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5 Key Trends in the Accounting Industry in 2023

5 Key Trends in the Accounting Industry in 2023

 

Having worked in the accounting industry for well over 20 years, I’ve always found it beneficial to have a focus on emerging trends and technology. Ideas that lack practical benefit tend to fall quickly by the wayside but those that are successful can be extremely profitable for the firms that embrace them. Below is an overview of what many regard as the key shifting trends in the Australian Accounting Industry.

1. Embracing Hybrid Work

Covid introduced the accounting industry to the remote workforce and some firms have never gone back, others have partially but still maintain a hybrid environment. According to the latest Hays Salary survey 82% of employers still embrace a hybrid working environment and 30% offer fully remote roles. There have been both positives and negatives flowing from this transition. Most firms using hybrid working or complete remote working environments report higher levels of productivity for their team members. However, there is evidence that it may limit on the job learning because staff feel it’s more invasive to send an instant message than to simply lean over and ask a question to the person sitting near you.

Examining many of the issues raised around work from home, it is arguable that these could be managed effectively through adopting better technological solutions with a long term focus and shifting staff attitudes towards proactively embracing these solutions. Referring back to the example above of staff not wanting to send instant messages frequently, by encouraging staff to engage in this manner we can overcome any misconceptions they have and also demonstrate that the end result can actually be better: with a permanent reference point for the solution provided which they are also able to share.

2. Embracing technology to expand service offerings

As the invention of computer tax lodgement exponentially increased compliance work output (not to mention lodgement turnaround times) in 1990, further developments in technology in more recent years have seen the firms that embrace them able to rapidly scale and expand their service offerings. From automated processing solutions to cashflow forecasting and even quality assurance tools that can scan client files for errors in a matter of minutes.

While tech stacks are a major contributor to scalability, there’s definitely not a one-size fits all solution. Some technology is only beneficial if you can leverage a new service offering or improve an existing one. The firms that implement effective tech stacks to scale their business, do so from a strategic standpoint, analysing profitability and how to best adapt these to both their firm’s business model, and customer base.

3. Building a Global Team (Outsourcing)

As an accounting firm, if you aren’t already using outsourcing to scale your business effectively, you may want to consider that some of the largest and most successful firms in the industry have been for years. According to reputable industry surveys like the AFR ‘Top 100 Accounting Firms’ and Wolters Kluwers ‘The Client Centered Firm’, the number of firms utilising global teams is only increasing.

Accounting firms using outsourcing models effectively don’t just simply hire the cheapest providers, like any business decision it’s about assessing options and utilising the service that is the best fit for your business model.

Among outsource providers, various business models exist. Some only offer staff on a full-time basis, others offer task-based billing, some provide staff with a base level training in Australian accounting, others expect you to train your team members from scratch. As well as training and the payment of fees, there’s a myriad of other things to consider. Ethical issues and data security are at the forefront of most debates around outsourcing and both APES and TASA have fairly stringent requirements around these matters.

4. Data Security

With the requirements under TASA & APES to protect client confidentiality in accounting firms, there has always been a strong focus by accountants in relation to data security. However, it has been brought to the forefront of everyone’s mind through recent breaches involving large corporations like Optus and Latitude (GE). The software, services and the processes we use for control and risk mitigation has become even more vital to ensure clients’ data is safe. Accountants simply don’t have the budget for data security that some large corporations do, yet they hold some of a client’s most valuable personal data.

As accountants, we have to leverage systems and processes developed by third parties to create cost-effective measures for keeping our data safe. Using systems that are ISO 27001 compliant is necessary for ongoing data security and should be the absolute minimum standard we are looking for. It’s the same when working with third-party service providers, it’s pointless to have all these controls in place if the client’s data is still accessible via that third party that does not have the same controls.

5. Automation & Machine Learning

Automation and machine learning can take away the need to do many menial repetitive tasks or it can be used to ensure ongoing file integrity by firms. Tools that blend more traditional digital time-saving technology like OCR can be further refined with machine learning to extract extremely accurate information.

While many firms have in the past embraced outsourcing services to take on their repetitive process-based tasks, automation has added an opportunity to add a further layer of productivity by using automation to remove the most menial of tasks. Practices are able to get better value out of their outsourcing teams with the ability to allocate them more high-value tasks and develop their skill sets in other areas, which in turn allows them to scale quicker and focus on more complex profitable areas than just traditional compliance work.

Understanding emerging trends and how they relate to your business and your customers can add real strategic benefit and long term growth to accounting firms. Assessing how these evolving trends fit within or can be adapted to your business requires an analytical and long term view while occasionally thinking outside the box, it may be that a number of these tools used in combination gives the most long term growth opportunities for firms. Firms who are lagging in embracing emerging trends put their own market share at risk both with existing and new customers, convenience and efficiency being at the forefront of most business owners’ minds.

About the Author
Daniel Harrison, Technical Lead- Accounting
Daniel leverages his extensive experience in the Australian accounting industry to advance our accounting and bookkeeping offerings.

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