Trust in traditional financial institutions remains extremely low, yet accountants are still the most trusted source of advice for the majority of businesses. To maintain and live up to this status, accountants should be aware of the major challenges facing our industry today.
It’s now easier than ever to create your own website and start a business from home, and the rise of unqualified accountants could pose serious problems for our sector.
A recent survey found that when choosing an accountant to look after their affairs, only 8% of small businesses took an accountant’s qualifications into consideration.
Since there are no regulatory laws in place, unlike solicitors and doctors, anyone is free to call themselves an accountant without any form of training. It’s not until they pass qualification exams and join a professional body that they become subject to any kind of professional conduct rules.
Unqualified accountants often have narrow skill sets, and yet businesses are still turning to them for help and guidance. The risk that businesses are taking, in receiving bad advice reflects badly on the whole profession, as it could have a negative effect on their growth and development, not to mention leading to a deterioration in the trusted and reputable status we have earned as an industry.
If they’re not turning to unqualified accountants, many businesses may be choosing to go it alone. The advent of new online technologies and a mobile internet culture has seen a proliferation in the number of cloud-based accountancy software.
Along with the now well-established services of HMRC Online, business owners may now likely question why they need to solicit the services of an accountant when they can do a large number of functions for themselves.
Of course, a qualified accountant offers expertise on tax planning and business advice, along with a wide variety of other skills, but many small businesses do not realise this.
We need to take a lead in educating small and medium sized companies about the pitfalls of self-administered online accounting software, as well as anticipating and facilitating their requirements to access accounting information twenty four hours a day. If we do, we can help them avoid any unnecessary mistakes and maintain a healthy flow of business for our own industry.
If we don’t offer our help and guidance, not only do we stand to lose business in the short term, we will also dent the reputation and trust of accountants as a whole in the long run.
The final major issue facing the accounting industry, in Mitten Clarke’s opinion, is the nationwide trend towards firm consolidation.
With rising costs in all sectors, reducing overheads and expenses, sharing resources and expanding offerings to provide a more diverse selection of services to clients does make some sense. There are many in the accounting industry who would argue that firm consolidation is actually a solution to problems facing a number of accountants.
However, we believe this is a somewhat naïve viewpoint to take, as it masks the bigger issue. Combining and consolidating two average firms is not going to make a single outstanding company, just like mating two dinosaurs doesn’t result in a gazelle.
Instead, we ought to be focusing on the real problems and identifying what services our clients want from us. Offering anything and everything as a one stop shop doesn’t necessarily inspire confidence. If we focus on the real values we as accountants provide to businesses, we can deliver above and beyond on them and secure our future.
The future of accounting
Whilst there are undoubtedly a number of challenges facing the accounting industry, we can rise to them. If we’re aware of any upcoming problems, we can take the necessary steps to support our clients with the new needs they might have.
The good news is that the accountancy industry is still seen as trustable and reputable, and in continuing to develop professional relationships with other industries and supporting new businesses, the future is looking positive.
Mandy Mitten is a director at accountancy firm Mitten Clarke