Where the profession is heading is always a major point of debate. Richard Hattersley listened in as a focus group of accountants described what they see as the latest trends and revealed how they are going to adapt.
Here's one guarantee: whether due to economic or technological changes (or both), the accounting profession will look different in the next five years or so. While some practices have adopted a number of strategies, many are waking up to the magnitude of the task befalling the profession.
The night before IRIS World, a group of accountants, selected for their progressive approach towards the profession, assembled to speak candidly about upcoming political, legislative, technology and social changes.
Commissioned by IRIS and determined from conversations with 285 accountants, the ‘voice of accountants’ survey laid the basis for the roundtable conversation, but the discussion wrestled with what it actually means to be an accountant today.
Economic and social
Inspired by only 26% of the survey respondents placing ‘core compliance’ as having the greatest return for their practice, the opening conversation circled around the pressure traditional services face.
With software such as TaxGo offering £20 compliance, Will Farnell from Farnell Clarke thinks compliance is only going to become price sensitive. The majority of Farnell’s compliance work in his tax team is targeting a niche – an area that low-cost compliance providers may not be able to compete in due to the technical nature of the work.
Farnell said: “Compliance is being commoditised and as such firms will see downward pressure on fees, so niche works for us but equally firms need to consider what they will replace compliance with to maintain fee levels.
“Compliance remains the bit we all have to do but I don’t believe a business model is sustainable that just offers compliance in the changing marketplace”
Social changes are having just as big if not more of an effect on how firms are run. Farnell Clarke has shifted towards becoming a millennial firm, driven partly by the fact 75% of professionals will be from this generation in 2025.
“If these people are in your workplace, many are going to be your clients,” he said.
The emphasis on this generation has changed Farnell Clark’s recruitment policy, their available working hours, and how they retain staff. As an example, Farnell Clarke now has a pub in their office.
Resoundingly, the chatter in the room and the research showed the inescapable impact technology has had on the profession. 37% of accountants within practices who are thirty years or under are driving practice technology change.
For Kevin Whitehouse from Prime Entry, tech has fundamentally changed his approach to business. “What I can see, we as humans have got this fantastic tech but we’ve got it wrong. We’ve still done what we’ve always done.”
Whitehouse recalled a day where he drove from client meeting to client meeting – that’s when he realised his firm had to change. Today, Whitehouse holds client meetings over Skype.
It's reasons like this that makes 79% of survey respondents believe their dependency upon technology will increase in the next three years. While technology can dramatically change the way accountants do things, Farnell reminded the group “that too many people get hung up on technology… it is just an enabler”. As an example, Farnell communicates with his clients over social channels like WhatsApp.
Circling back to the recruitment topic, Whitehouse contended that technology no longer shackles accountants and staff to a physical office and eliminates the traditional 9-5 working hours. Instead, he offers flexi-time with 10-4 as core hours. In one example, he said how he was shocked when he learned his recent recruit was berated by their former employer, a known firm, for being ten minutes late for work. How does this support a positive work ethic?
Political and legislative
Of course, the biggest disruptors to the profession will be the government’s tax digitalisation plans. 83% of respondents stated that once the MTD legislation is implemented it will increase their workload.
While accountants like Mark Stewart said that they’d keep working on, statistics like this steered the conversation into whether MTD will drive practitioners to sell up and retire. For practitioners wanting out, a bigger issue comes their way: who would want to buy a digitally unprepared practice?
As Farnell put it, “The barriers to entry are so low right now, people can sign up to various software companies. What’s the motivation to sign up to a partnership?”
But MTD is not the only legislation to hit the profession, with GDPR being an earlier threat. Although, the roundtable of accountants were not concerned by the legislation, with some arguing that the processes should already be there.
The barriers for entry is so low right now, people can sign up to various software companies. What’s the motivation to sign up to a partnership?
But they contested the results, which said 57% of accountants have started talking to their clients about what GDPR means for them – the group expected that statistic to be much lower.
Finally, the closing topic focused on what makes accountants relevant; for the vast majority of the group that meant adopting a niche. Teresa Noone from Indigo tax, for example, predominantly concentrates on clients from the entertainment industry. In order to really appeal to her niche, she fittingly holds her client meetings in her office’s recording studio.
The group finished with an interesting discussion about whether they see themselves as accountants or business people. The answers swayed towards business people, although Whitehouse said: “Once the client trusts us, we can be whatever they want us to be.”
The shift in how the attendees see themselves and the added value they offer correlates with the survey, where firms are no longer wedded to what they have always done, as 35% expect to have a greater number of services. That said, 51% believe their practice will offer the same services,
While the survey highlighted a number of emerging issues, Whitehouse concluded: “The only thing guaranteed is there's going to be change.”
About Richard Hattersley
Richard is AccountingWEB's practice correspondent. If you have any comments or suggestions for us get in touch.