This panel included:
If you missed the live webinar this blog will bring you up to speed with the core predictions for 2018. Please note, this webinar has been edited for clarity and length.
You can watch the full recorded webinar here to see what else our panel discussed.
Gary: There’s a quote from science fiction author, William Gibson, which comes to mind: “the future is already here – it’s just not very evenly distributed.” This uneven distribution will increase as we come accustomed to learning and as we learn the point in utilities and embrace then harness it. Another year group will retire and another generation will join the workforce. Attitudes will evolve in favour of new cloud products and services, so there will be no more running businesses on spreadsheets.
Gemma: I think there will be an increase in business support – clients want a lot more from an advisor, not just bookkeeping but getting them into the cloud, to develop a scalable platform.
Jeremy: Accounting firms need to think about how they use technology and the cloud. Believers in cloud technology will organise themselves either around using a technology for efficiency strategy, or using a technology for engagement strategy. In both cases, all accounting firms will be looking more closely and asking to what extent can their people deliver on either of those promises and asking, “If we have certain areas of expertise and capability, what more can we get access to?”. This may see an increase in collaboration, with accountants seeking to unlock value from other areas within and beyond their firms.
Gilad: Firms will be using technology as an enabler to focus on the value of services, and serve strategic advice.
Gilad: Open banking is really the most significant change in the last 150 years. It won’t happen overnight, but through 2018 more products in the market, we haven’t seen before and accountants will play a significant role in how clients choose services and tech.
Gary: In 3 or 4 years, we’ll look back and struggle to imagine how we existed without open banking. Digitising makes things completely fluid, for example when making payments. This is the dark ages of banking, as open banking is huge.
Gary: Education and skills is a big one. HMRC Making Tax Digital, modern cloud tools and security means a huge confluence of new things SMEs will go to for guidance. Accountants will be thinking about how to help and advise SMEs and make money out of that. Traditional accountancy is expanding to encompass data compliance, advisory, skills and education making people up to speed, hiring. New skills into a firm is the huge key area. If you’re not ahead of this in the next 12 months you’re going to be left behind.
Gemma: We’ve noticed a shift in clients asking us why accountants aren’t using QBO/Xero, and they’re driving those changes. In Propel by Deloitte, you have to move to the cloud. There have been lots of demands for advisory services, so accountants have to become much more clued in about the cloud and apps. They need to be able to suggest a tool that can access real-time data. People need this, so should us cash flow forecasting using AI to mitigate risk. Like how using Futrli delivers insights to grow and spot risks.
Gilad: I think it’s a mindshift of dealing with technical aspect, accounts, tax returns Stating obvious, accountants have to take a strategic role and build more services powered by tech. Positioning themselves differently is key.
Jeremy: People need to build out their interpersonal skills to understand business owners’ problems in order to help them. Firms looking to be successful will look at the types of markets and clients they want to be dealing with, and then build out their skillsets and capabilities. There needs to be planning to get accountants to where they need to be to deliver business advisory, and there need to be incentives for the innovators within firms who are adopting new ways of working. There is a lot of change happening in the UK at the moment (Brexit, etc) and so accountants who want to be successful in 2018 need to help clients pressure test their business models.
Jeremy: We’re all in the professional services business, and if we didn’t service well we wouldn’t thrive. At BDO, 86% of our clients would recommend us as advisors. But, firms need to adapt to the new economy. Clients are a lot more self-sufficient and discerning about what they want help with. To continue to provide service excellence, accounting firms will need to take a look at their people. Firms that are going to be successful in 2018 are going to get clear on the new roles that are required – transitioning clients to new accounting platforms and helping clients to think about their business strategy and business drivers. This presupposes that firms are considering the new career paths that will exist in order to achieve good client service. Exposure to business development and business advisory pretty much needs to happen from day one in a new accountant’s career – to give them the interpersonal and technical skills required. Firms will also need to determine which markets or industry verticals they want to focus on and what skills those clients are looking for, and then audit their people against those skills to determine training gaps or recruitment opportunities.
