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12 May 2016 03:00pm

The four threats to accountancy firms

A landscape of disruption caused by advancements in technology, social change and new players in the market mean the accountancy profession is under threat unless it makes a number of changes, according to David Oliver, a non-executive director at MyFirmsApp

Speaking at Accountex this week, Oliver highlighted the top four threats affecting all accountancy firms in today’s marketplace.

According to Oliver, these threats are challenging the existing accounting model, disrupting the status quo and forcing a change in attitude and action in the industry.

He drew on a variety of sources to compile his top four, including research by Kevin Salter and the IT Faculty at ICAEW; Paul Dunn, chairman of B1G1; Tony Margaritelli, chairman of the ICPA; Accountancy Age; the benchmarking report by Panalitix, Iris UK and Syscap; as well as research carried out by a team of internal analysts at MyFirmsApp, who call up to 7,000 accountants a month to gain insight into the profession.

“This is an unprecedented time of change for the profession,” Oliver said.

In order to remain relevant and use technology wisely to stay ahead of competitors, he encouraged accountants to be aware of market risks and take steps to harness these threats.

The first threat he highlighted was the risk of losing control through digital technology.

Advancements in technology are offering new opportunities to clients and as a result, putting accountants at risk of losing their clients.

He warned of the risks of competitors reaching out to clients through advertising on smartphones and warned accountants that unless they engage in this mobile space, their clients will migrate.

This is an unprecedented time of change for the profession 

David Oliver

The second threat Oliver identified was that posed by the digitisation of HMRC.

According to Oliver, the digitisation of HMRC is cutting out the need for the middle man – the accountant – and providing clients with direct access to the software needed to carry out the work traditionally done by the accountant.

He encouraged accountants to engage in the mobile space so that they can offer clients all the digital solutions that they need, meaning they won’t have to rely on software firms and competitors.

The third threat, according to Oliver, is the risk of the top 100 accountancy firms, including the Big Four, targeting smaller businesses.

The benchmarking report by Panalitix found that 61% of firms surveyed lost between one and 10 clients in the last 12 months.

The number one challenge for firms surveyed was gaining new clients, followed by the challenge of retaining existing clients.

According to Oliver, accountants need to adapt to changes in the market to prevent their clients from moving to these competitors.

The final threat is the limitations of traditional marketing. According to Oliver, out-dated marketing produces fewer clients.

He added that 96% of firms he looked at had no compelling soft offer, be it a free report clients can download or a company app, on their website.

A compelling soft offer, according to Oliver, is something engaging and free that will be valuable to the client and has a call to action so clients can request it immediately and get access to it instantly.

The solution to the four threats is ultimately getting engaged in the mobile space, according to Oliver.

Sinead Moore

 

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