Can you imagine what your practice will look like in 2030? It seems light years away, but it’s only another 10 years.
If you think back to how you worked a decade ago, and compare it to how you work today, you might feel like you can gauge the rate of change going forward. Because 2010 feels like just the other day, you would think the rate of change would be gentle.
The latest Practice of Now report found that 95% of the 3,000 accountants surveyed feel the accounting profession is undergoing an evolutionary or cultural change. This will undoubtedly have a remarkable impact in the coming decade.
In short: change is happening now.
Various external forces, like increased client demands, generational changes, and greater legislative burdens, are catalysing this change.
The business landscape is also changing, as a result. Gen-Z and Millennials are the majority demographic. They’re the new business owners, bringing with them their unique value set. Is your firm ready for this?
From the Practice of Now report, we have forecast five scenarios of what an accounting practice might look like in 2030. They are:
No more manual data
Data will automatically port from clients and their linked bank accounts into the accountants’ systems. Manual data entry will become increasingly rare, as can already be seen in some modern accountancy practices.
Two factors are behind this. Firstly, technology is second nature to the digitally native Millennial and Gen-Z business owners and operators. When thinking about forming a business, they start with technology. They are as likely to put their business on social media as they are to incorporate it with the relevant authorities.
They inherently understand that accounting is best done digitally, and as such, the first thing they’d probably do is download an invoice-creation app on their tablets or phones. This app is likely to be cloud-native, supporting the free flow of data.
The second driving factor is the increasing number of demands that legislation is placing on businesses, such as the digitisation of tax and payroll. Governments globally have realised that technology is a useful way to ensure compliance and avoid tax shortfalls. This is why businesses have had little choice but to use accounting software for some aspects of their accounting, meaning they will generate the necessary data by default.
How you can prepare: Ensure that your software is ready to link to the various data sources that businesses are making increasingly available. You will lose customers in droves if you are not using a cloud accounting solution by 2030.
Instantly accessible relationships
Clients will have real-time access to their accountants, and vice versa. Accountants will have an on-demand view of their clients’ dealings and will be able to interact with their clients in real-time. This allows them to become trusted partners, or a constant companion.
Accountancy has, until now, been prone to quite significant delays. If a client wished to see a list of debtors over 120 days, for example, they would ask their accountant to draw up a report. This could take anything from a few hours to a few days. This meant that businesses lacked the agility they needed to respond to matters timeously, and accountants were unable to adequately provide for their clients.
The free flow of data has fundamentally changed the business-accountant relationship. For the accountant, this level of visibility provides a plethora of new service offerings, which will change the perception that an accountant is only good for tasks such as compliance or auditing. A whole new world awaits accountants who are ready to take advantage of it.
How you can prepare: Ready your practice with the skills and experience required to build these kinds of relationships. Current staff can be upskilled, or you can bring in the new skills when you’re recruiting. According to The Practice of Now research, 82% of accountants have considered recruiting from a non-traditional background, and 43% believe that new accountants joining the profession should have a diverse industry background.
Start to make the necessary changes in your practice now.
Practice of Now
The latest research reveals evidence of a cultural shift within the industry as it prepares for the coming decade. Recruitment, skills and training, business practices, service offerings and technology are all evolving.
Always-on alerts and responses
If anything happens or changes for clients, the accounting software will instantly alert the accountant, who can then take the necessary steps to mitigate any risks. Should a client suddenly incur a bad debt from an order placed by a customer with a low credit rating, for example, the accountant would be alerted, and could in turn warn their client. Imagine the benefits of alerting a client that the order they’ve just received comes with caveats, and then offering advice on what the best course of action to follow from a financial standpoint would be.
This kind of proactive intervention is invaluable to clients and is yet another non-traditional way for accountants to add value.
How you can prepare: Relationships will change fundamentally, and you would need to ensure that all your staff are able to help clients when the occasion arises. Your software solution would need to be able to record any communication between your staff and clients, and clients should be made aware that they will be helped by the first available staff member. The traditional process of assigning clients to specific staff will be done away with. Ultimately, these are cultural changes in your practice, so be sure to present them to your staff in a gentle manner.
Preventative problem solving
Accountants will be able to do preventative problem solving if they proactively look for business problems and errors. This will avoid unnecessary year-end error corrections.
This is the most valuable perk of having a trusted advisor.
Imagine contacting a client to let them know that they will be in a precarious cashflow position in a few weeks’ time, and then advising them on how they can avoid it. This kind of observation is priceless to a client, while it is simply a leveraging of the experience nearly every accountant should already have.
This is more than an added benefit for clients. It can also create a more fulfilling working life for accountants. Few accountants enter the profession hoping to only speed through the year-end rush. If an accountant has the chance to be a superhero, let them be one.
How you can prepare: These predictions will change how accountants communicate with clients over the coming years, and this will need to be built into your processes. Try these processes out with your current clients to see if they are receptive to this kind of intervention. You could also run surveys or add it on to your traditional communications. When taking on new clients, you should note these service offerings as an integral part of your value-add discussion.
Higher costs but increased value
Due to the value added by the advisory services, accounting fees are set to increase. The increase might not be drastic, but accountants will be able to better monetise their offerings.
While businesses usually watch their spending quite closely, they do tend to be willing to pay for value. Increase your value before you increase your fees and you will stand a better chance of realigning your clients with the services you offer.
It might make sense for you to switch from once-off fees to a monthly, or even a yearly retainer. If the fees match the demonstrated value, no client will think it is a poor idea. Saving clients a large amount of money will put you in good stead when discussing fees.
How you can prepare: Do some market research to see what you competitors are charging for their services and consider what your pricing should be to remain competitive. If you are doing a survey, build in some sensitive questions about what kind of offers your clients would be most drawn to. Remember that they cannot be attracted to services that they have not yet experienced the value of.