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Digital accounting trends: Four key findings

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Technology is changing rapidly in the accounting profession, with new software platforms popping up, new regulations taking effect, and new expectations from clients when it comes to marketing and communications.

 

15th Aug 2022
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Some accountants position themselves as digital leaders and supporters of their platform of choice – others are reluctantly resigned to complying with the new requirements of Making Tax Digital.

PracticeWeb’s latest insight report delved into the various ways technology is changing the industry. 

Looking at three key areas – accounting software, digital marketing, and the challenges for clients – we surveyed 400 SME owners with an accountant to find out their views on the topic. 

We’ve outlined a few of our key findings here.

SMEs need support with accounting tech

Although software should, in theory, make things easier for your clients, getting used to the new platforms could still be a learning curve. 

Almost two-fifths (18%) of the business owners we surveyed disagreed with the statement “I understand how to use accounting technology”. Meanwhile, 63% agreed that “I could benefit from better technology to manage my accounts and finances”.

This opens up an opportunity for accountants to share their knowledge, offering support with choosing software and tutorials on how to use it as part of their wider online accounting services. 

Younger generations expect digital by default…

The research also reflected a number of generational trends among SME clients.

The younger a business owner was, the more likely they were to work with an accountant who had increased their use of online accounting software in the last year – while 29% of people across the board said their accountant had done so, this percentage increased to 42% for those aged under 35.

Their accountants were also more likely to engage with them digitally, through remote meetings and information sharing. 

…and they’re not willing to stick with poor service

Interestingly, younger clients were also more likely to change to a new accountant due to poor communication or service, compared to those in older age groups who were more likely to have never changed their accountant at all.

While an average of 34% of people across all age groups said they had never changed their accountant, this increased to 52% for those aged over 54, compared to 10% of those aged 18-24. 

Expectations are changing, and clients are increasingly unwilling to stick with a service that’s not meeting their needs, when they could easily find and switch to a better alternative. 

Clarity and expert information inspires trust

When people are looking for a new accountant, we found that many people still favour the traditional method of referrals: word of mouth remains essential to building trust.

At the same time, though, these recommendations are backed up by the prospective client’s own research. 

More than half (57%) of respondents said the clarity of the website was ‘very’ or ‘extremely’ important to them when deciding on an accountant, and 58% felt it was important to see evidence of expertise, such as articles or guides.

Even after they’ve settled on a likely choice, people will still look to the accountant’s website and social media channels to back up their decision.

Find out more in our full research report, ‘The digital accountant: Is your firm behind the curve?’.

Replies (5)

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By Hugo Fair
15th Aug 2022 16:56

So the takeaways here are:
* Use more technology to be more attractive to younger prospects;
* Work hard to convert those younger prospects into younger clients;
* Watch as those new clients wander away (as they have less loyalty than older clients).

Not sure that would get my vote if brought to my attention as an investment proposal!

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Replying to Hugo Fair:
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By Paul Crowley
15th Aug 2022 19:05

It is probably an accurate representation
Older clients prefer the person that they trust and have trusted over the years
Newer younger clients just do not have loyalty
Which really confirms the subscription model for new young clients

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Replying to Hugo Fair:
paddle steamer
By DJKL
16th Aug 2022 10:02

But, do clients become more loyal as they age, are these young clients permanently like bees with mixed flowers or will they in time mature into only appreciating one scent? ( Effectively if you can hold them for 5/10/15 years etc do they become loyal?)

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Replying to DJKL:
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By Hugo Fair
16th Aug 2022 11:36

I wasn't proposing the 3 steps outlined, merely summarising my (cynical) take on the article's messages.

In truth, I don't believe loyalty as such increases with age - although possibly an increased awareness that the world isn't perfect, with a dollop of lethargy, tends to a 'better the devil you know' attitude commensurate with client retention?

At which point you may find that those you've managed to hold for 5/10/15 years are those that were less mesmerised by 'fashionable' technology and more by the underlying service - which are presumably the ones you want to keep.
[Of course my clients always stuck around solely due to the exemplary service!]

I guess my concern with the message was that fripperies (which is all that many 'latest additions to the techstack' are) may attract your bees and butterflies ... but only until the next 'interesting' glittering gewgaw is noticed, which seems to me to be a race towards diminishing returns (and probably lower standards).

Indeed the article seems light on the concept of retention, focussing primarily on acquisition as if that was the main objective.

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By raybackler
16th Aug 2022 12:05

This report fits my experience pretty well exactly. I prefer to interpret the comments about younger clients and technology differently. Too many accountants are reactive to compliance deadlines rather than proactively helping clients with their businesses. Trust has to be earned and - as has been suggested - get it right and the younger generation won't change accountants. Finding an accountant that fits what the younger client wants is hard for them, as it is with finding any professional adviser. Websites, social media and word of mouth recommendations are the only sources to help in deciding who to go with and, if the choice doesn't work out, they will keep changing until they get what they want - quite rightly.

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