The accountancy profession is never static. Whether through technical, legislative, or technological developments, firms always have to be in step with trends and regulations to stay competitive and offer the best service to their clients.
Below are five key trends facing accountancy firms this year.
Shifting staff demands
It almost goes without saying, but without high quality talent, a firm is almost doomed to failure. Despite this, it seems that finding – and keeping – the best employees is becoming more difficult within the accounting profession.
Not only do firms have to contend with a workforce that appears more willing to switch jobs than ever before, but there’s also the fact that the way in which people work is changing. Increasingly, job seekers and existing staff are looking for more flexible working arrangements, whether that involves remote working, job-sharing, or a change in working hours during the week.
As such, any firm looking to employ the best and brightest should consider whether it’s doing all it can to appeal to and incentivise both potential and existing employees.
Tax goes digital
There’s no denying it – tax and accounting systems in the UK are moving online, with HMRC’s Making Tax Digital for VAT regime being just one example of how the UK’s tax system is embracing the digital age.
When it comes to accounting and taxation software, however, there has been an even bigger development that accounting firms should be aware of, and that is cloud-based software. Popular accounting and bookkeeping software, including Xero, QuickBooks and FreeAgent, make use of the cloud. Accounts and tax return preparation solutions, such as Taxfiler, are also frequently cloud-based. So, if you offer traditional bookkeeping and tax compliance services to clients there’s almost no avoiding it.
Due to the cloud’s popularity, clients are also likely to expect firms to be familiar with these systems as part of their compliance offering. As a result, firms that fail to embrace the benefits of cloud-based technology may run the risk of losing out to competitors.
Changing client expectations
The amount of work clients demand from accountants is not only on the rise, but the nature of the work is changing as well.
The days of accounting firms simply offering bookkeeping and run-of-the-mill tax compliance services are starting to fade. In their place, clients want more advisory services, whether that’s assistance with migrating their internal accounting systems to the cloud or understanding how best to grow their business.
Rise of Artificial Intelligence
Improvements in artificial intelligence (AI) have been spoken about at length in the media, but when it comes to the world of accounting, firms have been relatively slow in considering its benefits.
Over the next few years, firms should keep an eye out on emerging technologies and consider how to integrate AI into their practice to provide growth opportunities and insights. The ACCA, for example, recently released a report: “Machine learning: more science than fiction”, which highlights some of the applications of machine learning, including:
Improving fraud detection
Making sense of complexities in taxation
Effective non-financial reporting
Knock on effect of Brexit
It’s been over three years since the Brexit referendum, and we’re still no closer to knowing how exactly the UK will leave the EU.
The latest developments since Boris Johnson became Prime Minister, make a no-deal scenario increasingly likely, although MPs trying to block this eventuality did manage to pass legislation attempting to thwart it before Parliament was shut down in September. With legal challenges abounding in the UK and EU officials suggesting no progress is being made in talks, it remains incredibly uncertain what will happen and whether another extension to Article 50 will be requested – and granted.
Amidst all this uncertainty, accounting firms have several Brexit-related challenges to face. On the one hand, firms may see a strain on their fee earning potential. This could be from clients that face a downturn in business during the Brexit process or from larger clients that are considering relocating as a result of Brexit.
To offset this, firms may see more work come through in the form of advisory services, such as advising clients of the potential impacts of a no-deal scenario, and explaining how taxes such as VAT are likely to operate once Brexit happens.