Sage Series: Putting theory into practice to become the accounting firm of the future
Read the final instalment of our four-part series written by Jules Carman, Digital Transformation Expert from Alliott Group Preferred Partner (Accounting Software) Sage.
After examining the present state of the accounting profession, one thing we can all agree on is that modern firms certainly have their hands full.
From building a brand that will attract new business and talent to plugging the skills gap and keeping pace with the biggest technological revolution the profession has ever seen – as well as turning a profit – there is currently a huge amount for accountants to manage.
Add in the breadth of competition accountants are now facing – the majority (67 per cent) of respondents to Sage’s 2018 Practice of Now survey believe the profession is more competitive than ever – and this perfect storm of disruption becomes clear.
But what do all these factors mean for accountants on a practical level? How can firms respond to this increasing complexity? And how do they go about future-proofing themselves and ensuring that they remain competitive in the years to come?
To help answer these questions, we’ve identified four practical steps that accounting practices, large and small, can follow to help them move from redundant to indispensable.
Adopt a technology-first mindset
The first step to putting technology front and centre is identifying someone within the firm who has the expertise to take responsibility for digital innovation. HR departments and team leaders will be able to offer advice on who may be suitable for the role, so should be heavily involved in the process. Or, if no-one internally is suitable, this might involve recruiting someone new who can be dedicated to looking after the firm’s technology strategy – for example a ‘Chief Digital Officer’ – with the specific experience and know-how to make a difference.
Firms should then review their key processes and identify how they could be improved by technology. For example, are employees spending too much time reconciling client accounts and, if so, could this task be automated? Speaking to employees will be key to identifying the processes that need updating, while additional insight can also be gained from speaking to others in the profession. Once any inefficiencies have been identified, firms should spend some time researching the different tools on offer, evaluating service providers and exploring potential solutions through free trials and pilot programmes, to ensure they are sufficiently educated on the options available to them.
This technology-first mindset should also be taken out to clients. For example, firms can help businesses that are transitioning to the cloud by guiding them through the process, which would be especially beneficial for those that don’t have the expertise in-house. Providing this added value training will serve as a competitive differentiator, as well as helping to foster long-term client relationships.
Invest in people
It’s the people that will ultimately determine the future success of any firm, so they need to be equipped with the knowledge to take their firms to the next level. If firms want to grow and retain their talent, they have to be prepared to invest in the development of their workforce.
One way of doing this is to offer regular training through education providers like AVADO in areas such as SOX and CASS compliance. But the courses provided can’t be picked at random. There has to be a structure to the process so that everyone in the firm has the same opportunities to develop. Firms should devise a formal training programme and frequently review it to check that it fits with general trends in the profession, as well as wider business goals.
Before this can happen, HR personnel and team leaders have to understand the workforce they are investing in. Developing a Culture Assessment Plan, for example, can help collect feedback from employees on the areas that need to be improved, the issues that are most important to them and where investment should be focused. Going through this process will help firms be efficient with their investments, as well as allowing them to be ‘talent magnets’ and cultivate an organisational culture that supports long-term personal growth.
Become a '365 firm'
One factor that can’t be ignored is that the focus of modern accounting firms has to shift to becoming an extension of their clients’ management teams. Clients are no longer satisfied by just knowing the numbers, they want to receive additional insight into what those numbers mean for the future of their business. Accountants should, therefore, be encouraged to take a proactive approach to client servicing and build “clients for life”, rather than only focusing on periodic transactions around tax time.
Services related to ‘management accounting’ and ‘management support’ should be made central to any firm’s offering. This consists of preparing and interpreting accounting information such as forecasting and budgeting - along with analysing strategic options, benchmarking performance against the wider industry and carrying out risk audits.
One way for firms to establish this more strategic approach is to replace the traditional ‘billing by the hour mode’ with access level agreements, enabling clients to select the level of service they want to receive. Technology adoption will also play a key role in enabling accountants to provide the aforementioned services. For example, firms should promote the use of cloud-based packages that link clients to their online bank accounts, automating the importing of bank transactions. This provides real-time visibility into clients’ finances, allowing firms to set achievable goals and reinforce their role as a proactive advisor. Automating process also gives accountants more time to really get to know their clients and become the trusted confidant they are now required to be.
Carve out a niche and excel in it
With competition in the accounting profession a key concern, firms have to find a way to differentiate themselves in order to help foster new client acquisition and drive long-term profitability. As a starting point, firms have to gain a better understanding of their business landscape by breaking it down into three components: marketplace, clients and competition.
Understanding the marketplace involves observing and recognising broad trends, such as an increase in M&A activity. Understanding clients, on the other hand, requires firms to dig deeper than just asking them what they want. It involves learning as much as possible about their behaviours and uncovering their biggest pain points. The final step is to evaluate the competition by analysing factors such as how competitors are positioning themselves, innovative approaches they may be taking and whether any new firms have entered the profession.
Going through this process will help firms identify where the potential opportunities for differentiation may lie. They could then decide to specialise in a particular industry, such as healthcare, or use recruiters to help them hire someone with skills in a specific area of technology to build a new service. If they choose the latter, firms should establish team leaders to take ownership of the project and build a team of people that have the skills and passion for the new service. Whatever route firms decide to take, giving clients a compelling reason to select them will help ensure future success.
Ultimately, the key thing for accounting firms to remember is that although the disruption in the profession may seem daunting, it also presents a huge number of opportunities. By embracing the challenge and following the practical steps outlined above, firms will be able to adapt to today’s shifting landscape and make themselves indispensable to the future of accountancy.