Gemma: There’s two angles. First is how we use tech for clients to grow, one-off projects, apps, integrations, invoices – streamlining and picking better apps. How we use tech internally to improve customer experiences, Deloitte is traditional at its core and we struggled with sending 35-page startup letters to clients, paper invoices etc. This year we’ve revolutionised the way we work, using direct debits GoCardless, e-signing – it’s so quick. We get our team familiar with the tools, all of our team are continually learning. Create a best in breed portfolio and use that across the team with experts to help make it seamless.
Gary: The robots are coming so you’re right to fear! Certain aspects of accountancy will be better done by computers, AI, machine learning, and automation. That’s too simple though: if 90% of what you do could be automated, then look at what you could learn next. This is the latest chapter in a long story and is inevitable. Accountants have a decision to align against tech and hope to slow it down or accept and harness tech and change in the next 10 years. Who wants to be the last analogue practice in a digital age? Combine digital efficiency with a human aspect and you’ll be much more attuned to people in business, and customers.
Gilad: Walking through the standard checklist auditors use, blockchain could eliminate 95 – 99% of things we do today.
Gary: Someone comes up an with idea and it’s labelled as a solution for no problem, like blockchain. As we become more digitally aware, we’ll be able to harness it more effectively. Blockchain is future tech and we’re trying to work out what to do with it.
Gemma: We realise people are moving away from the idea of accountants, so we call ourselves finance experts. People want advisory to help take care of admin, and compliance, but mostly they want a growth partner.
Jeremy: You don’t need to rebrand, but you can add to your brand. People still need tax advice – tech isn’t interpreting tax laws, so you still need an accountant. There are other things in the mix though. Get clear on the blend of skillsets, solution or business advisors, but the core is to understand what your clients need. Some firms have rebranded to stay current but its been unsuccessful, because their clients just need accountants. You could set up a sub-brand for a specific market opportunity, so there’s a mix – understand your clients and niche well and design it around their problems.
Gary: You have to have that core anchor identity. Rather than coming up with new names, change expectations of what it means. In 10 years the trick will be to redesign what people expect. Behaviours will change, not recommend changing names or denying accountants. Change the value, don’t change the label!
Jeremy: There’s a lot to be said about how the accounting profession is interacting with educational institutions. It needs to focus much more on entrepreneurial type thinking, more than the core of credits and debits. The accounting profession needs to communicate with institutions, and say this is what we expect and we need to have universities help to get us to that point. From a talent management perspective, what does your client need? Are you people willing and able to deliver? Recruit if not, as training is a slower burn.
Gemma: We needed accountants at Deloitte, as they helped with our delivery model. It’s always important to upskill in advisory services, leveraging what we have and what’s out there to upskill our team.
Gary: 10 years ago outsourcing was to another company or country. This concept of flexibility and liquid workforce means firms can hire a whole generation of people who they couldn’t before because of location, and working hours. You can absolutely do that much more readily with the cloud and modern tech, helping even the smallest firms. Much more flexible working options means it’s more insourcing, bringing more value than you would have had in the past.
Gemma: Facetime is really important to our clients, even if it’s not in person, video software does it. As long as you have a good relationship it’s not an issue.
Jeremy: Business modelling and cash flow forecasting. This new economy brings a lot of opportunities for business owners to understand their business drivers. If a business is looking for a trade sale or private equity, you need to have a good business model.
Gary: The trick is to not convince customers to use cloud, but show the value you can offer with services enabled with cloud accounting software.
Jeremy: Work backwards – what management information does the client want to see in the end? You can’t get timely information from desktop software, so what is the right solution? The cloud will be, often, not just for SMEs but also for larger businesses.
Gilad: It depends on regulators, if they find right balance between benefit and value of crypto, to the risks. Controlling cryptocurrency is a major challenge, and it will take time. At the moment regulators are on the fence trying to shape a strategy.
Gary: How many accounting firms have adopted cloud tools? The majority. How much extended use of that is the real question – we’re still really early on in that journey. Growing number of firms that get it and reconfigure the way they talk about cloud are in the minority, but that will change quickly in 5 years. Firms harnessing tech and apps are more profitable, winning more customers, hiring great teams and retaining them. If you’re not using tech, younger accountants will not stay. The genie is out the bottle and in the next 5 years, adoption and utilisation will be normal.
Gary: I think compliance, GDPR, and open banking. The need for practices to scale up and be ahead of the game. Everything’s in the cloud now and the whole network is moving on, so practices need to be abreast of all that.