We hosted 'virtual' meetings with 60+ firms and here's what we learned
We recently hosted some ‘virtual’ meetings with more than 60 firms across the UK and here’s what we found out about the challenges and opportunities they face.
During April, Silverfin hosted a series of virtual meetings to discuss leading change within the UK accounting profession. We couldn’t get together in person for obvious reasons so it was no surprise that the first subject for discussion was COVID-19. But when we’d finished sharing our experiences here we went on to have some really interesting conversations about how technology can function as an enabler in the move to delivering more advisory services. Here’s some of what we learned:
The elephant in the room - the accelerator effect of COVID-19
Is this way of working the new normal?
It was widely agreed that the accounting profession is unlikely to return to the old “normal”. A “new normal” will emerge out of our experiences of working and running firms during COVID-19. Much of this will be good for the long term success of firms.
The most obvious example is remote and flexible working. This will likely be core to our new normal - an efficient alternative to traditional ways of working and one we’ve all become au fait with over the last few months. We’ve seen the importance of technology here and have quickly had to exploit it to maintain business continuity. There will be no going back.
Employee engagement and management has shifted to something deeper and more purpose-led. Leaders have recognised the need to be more empathetic, accessible and approachable during this time, and this too is likely to continue.
Finally, a greater focus on agility, business continuity and taking a view of how to ensure long-term success means clear improvement plans need to be in place for firms and their clients need the help of their accountants to do the same.
Firms that respond to the current market landscape proactively by pivoting their own business and their clients to reimagine their go-to-market strategies, and adapt quickly to market forces will weather the storm and should come out of the current situation stronger for the future.
More FaceTime less face time.
A less overt impact has been the effect it’s had on interactions with clients - virtual of course and yet still valuable. Our groups agreed that the support they offer clients has changed - accountants have functioned not only as advisors but also as counsellors, helping and supporting clients to navigate these uncharted waters.
Despite concerns that technology might mean interactions would be less human they have been anything but that. Despite not being able to gauge responses in the same way as before, shake hands or do any of those things traditionally done face-to-face, personal relationships between accountant and client have been maintained.
The uncertainty faced by clients has meant more openness in conversations, we’re checking in with each other more and it was agreed that’s been positive for building client relationships. But this change in approach does require a different set of skills from accountants. Not only on a basic level, hosting a meeting virtually requires more structure, but also the support offered is more complex. How can you shift clients from thinking short-term about cash flow and today’s crisis to considering their strategy for profitability in future? It’s highlighted the importance of developing strong interpersonal skills and having a high Emotional Quotient in this shift to an advisory relationship.
Digital transformation plans didn’t change, they just moved faster.
Necessity is the mother of invention and the firms we talked with had made major changes to the way they used technology to work together within their teams and with clients.
Not surprisingly, the use of digital communications and collaboration tools like Microsoft Teams and Zoom increased across all the firms - even with team members in firms who had been unwilling adopters in the past. Firms also recognised the need for new technology to support the completion and automation of common accounting tasks such as the production of working papers or management reports.
Many had already planned to become more digital, and to benefit from the advantages the use of real-time data, cloud, and automation bring. The current situation acted as a catalyst for an expedited timeline. Even those previously cautious or even opposed to such a technological upheaval have found the idea of digital transformation more attractive of late. It was agreed that this change in mindset is likely to continue, as firms now, more than ever, recognise the need to stay ahead on the technological maturity curve.
Technology is an enabler of business change
Several strong themes emerged in our conversation about what we can expect from the future of accounting and what it will take to succeed. We also heard how firms had managed change and used digital transformation to unlock opportunity and tackle challenges. Here’s what we learned:
Don’t focus on technology, focus on capabilities.
It was clear that the shift to advisory must be supported by the right technology. But what also became apparent was that technology must also be supported by the capabilities of the business: the right strategy, skills, training, and ultimately mindset.
Take strategy as an example, a firm might decide that they need a way of digitising working papers but not push themselves to also formulate a strategy to shift to delivering more advisory services and unlocking the additional revenue streams this represents. In not doing this they might opt for a point solution to solve their immediate pain and not establish the foundation of data mastery and infrastructure necessary to support their long term objectives. Basically - they miss the big picture opportunity in their short term technology change.
Skills also need to be a key focus - a shift to advisory through the use of technology needs to be supported by teams with the right skill set. Stronger consultative or interpersonal skills are needed as opposed to the ability to use and interpret data - as this becomes automated. This will in turn have an impact on hiring strategy and training.
We heard how the disruptive nature of technology on traditional work and functions of the accountant mean graduates are being expected to take on the role of seasoned advisor much earlier and in job training doesn’t always support this. Training is traditionally done “just in time” and this needs to shift so that employees are better equipped to meet client demands.
The overarching point was that technological changes fail when companies don’t invest in making the organisational changes to ensure its success - that means the right strategy, the right skills, the right training, and the right mindset.
Digital fluency isn’t about the mastering of tech.
Leadership mastering the use of technology, though important, wasn’t the most significant thing identified as contributing to the success of a digital transformation project. It’s more about embracing the value of technology and being able to articulate it, particularly from the top. Digital transformations are much more likely to succeed if this core building block is in place.
A difficulty though is having the ability to conceptualise how technology can impact the firm for the better. One of the interesting things to have come out of our current challenging situation is that this has become much easier. It’s far more simple to comprehend how technology can add value particularly to common accounting workflows now that most of the firms we spoke to have had no choice but to make these digital.
New allies will emerge to drive innovation in firms - you’re not alone
Everyone realises the need to transform their processes and embrace the efficiencies that technology brings but few have achieved this at scale, and at speed, yet. This need for speed will see firms, and their technology providers, teaming up to share experiences and ideas, and then support each other in faster adoption and innovation.
Our online meetings provide the accounting community with thought-provoking opportunities to learn about where our profession is heading next. To hear and learn from each other.
These are challenging but exciting times for accountants. Changing client demands and technology are transforming accounting. Our recent research showed that 76% of accountants told us they believe that advisory services will be their biggest revenue earner by 2025. But just 14% of respondents say that these higher margin services are their greatest source of revenue today.