. This was by far the biggest disruptor to our industry and the small to medium business sector.
Fortune favours the brave
They say fortune favours the brave. The accounting profession is no exception to this. Those of us who were brave and bold enough to break away from desktop accounting soon realised the benefits of being able to do more with less time, and some took it one step further to become real advocates of the accounting brands they were using. We saw firms re-invest in their branding and marketing to align their service with a brand.
I recall going to conferences, and the question on everyone's tongue was which product do you work with and why? My answer was and always will be the product that works best for my client.
The dust has settled
The good news is that there is less talk about the product and more discussion about services, pricing, staffing, advisory, compliance, growth, gender and even mental health. I'm pleased that the dust has settled and the focus on our industry is far greater than the products we choose to work with today.
Conference and expo organisers have come on board by also making the shift to place a stronger focus on content that helps our profession stay agile and viable.
I counted that there are over 12 conferences in a year that arms us with the knowledge to tackle the new world of accounting and not to mention a plethora of webinars at our fingertips. In short, there is no excuse for anyone not to progress, unless, of course, they are living under that rock.
Harness the urge to remain relevant and accept change
The changes in the last decade are set to continue, and yes, there are still many unknowns. Blockchain technology is expected to affect the work of accountants, but how this will happen is not entirely clear for the masses.
Accountants will have more data available to them than ever before, which by default means that their role will change from one of compliance to one of consultation and advice. Technology will take care of the compliance piece and accountants will need to be skilled in analysing, interpreting and communicating information to the stakeholders.
Accounting professionals will continue to face more complexity, risk and ambiguity as technology, regulatory and business transformation converge. It's easy to feel overwhelmed by the change and the infinite number of options available. For this reason, we will continue to see the profession niching across industries or specialties. While many will sell the dream of being a 'one-stop' shop, many will struggle to execute and deliver.
Firms need to harness the urge to remain relevant by accepting change and gaining professional agility. Some have already abandoned the typical image of the profession, so they are more relatable to tomorrow's client. This behaviour is not restricted to small firms as we will see the more substantial firms adopt this mindset too.
Students entering the accounting profession need to prepare for the challenges of dealing with constant change plus the ability to adapt and embrace new technology. Communication, critical thinking, empathy and problem-solving skills are at the core of what will make an accountant future ready.
New accounting world comes with its own nuances
We all somehow survived the media extravaganza that AI and bots would replace our jobs. I also know that while we are all reliant on technology to do the heavy lifting of our everyday work, it doesn't mean that we are working less.
The rise of the new accounting world will come with its own nuances:
- Client expectations will continue to soar through the roof;
- Clients want their accountants to know everything from software selection to tax advice;
- Clients are finding it harder to justify paying huge hourly fees;
- Clients want their accountant to help them with their cash flow issues;
- Clients want to be inspired and led by their accountant;
- Clients wish to have more touchpoints with their accountant at no extra cost;
- Clients want to succeed at business and expect you to help them; and
- Clients will switch from one firm to the other easily if they don't see value.
- Firms will want to offer a one-stop shop for all service offerings including bookkeeping, payroll, tax, CFO advisory and tech expertise;
- Firms will struggle to find the right talent for the different service offerings;
- Firms will find it harder to win and keep business – loyalty will only go so far;
- Cloud technology will make it easier for clients to switch from one firm to another;
- New legislation like STP is the catalyst for an influx of micro clients;
- Firms need to invest in upskilling their team on products continually; and
- Firms will do well to have a more significant focus on mental health and wellbeing.
I invited four industry leaders to comment on what they thought the future of accounting would be in 2020. These leaders have a diverse background and perspective on the landscape, which contributes to the future of our industry.
Jim Softsis, managing partner – business advisory, Findex
There will be a broader focus on Advisory services such as Benchmarking, Global Mobility, Human Resources Advisory, Managed Payroll and Employment Services, to name a few.
As businesses continue to grapple with the emergence of new technologies, many private/family-operated companies will take the plunge and invest in modern ERP systems to achieve best process outcomes with the intent of improving the overall customer experience.
Many businesses will look to re-organise their debt packages with funders, taking advantage of lower rates or better terms. We see many 20+ year relationships with Banks come up for review, as many felt that their Banks/Funders didn't appropriately support them during the Royal Commission period.
Accountants need to gain a better understanding of cash flow drivers.
Advisors who have innovated their service delivery model will attract a new breed of client, one which requires a low-touch yet effective value-based service and by extension, a new kind of staff member.
Alex Brgudac, head of partnerships, Prospa
The biggest obstacle to growth for small businesses continues to be access to funding.
Traditional lenders have underserved the 2.3 million small businesses in Australia for a long time, but more recently, there's been a significant shift in awareness and consideration of alternative funding solutions. A review of alternative lenders like Prospa will continue to accelerate.
With the establishment of a fintech select committee and the passing of the Consumer Data Right, small businesses will see more competition, choice and greater innovation when it comes to financial products and services. Accountants will play a pivotal role in improving small business cash flow by collaborating with brokers in their community to not just broaden awareness of alternative funding options but to deliver the best experience for their clients.
By working together, you can better identify those cash flow pressures and funding needs early on and find the right solution for the client at the right time. It can be a pretty powerful partnership.
Rebecca Mihalic, Sydney director, Business Depot
The coming year will see a greater focus on work-life balance, mental health and building communities, and this will be driven by the early adopters of cloud accounting technology.
The cloud and its instantaneous access to data has increased client expectation levels. Resulting in many accountants being always "switched on" and answering emails and messages regardless of the day or time. This can then be compounded for sole or small firms – juggling the tasks of running a practice while also working in it, with no downtime for themselves.
Conferences will focus less on the tech and more on the human. Work/life harmony, turning off from tech and how to manage client expectations will be the more popular sessions at technology conferences as we all try to move beyond adoption and into balance.
Nick Sinclair, founder and chairman, TOA Global
I see many trends around technology and the industry from my experience with 400+ accounting firms globally and over 1,400 accounting team members working for us.
We have been seeing a steady trend of firms focusing more time and attention on implementing a more in-depth use of technology and focusing on using fewer apps but a deeper integration of the ones they do use.
We are also seeing a focus on the things that can't be automated and driving the human power behind these to add more value to their clients.
Whatever the future holds for 2020, I think it's safe to say we all agree on the importance of providing more value to our clients, embracing more digital change, collaborating better, having a deeper understanding of small business key drivers and being conscious of our mental health and those around us.
Lielette Calleja, founder and director, All That Counts