It has been said that change is the only constant, which certainly applies to the world of accounting. According to the annual Practice of Now research report commissioned by Sage, 49% of the 3,000 respondents have formally examined their business practices in the last year. The report interviewed accountants from the US, UK, