International Accounting Bulletin 2017
Posted on 6th December 2017 in Advisory
Written by Freya Hughes
International Accounting Bulletin sees insightful and thorough research, as they report the peaks and troughs of different sectors within the industry. Covering fees, growth, staff, auditing, tax and, of course, advisory, there’s a wealth of information available to take away from the report. Here’s our breakdown…
Embracing advisory services is a surefire way to stay one step ahead of competitors.
There’s a wealth of evidence, from our customers and further afield, that putting emphasis into educating clients, as opposed to simply keeping them compliant, will see an increase in revenue for both parties.
Using advisory platforms means saving time. With this saved time comes quicker delivery of services to clients. It’s certainly a win-win, which is reflected in our round up of the key takeaways from this year’s international report.
Advisory services grow
Firms are starting to make more cash, and the biggest earners are those rolling out advisory. Clients are increasingly expecting value-added services from their accountants, and with this way of working comes a rise in client satisfaction.
Tech is making processes quicker than ever, so you’re given a lot more time to serve clients and help them to grow their businesses – it’s not just about being compliant anymore.
There are new things to be wary of – and to embrace – as clients will have cross-border activities. This has resulted in growth in transaction advisory, as the implementation and integration of tech had created a much more streamlined way of working, globally.
For example, Fresh Financials’ Emma Fox told us recently that the tech she’s using means her client meetings have become much more valuable for her bottom line – and for the enjoyment of her day to day:
“Because we’re not spending much time getting the information into Xero, we’ve got the time to spend with our clients and do more in-depth processes. We’ll sit and have a chat, discuss things and look at the data together. It’s much more fun!”
Fees are climbing
The number of firms reporting a dip in their fees has significantly decreased since 2015. This is detailed further in the ‘Growth’ section below.
Because of economic shifts aligned with political changes, many firms have found their income has been impacted by the strength of the dollar. This has slowed growth to a point.
While this will certainly impact US firms, further afield fees are booming.
In Tasmania, Nicolette Quinn’s firm Savvy CFO now follows set monthly billing. She told us that she has noticed that being upfront with billing comes with benefits:
“I also bill in advance. […] separating the payments and the service means you enjoy the service more! It’s like when the bill arrives at the end of your fantastic dinner it makes you feel a bit less happy, but if you’d pre-paid for that dinner, you’d have loved it even more!”
Likewise, EzyAccounts Australia’s (a franchisee modelled firm) Colin and Oliver Hunt tell us that signing up with FUTRLI has had a positive commercial impact:
“Aside from churn, which means FUTRLI has more than paid for itself, we’ve increased the average fee income per client.”
Growth affected by societal shifts
Growth has been impacted generally for businesses and practices because of political and societal changes, which include increased regulation, increased public scrutiny, Brexit, the US elections, and technological challenges.
The trend of organisations making strategic acquisitions to strengthen capabilities (such as employing more technologically knowledgeable professionals) and streamlining their management teams still continues.
Staff need upskilling
There’s an urgent need to upskill staff because, as advisory is on the up, skillsets need to broaden.
Fresh talent is also needed, as existing accounting professionals need to ensure the industry is presented as attractive. They list the key ways to make sure that younger generations, or career changers are considering the industry for their work,
But why is this so important?
Firms committed to growing and developing their staff, and providing flexibility for their teams so their work-life balance is even, means that they’ll have the upper hand in the market.
Savvy CFO are one of the first to complete FUTRLI Advisory Certification. As the only forecasting and reporting software with a CPD-accredited training programming, we’ve married the learnings of the software with a strategic action plan to launch. Nicolette tells us after being a CA, CFA Charterholder, and completing Xero advisory training, she’s still learnt a lot:
“I came out of FUTRLI Certification thinking this isn’t just a piece of paper – I actually have some skills coming out of it that I didn’t have before.”
The FUTRLI Advisory Certification course will guide you from the basics of forecasting, right the way through to internal and external implementation.
Auditing impacted by technology
Enhanced reporting, technological developments, and fee fluctuations are impacting the industry now, and the trend will continue.
A known phenomenon in most, if not all, industries is the disruption of the norm because of technological development.
AI and automation have revolutionised our lives. Anyone using cloud-based software will concur that it allows companies to evolve. But, it also means that older and more traditional practices are declining, and in some cases becoming extinct.
It’s best to embrace technology – it’s not going anywhere after all – but it’s important to not become a software reseller, instead focusing upon educating your clients and your strategic skillset. The ability to navigate the upsides of the changes is crucial to keep up with the businesses that are embracing them.
Keep watch over coming tax reforms
Those of us that can bear to watch or read the news will be very aware of the impact political change is having on the world of taxation. Brexit and the US elections have shocked the entire system.
Overall, there’s an increasing focus on international tax compliance, particularly for large corporates, and a continued move towards transaction based taxation.
Keep the following in mind for the coming year:
- High VAT complexity.
- India introduced a goods and services tax (GST) in April 2017 and others will follow suit. This is reflected in the ongoing trend for governments to look towards transaction-based taxation as a means to boost revenues. In the Middle East this trend is particularly strong, with both the UAE and KSA implementing VAT in 2018.
- EU’s implementation of domestic law changes under BEPS starts in 2019 as the Anti-Tax Avoidance Directive comes into action.
Global eyes will be on the potential tax reform in the US, combined with the global trend for governments to reduce headline rates for business. There’s also much debate around tax regimes: repatriation and worldwide versus territorial tax regimes. If the US changes its tax regime, it remains to be seen how US-based multinationals will act on this.
In the UK, multinationals will be eager to plan for prospective changes following the government’s notice that the UK will leave the EU. It’s an unpredictable time, yet it’s an interesting story to watch unfold.