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Confidence among accounting firms is the highest it has been in seven years, and digital leaders are setting the pace, according to CommBank’s latest Accounting Market Pulse report.
The industry report showed net 80 per cent of firms surveyed have a positive view of current business conditions, and an even higher percentage are optimistic about the next 12 months and 24 months respectively (93 per cent and 90 per cent).
While most firms expect robust conditions to continue for at least another two years, the research revealed digital leaders are set to pull ahead of their peers.
Commonwealth Bank executive manager of professional services, Julienne Price, said accountants cemented their status as an invaluable partner to businesses during the pandemic, guiding them through a rapidly changing compliance and commercial operating environment.
“As broader economic conditions have improved and many businesses are pursuing new growth opportunities, demand for accounting firms has reached new levels. There’s a broad-based boom underway, but some firms are better placed than others to capitalise,” Ms Price said.
The report examined the impact of digital transformation and accelerated technology adoption of accounting firms throughout the pandemic.
It found some firms are more advanced in their digital transformation, with one in three firms identified as leaders based on five core criteria: ease of working remotely; ease of delivering services digitally; having above-average digital skills; positive ROI on technology; and adopting new technologies.
These firms have higher mean profit forecasts (5.5 per cent) compared to followers (4.7 per cent), and are also more likely to expect client demand in areas of emerging growth such as IT and digital transformation, data and analytics, and environmental social and governance consulting. Digital leaders are also more likely to be investing in cloud-based technology and social media for inbound and content marketing.
“Digital leaders are more confident in future business conditions and financial performance, putting them in a great position to reinvest in technology and further embed their leadership. They are more focused on the client experience, driving efficiencies and using their culture as a competitive advantage,” Ms Price said.
While the outlook remains positive overall, the elevated demand for accounting services has escalated the battle to attract and retain talent. This is a major challenge that has intensified over the past 12 months. A net 93 per cent of firms said finding quality staff is challenging, while 62 per cent reported challenges in keeping quality staff.