Future of accounting industry

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5th April, 2021

The future of accounting: Do the numbers add up?

Automation and technology are fundamentally reshaping the future of accounting work. So what does the future look like for the profession?

Everything from technology to work-life balance and more recently COVID-19 have raised questions about where the accounting industry is heading.

Some even question the future existence of accountants and tax agents as reporting becomes increasingly automated.

We asked several partners at top 25 firms and well-known industry observers about their predictions for the future of accounting in Australia.


Deepening trends: Less compliance, more advice


Complex regulations are undeniably an ongoing challenge for the accounting profession. Yet it also ensures an ongoing need for professionals who can decipher them.

“As long as the tax system and tax law is nuanced enough to require interpretation and analysis, tax and BAS agents will always be needed,” said The Tax Institute’s Robyn Jacobson.

Indeed, many inside the industry believe technological advancements will facilitate a shift from a compliance focus to a strategic advisory focus.

“I actually think AI is going to increase the value of accountants, because it will help them understand the technical answers to various tax questions faster; they can then focus more on the non-technical aspects and look at more scenarios,” explained Sholto Macpherson, editor at DigitalFirst.

Dubbing accountants “essential translators for the business community”, he suggested that a human mind is needed to understand the wider context of each client and their business: what’s happening in their business and their personal lives; their personal appetite for risk; their health; and how these (and other) factors combine to determine the likelihood of them making significant decisions, such as to sell the business or acquire a competitor.

“It’s not just a technical tax question, it’s an emotional and psychological decision that could have as much to do with a business owner’s capacity and skill set to manage any of these options,” he said.

Expanded advice will likely incorporate new areas of expertise, particularly for SMEs.

“As clients are becoming more sophisticated in their requirements, they’re expecting accounting firms to also have an expanded suite of services over traditional audits and tax advisory,” said Mazars Sydney managing partner Jim Mascitelli.

He points to outsourced payroll, virtual CFOs, HR and mergers and acquisitions guidance as services that will increasingly drive accounting revenues. Other emerging areas include cybersecurity, data capture and analysis, ERP consulting, IT audits and technology integration.

READ: The biggest challenges to growth in accounting


Expect more specialisation in accounting services delivery


While the list of potential advisory services grows exponentially, many suggest that specialisation will be key to driving growth for the industry.

“I think there is going to be an increase in the number of accounting firms dedicating themselves to industry niches – it would just make so much sense and you can see the success of that model if it’s done well,” said Macpherson.

“Having a long client list in one particular industry puts you in a position to offer more valuable advice just based on what you have seen.”

Others suggest that risk management will play an ever-growing role in the work of accountants, especially post-COVID.

“Businesses that were better planned, that had not just a strategic plan but a risk management plan in place, understood their supply chain, understood the issues of their customer base and the key dependencies – they certainly weathered the storm a lot better than those businesses that didn’t,” said Andrew Graham, managing partner – Brisbane at RSM Australia.

“For those businesses that perhaps didn’t have those things in place, it’s certainly front of mind now.”


Competition for talent set to rise


A greater emphasis industry-wide is needed on not just attracting but retaining people within the profession, suggested Graham.

“If you’ve made the career path clear to your people, you’ve got the right development and learning platform in place, then it’s about keeping people,” he said.

“We’ve really focused on that through employee engagement, through having first-class training and development and regularly undertaking both formal and informal NPS engagement scores for our people to understand what’s important to them.

“Also just simple things like one-on-one catchups with partners, to see how they’re going and spending time with partners and senior people. It’s basic stuff, but it’s important.”

Interestingly, the effects of the pandemic also highlight some potential solutions.

Lockdowns forced practices to facilitate remote working. If retained longer term, it may reduce the number of people leaving the profession in search of more flexibility and work-life balance.

Meanwhile, Macpherson suggests this shift will cause firms to look more seriously at offshore teams.

“If you’ve got staff working from home, then it makes you ask the questions: ‘should we look at hiring cheaper staff elsewhere?’ and ‘if we’re going to go to remote staff, how remote should they be?’.”

READ: Hidden opportunities for growth in accounting


Safeguarding the ‘trusted advisor’


Many senior figures within the industry are keen to strengthen the accreditation system alongside ongoing professional development, to further enhance the trustworthy and reputable reputation of the profession.

“[We have proposed] an accreditation scheme for tax agents who are well-behaved and have proven tax compliance for the past three years,” said Jacobson.

“This kind of scheme has merit, because it would allow clients to better identify the tax practitioners who are consistently committed to good practice.”

Meanwhile HLB Mann Judd managing partner Tony Fittler pointed to the idea that actions tend to speak louder than words.

“One of the things that I think the accounting profession needs to be careful of is in relation to tax advice. There’s been some damage to accountants by being seen to be involved with aggressive tax schemes,” he cautions.

“And it’s certainly the case where people are either advising or involved in dealing with clients’ money. Sometimes that can go astray.

“Thank goodness there’s not too many cases of that, but it is one of those things that does affect the whole profession.”

Nevertheless, what the industry agrees on most is that clients will always need a trusted advisor.

“I don’t think that can ever be replaced by digitisation or IT,” concluded Mascitelli.

“I’m pretty sure our firm in 10 years’ time is going to be a lot different in how we produce and deliver services to clients.

“But what won’t change – and will potentially become even more of a service we can provide – is being a trusted advisor, where the client knows that we know their business and more.”

The overriding sentiment in the industry is that the role of accountant as trusted advisor isn’t going anywhere in a hurry.

At the same time, there’s a clear need for such advisors to have the right tools and processes in place in order to enhance the speed and volume of the delivery of services now and into the future.