As with any sector, there are a variety of challenges accountants need to overcome in order to thrive in an increasingly competitive landscape and it will be those who can adapt in time and create new revenue streams who will succeed in the long-term.
Competition and consolidation
With new businesses launching every day, all needing the services of accountants, there are valuable returns to be made for those who can gain market share. Because of this, more accountancy practices are emerging, both online and on the high street. For existing practices, this increased competition means they must consider how to make their service offering as compelling as possible.
As part of this, services such as wealth management, cloud accounting and strategic advisory are growing in popularity as accountants seek to evolve their ‘traditional’ service offering and deliver more value to their clients. M&A advisory is becoming increasingly sought after, as more businesses seek to build economies of scale by pooling their resources and expanding their geographical reach through strategic partnerships and acquisitions. As businesses contemplate these deals, accountants with M&A expertise can secure a lucrative source of income, by providing counsel throughout the process. From assessing the suitability of a potential merger, to raising capital and developing an integration plan, including tax optimisation following the acquisition.
Navigating digital innovation. AI, automation and data analytics
It’s a fact that firms with a digital strategy report higher growth than their more traditional competitors. This is because technologies such as AI and automation make users more productive and profitable by automating routine and time-consuming administrative tasks, such as account reconciliations, transaction matching or bookkeeping data entry. As well as relieving employees from the burden of long hours of paperwork, firms can both take on new clients and nurture existing customer relationships with the time saved.
As we increasingly use technology and generate more data, accountants are leveraging data analytics solutions to better manage this volume of information and make sense of it. Data analytics aggregate and analyse large data sets to identify patterns and correlations to help users make more informed decisions. Many firms are already leveraging ‘diagnostic’ analytics to identify trends based on historical financial reports and predict future performance. However, a more progressive approach is to analyse data to uncover what actions should be taken and what might happen should a certain path of action be followed, referred to as ‘prescriptive’ analytics.
Used correctly, analytics enables users to identify trends and anomalies from a range of structured and unstructured data within payroll, inventory, travel expenses, supplier payments and more. Therefore, instead of manually trawling through excel spreadsheets to find inconsistencies, analytics can now quickly and accurately assess this information for us. This stands to have an enormous impact on auditing, risk management and forensic accounting, by enabling professionals in these fields to focus less on the actual number crunching and more on offering post-analysis advisory.
Managing customer expectation, managing your time
In our fast-paced world, clients expect service providers to provide flawless customer experiences, delivered proficiently, and for a fair price. It’s tempting to offer the world when wooing a new client but it’s much more effective to manage their expectations and set clear boundaries from the beginning. That is, what services you can deliver, in what time frame, and what you need from them to make working with them successful.
It’s great to have a full quota of clients, however, to avoid working overtime, all the time, accountants should implement certain processes in order to work more efficiently and maximise their resources. Some approaches could include:
• Have Enough Employees to Share the Load: It may sound obvious but ensure that your practice has a big enough team to manage client projects and that your existing employees aren’t overworked. Whilst this will naturally have a knock on effect on employee satisfaction, this will also mean that activities will be completed faster and to a higher standard, with capacity to spare for unexpected peaks in activity.
• Make Your Meetings More Efficient: When you consider what an hour of your time is worth, it can seem like far too much of it is spent on conference calls and in meetings. Make these occasions more efficient by creating an agenda beforehand, setting a hard stop and sending round action points afterwards. Many forget that efficiencies can also be driven by using digital solutions to streamline meetings. For instance, using scheduling tools to automate calendar invitations to colleagues across time zones. Using video and audio conferencing to include more participants in discussions, and simplifying note taking with voice-to-text apps.
• Using Technology to Your Advantage: The right automated and cloud-based solutions can enable users to reduce time spent on unnecessary manual processes and paperwork, by syncing your Xero account with a range of purpose-built applications to streamline administrative functions such as payroll, inventory, CRM and data entry.
Bookkeeping data entry in particular, is one of the most time consuming practices to sustain due to the time and expense it takes to reconcile by hand. Whether all of your team share the burden or you outsource this function, it’s an inefficient and counter-intuitive process. However, technology provides a solution and with the right software you’ll be able to eliminate this process and automate the publishing of bookkeeping data entry into Xero. AutoEntry, a Xero app, helps users do exactly that, by capturing and analysing scanned and photographed bank and credit card statements, bills, invoices, expenses, receipts and more, automating data entry into a user’s Xero account.
AutoEntry helps users to work smarter with its broad range of features. For instance, AutoEntry captures tax summaries by default and if requested, full line item details including description, quantity and unit price. AutoEntry also remembers how users categorise expenses, such as the relevant supplier account, nominal account and tax code without ever creating duplicate supplier accounts or posting duplicate invoices in Xero. AutoEntry even matches invoices to purchase orders. You’ll also be able to pass on efficiencies to your clients, by enabling them to access their financial records remotely and upload paper documents such as bank statements, bills, invoices and receipts at their convenience via a mobile app.
Preparing for the future
It’s easy to be consumed with serving customers in the moment and meeting the deadlines of today, but it’s also necessary to plan ahead and ensure your practice aligns itself with the trends which will shape the industry in years to come.
Underestimating the impact of digital innovation is a mistake, and accountants should ensure they have the knowledge and the skills to effectively leverage technology to help them create a compelling value proposition and unlock new opportunities for growth.