The survey set out to discover how the accounting sector is changing, what accountants are noticing about the services their clients are requesting and how they are being affected by these changes.
Although just over one in five respondents said they thought they had lost business at the hands of new market entrants offering new online accounting service business models, well over half of accountants in the survey (57%) accepted that the accountancy profession is being disrupted by new market entrants and technologies.
“Accountants need to have an overview and understanding of the broader challenges and changes taking place in their clients’ business,” says Paul Tooth, chief executive and co-founder of BrightHR. “This would include things like HR and changes in the workplace as clients also want additional consultancy from their accountants other than the services they already receive.”
The impact of the shift is not to be sniffed at. According to the survey of 85 independent accountants from across the UK, four out of ten respondents said that their core audit and tax services are becoming less valuable to clients. Instead two thirds said they are being asked to provide more strategic advice than ever to my clients and 54% said over the past five years their role has moved from traditional accountancy to strategic financial advice.
Kathryn Rigbye is HR talent manager at PM+M, a member of international accountancy alliance Praxity. She believes the soft skills needed to be a successful business adviser are shifting the recruitment focus away from just looking at accounting expertise. “When recruiting into accountancy now we look for more of a business adviser to the clients. Someone who shows they can identify with the clients and understand their business.”
In practical terms, this shift has also led to a growing number of accountants looking to offer a fixed price for their services, as the popularity of the software as a service model (SaaS) among SMEs has struck a chord. Two thirds of respondents to the survey either already offer an all-inclusive service for a fixed price fee or plan to do so in the future.
“Cloud technologies may be commoditising tasks such as bookkeeping, invoicing and bank reconciliation, but this is actually a good thing. Your real value as an accountant lies in the advice you offer on top of your technical expertise. By not having to focus on administrative tasks, you can embrace your role as a true virtual FD for your clients,” says Peter Ewen, managing director of ABN Amro Commercial Finance.
For career-hungry accountants, the knock on effect in terms of the skills needed to best service clients cannot be understated. The vast majority said they felt that the role of the independent accountant is changing rapidly but there’s also an acceptance by many that the skills they possess are failing to keep pace with changing client demands and expectations.
Alarmingly, almost one in three respondents said they didn't feel as if they had the knowledge and expertise to provide and market a strategic FD service to their clients. And a staggering 87% said they thought accountants need to get better at marketing themselves as advisers.
Ewen said that one of the things that surprised him the most about the findings of the survey was the resilience of accountants in the face of such upheaval. “Despite a wide acknowledgement that accounting is being disrupted by new market entrants and technologies, accountants remain optimistic about the opportunities that change will bring,” he said.
What does this mean in terms of individuals and the kinds of skills they need to stay ahead of the game? “With bookkeeping becoming increasingly automated, individuals should be seeking out training and boosting their knowledge in order to become true advisors and strategists,” Ewen says.
Bev White, managing director of Penna Career Services, says secondment into business can be a very useful experience for practitioners looking to forge expertise as business advisors. “It allows them to come back with real world experience rather than just theoretical knowledge.”
If external secondment isn’t on the cards, then moving around the practice can offer effective exposure to a wider range of business challenges, all good for developing that broader business advisory skillset. “Often people go into a firm and become experts in a particular stream but that doesn’t give them the visibility of the other parts of the business,” White adds. “How can you offer strategic advice if you have such a narrow view?”
Funding is another area accountants are increasingly being asked for advice by their clients. One in ten said they are asked for advice on accessing finance on a weekly basis and a third are asked monthly. The majority of accountants gave themselves a ‘medium’ rating on their ability to provide advice on accessing finance more generally. The survey also revealed that while the majority are comfortable with their level of understanding on bank funding, there is a knowledge gap on other routes to finance such as: venture capital; angel investors; asset based lending and peer to peer.