What do you think an accountancy practice will look like in 2030? That might sound like a long time away but it will be here before you know it.
To create a reference point, you might look back at how you worked 10 years ago. By comparing things then to the way they are now, you might feel you can determine the rate of change moving forward.
Back in 2009, Barack Obama was the US president. The big news event was the ditching of Flight 1549 in New York’s Hudson River, while James Cameron’s Avatar was delighting movie goers.
See, 2009 doesn’t feel like very long ago. So, you might think that the rate of change moving forward is likely to be gentle.
In the Practice of Now report, where Sage surveyed more than 3,000 accountants worldwide, we found that 90% believe a cultural or evolutionary change is occurring within their profession right now. This can’t help but have a profound effect in the coming decade.
Put simply, things are changing.
The cause is a perfect storm of external influences converging on the profession of accountancy at the same time – everything from increasing client demands and legislative burdens to generational changes.
The business landscape is changing too, in response to the same factors. Millennials and Gen-Z for example, are coming increasingly to the fore as business owners. They bring with them a unique set of values.
Is your practice ready for this?
Based on the research in the report, we were able to make five predictions about how a practice is likely to look in 2030. Here they are – and how your practice can change for the better.
1. Say goodbye to manual data entry
Data will flow automatically from clients and their bank accounts into the systems of their accountants. Manually keying data will become rare. Of course, for some more progressive accountancy practices, this is already turning into a reality.
There are perhaps two factors driving it.
The first is the aforementioned millennial and Gen-Z business owners and operators, who are digitally native. Technology is their lifelong companion – and using it is second nature.
Their process of forming a business starts with technology and they’re as likely to create a Facebook page as they are to incorporate their business with the relevant authorities. As a result, they also implicitly understand that accounting is best done digitally.
One of the first things they’re going to do when asked to create their first invoice is find an app on their mobile phone or tablet. The app will almost certainly save information in the cloud, enabling the free flow of data. The millennial or Gen-Z user wouldn’t expect anything else.
The second factor driving this prediction is down to the increasing demands that legislation places on businesses, such as the digitisation of tax and payroll.
It can seem as if governments worldwide woke up one day and realised that technology was a useful way to enforce compliance and avoid tax shortfalls.
So, in several countries around the world, businesses have no choice but to use accounting software for certain aspects of their accounting. They generate the necessary data whether they like it or not.
What you can do to prepare
You need to ensure your half of the equation – the software you use in your practice – is ready to hook into the panoply of data sources that businesses will increasingly offer.
By 2030, only the most reluctant practices will not be using some kind of cloud accounting solution. And they will pay the price when clients instinctively choose other accountants instead of them.
2. Build real-time relationships
The relationship between an accountant and their client will be near-instant. The accountant will have a real-time view of their client’s business and will be able to interact with that client in real-time.
The accountant will be a trusted adviser or even a constantly present companion.
Considered in hindsight, accountancy has until this point been prone to incredibly annoying delays. If a business operator wanted to see a list of aged debtors over 120 days, for example, then they might ask their accountant to create a report.
That might take a few hours to complete in a busy practice, or perhaps even a day or two.
As such, businesses lack the ability to respond to events in an agile way, while accountants lack the opportunity to be truly responsive and helpful.
With the liberated, instant flow of data between client and accountant systems due to the initial prediction above, the relationship between a business and its accountant can’t help but fundamentally change.
From an accountant’s perspective, this visibility can drive a whole host of new service offerings that will start to erode the perception that the role of an accountant is simply for tasks such as compliance or auditing.
A whole new world will be out there waiting for accountants – provided they’re ready to take advantage.
What you can do to prepare
Ensure your practice has the correct range of skills and experience to be able to build these kinds of relationships. You might look at training your existing staff, or look for these skills when recruiting.
Indeed, a finding within the Practice of Now was that 82% of accountants say they are considering recruiting from a non-traditional background. Furthermore, 43% of respondents say new accountants joining the profession should have industry experience outside of accounting.
Don’t leave preparations until too late. Start considering the necessary changes to your practice now.
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3. Utilise proactive alerts and notifications
Accountants will know instantly when things change for a client because the software they use will act as a third pair of eyes, watching out for problematic situations – or even opportunities – 24 hours a day, seven days a week.
Again, this builds on the first two predictions discussed above. An example might be that the accountant is alerted when their client suddenly incurs a lot of bad debt resulting from a big order placed by the client’s customer, whose credit rating is low.
Imagine phoning or messaging a client telling them an order they’ve just received comes with caveats – and then detailing the most prudent course of action from a financial viewpoint.
This kind of proactive intervention delivers huge value for clients and again shows a different path that accountants can follow in addition to the traditional tasks they undertake for businesses.
What you can do to prepare
Such a fundamental shift in relationships could involve key changes. They could include the need to ensure all staff are able to help clients on an as-needed basis. This could be done by ensuring your client management software is able to record all communications staff might have with clients.
Perhaps the traditional process of assigning clients to individual accountants might need to be done away with so all staff members can help as needed. And this would need to be communicated to clients so they don’t find communicating with your practice difficult or frustrating.
These might feel like radical changes – and ultimately they’re cultural changes within your practice – so start the discussions with your staff sooner rather than later.
4. Use pre-emptive problem solving
An accountant’s time will be spent proactively looking at business problems and seeing errors before they manifest into year-end error corrections.
Ultimately, this is perhaps the most obvious manifestation of the switch to trusted partner that’s been a regular discussion topic when crystal-ball gazing over the past couple of years.
Imagine contacting a client to say they’ll be in a negative cash flow position in three or four weeks’ time – and then telling them how to try and avoid it.
To a client, this kind of observation feels like magic – “How is my accountant able to know this kind of thing?” – but it’s just one way of leveraging the experience and knowledge that virtually every accountant has built up over their careers.
But being able to share this isn’t just about adding value for clients. It can lead to more a satisfying and fulfilling working life too. Few accountants entered the profession just to grind away at year-end time ensuring taxes were paid correctly.
The accountant as a kind of superhero, swooping in to solve problems – why not?
What you can do to prepare
Many of these predictions indicate how communicating with clients is likely to change in the coming years and this needs to be built into your processes.
You might start sounding out existing clients to see how receptive they would be to this kind of intervention, perhaps by issuing surveys or simply just tacking on a discussion about it to existing communications such as phone calls or emails.
For new clients you take on, this kind of discussion should become a key part of any discussion you have about your service offerings and the value you offer. Again, you might need to adapt your processes to reflect this.
5. Charge higher fees – and offer better value
Accountants will charge their clients more than they do today because of their increased value due to their advisory services. Fees might not grow by that much, of course, but accountants will be able to monetise better.
Although most businesses like to watch their expenses closely, you know from experience that they are prepared to pay for the value they receive. And if you start to offer more value, increasing fees – or realigning them with the services you offer – should not be too difficult.
You might be able to switch from one-off fees to monthly or yearly retainers, for example.
Again, if the fees match the perceived and demonstrable value then no business will think this is a bad idea. Swooping in to discuss fees when you’ve just saved a client a substantial amount of money is, of course, the best timing.
What you can do to prepare
Start thinking about pricing now and look at how your more progressive competitors price their services for things such as advisory services.
If you do indeed issue a survey to your clients, as mentioned earlier, then add-in some sensitive questions about what kind of bundled services clients believe are best.
Although remember that until they’ve experienced the benefits of advisory services, they might not be able to envisage the true value of what you’re offering.
The Practice of Now
We surveyed 3,000 accountants worldwide to reveal how the accounting landscape is changing. Discover how your fellow accountants are preparing for the next decade and learn what you can do now to keep your practice successful.