A report by IRIS Software Group has highlighted the difficulties facing accountants. The report, entitled What is Keeping Accountants Awake at Night, is thirty-three pages in length and is based on a survey of 166 UK accountants in autumn 2021 and data from the ONS, D&B and Companies House.
The report begins with a summary and is divided into three main sections and a conclusion.
- What is keeping accountants awake at nigh
- The current state of digitisation in the sector
- Discussion and recommendations
The report was created in an atmosphere summed up by Elona Mortimer-Zhika, Chartered Accountant and CEO of IRIS Software Group, who wrote: “Historically, accounting was more about after-the-fact reporting, while today, accounting is more about predicting the future – it has to be to help keep the businesses they support afloat.”
Challenges
Every industry faces challenges, and with accountants overseeing most of them, they are not immune to those changes. Key challenges faced include:
- Making Tax Digital: only 25% said they have the right tool to support clients with their transition to MTD
- Talent: 32% said that their current skill set is a barrier to growth, and 49% said hiring and retaining staff is a significant challenge
- Time to grow: One in five is concerned about keeping their business afloat. One in four cannot find the time to plan for growth
Technology
Before the pandemic drove accountants to the cloud, 75% were largely analogue, using paper and desktop computers. That has now dropped to 25%, yet the number of truly digital firms has only risen by 2.5% to 5%. It infers there is much work yet to do.
The survey findings reflected this belief, with 40% of respondents implementing no new technology in the last 18 months. The inference is that they went digital enough at the start of the pandemic but have not progressed. For example, only 24% plan to adopt more technology in the next 12 months.
Yet technology can help firms with both survival and growth.
Jim Scott, Managing Director of Accountancy, IRIS Software Group, commented: “It’s plain to see the stress accountants are facing. While there are a myriad of innovative digital tools and services that reduce the admin burden of onboarding clients, tracking job stages, dealing with workflows and handling client approvals and communications, it’s becoming more and more clear that some accountants appear somewhat reticent to adopt them.
“Where this is true, this sluggish appetite for change is beginning to have a negative impact across their firms, up and down the country. Now is the time to take advantage of automation and real-time access to data, so accountants can create better economies of scale. Crucially, this gives them the time to do what they are truly valued for.”
What needs to change
As the following discussion lays out, technology can bring automation to the firm, freeing up planning time. It can also help overcome the skills challenge by providing expertise and simplifying roles, and making the firm more attractive to applicants.
Other research has shown that Gen-Z applicants want to join firms using modern, normally cloud-based technology that enables them to work from anywhere. The report also highlights the importance of in-house training to address the training gap.
In adopting technology, accountants can also share their knowledge with clients, becoming more embedded in their business and opening up further opportunities. Scott continues, “Digital tools enable a practice to be nimble and give accountants a lens into the clients’ business, further helping them to provide much-needed counsel.
“Technology will never be able to replace the insight and guidance an accountant can, but with good data, software tools will spot patterns and help accountants advise their clients and grow their own firms.”
Why is this important?
The world will move on if accountants don’t. While there are still the requirements for financial governance and reporting, organisations want forward-looking advice, not the rearview mirror. 89% of respondents are unsure if they could spot opportunities for their clients to grow or pivot their business. This surely has to change; otherwise, as the financial work becomes more automated, accountants risk becoming sidelined by management consultants who will offer the advice that accountants are not.
However, change is not easy in a profession that has worked without huge changes in technology for decades. The report ends with five ways to promote change within an organisation:
- Utilise communications
- Build a champion group
- Learning
- Recognition
- Accept fear
The conclusion also identifies four factors that accountants should consider for their technology to make sure it is future-proofed
- The technology should embrace API connectivity
- Leverage machine learning and artificial intelligence
- DevOps maturity for seamless updates and upgrades
- Cloud-based, to enable work anywhere and at any time.
Enterprise Times: What does this mean
This is a clarion call to accountants to wake up and take advantage of the technology that IRIS and others provide. By inference, the IRIS view, the longer the delay, the further behind they risk falling. The report lays out the imperative for change.
Whilst there are truths in the report, accountants can also only change at the pace of their clients. It is this factor that is perhaps missing from the report. Clients can be as inhibiting of change as accountants. However, there are reasons for change for those accountants who want the next generation of clients.
The report makes for interesting reading and raises some real concerns about the profession’s state. Will accountants miss out if they do not transform their businesses? Possibly, there are certainly opportunities for non-accountants to become business advisors. However, these new firms may provide an M&A opportunity for accounting firms looking to expand and bring experts from non-accounting backgrounds as the remit expands.
