ATLANTA — May 14, 2019 — Sage the market leader in cloud business management solutions, today released its annual Practice of Now report at Sage Summit Atlanta. The findings highlight a shift in the cultural landscape of the accounting profession driven by evolving client demands and the increasing need to adopt emerging technologies to remain competitive in the marketplace.
Of the 3,000 accountants surveyed, 90% believe there has been a cultural shift in accountancy as it enters the third decade of the 21st century. This shift is driving significant changes in hiring practices, business services and attitudes toward emerging technologies across the globe. In fact, 49% of respondents have formally examined their business practices in the last year, with an additional 26% in over the last five years.
“As evidenced in the Practice of Now report, many U.S. accountants would like to offer more advisory and consulting services, but feel they lack the necessary time or skills to do so,” said Jennifer Warawa, EVP of Partners, Accountants and Alliances, at Sage. “To bring the accounting profession to the future, accountants need to embrace the technology and training that will ultimately allow them to expand into a more consultative role. U.S. accounting firms no longer have the luxury of time. They need to adopt new technology and business models today, or risk being left behind.”
U.S. Accountants Still Identify as Number Crunchers
Internationally, the vast majority of accountants surveyed now offer wider advisory services in addition to traditional accounting work. However, an overwhelming majority (71%) of U.S. accountants view themselves as number crunchers that focus primarily on reporting, as opposed to consultative work. The most common reasons for remaining in the number crunching role are internal resistance to change and the lack of tools and technologies to execute on such services.
As with all of the countries in our survey this year, accounting firms in the US are starting to diversify their offerings. They’re already bringing a wider range of additional client advisory services to the table than was historically the case. Perhaps surprisingly, though, US accounting firms are a little behind the global average when it comes to such wider advisory services. Only in offering payroll services do they meet the average for the six countries surveyed (Canada, United Kingdom, Australia, France and Spain).
Specialization Is the Future for U.S. Firms
The study also found that 49% of CPAs in the U.S. foresee their firms becoming more industry specialized within the next five years. The survey data also reveals that most U.S. firms are actively assessing their current businesses and making plans for the future. Nearly half of the U.S. firms surveyed (46%) have conducted such an assessment in the last 12 months, with a further 23% in the last five years.
“Not only does industry specialization allow the accountant to become a master in a specific industry, but being an industry expert allows the accountant to become more efficient in their own processes, and creates a better revenue stream,” said Shayna Chapman, CPA and owner of Shaynaco, LLC and Sage customer. “Firms need to thoughtfully pick an industry they can excel in and then choose their technology, education, and marketing accordingly to propel them as the expert in that niche.”
Soft Skills Twice as Important as Hard Skills
81% of U.S. accountants consider soft and hard skills equally valuable when interviewing a candidate. The global research uncovered a key theme around a shortfall in skills for the coming decade, with accountants worldwide believing that accounting training isn’t going to be sufficient. We asked U.S. accountants specifically about soft and hard skills. Among those who favored one over the other, soft skills are favored twice as highly as hard skills (13% vs. 6%).
The Practice of Now reveals that accountants across the world are still facing challenges as a result of ongoing cultural changes within the industry. Key findings include:
An Industry Ready for Change
Amidst this cultural shift, there’s no doubt that meeting increasing client expectations begins with employees. In fact, 82% of accountants said they are considering recruiting from a non-traditional background. Furthermore, 43% of respondents say that new accountants joining the profession should have industry experience outside accounting. The accountancy profession will need to bring in new skill sets and update business processes in order to meet customer expectations. Otherwise, firms risk losing out to competition that provides new services through varied employee skills and technologies.
As skill sets such as technological literacy, relationship building and business advisory become increasingly important, 62% of respondents agree that today’s accounting training programs will not be enough to run a successful practice by 2030. Training programs will need to be updated in order for firms to keep pace with innovation and evolving client demands.
A Diverse Workforce for Today—and Tomorrow
With a gulf in the talent required to build a modern, digital firm, what’s needed is a commitment to building a diverse workforce. But this year’s data identifies an underlying issue not yet addressed by many practices. Just 30% of firms say they’re actively seeking to diversify their workforce. Only 28% have a written policy on diversity and inclusion. Even fewer (23%) have offered training or have altered any policies or procedures to promote diversity and inclusion (21%).
Diversity in the workforce should be a top priority in order to better understand customer needs and fill the skills gap.
An Eye Towards Technology Adoption
As accountants re-evaluate business models, 85% state that the profession in their country needs to pick up the pace of technology adoption to remain competitive internationally. The majority of respondents (56%) cite increases in productivity as the main benefit of technology adoption, with an additional 27% citing time savings as its main value. Meanwhile, more than half of the respondents look forward to adopting relevant artificial intelligence (AI) applications as available.
The Practice of Now 2019 includes the findings of independent research commissioned by Sage and conducted by Viga, surveying 3,000 accountants from across the globe (U.S., UK, Canada, Spain, France and Australia) in January 2019.
The Practice of Now 2019 is available for download here.
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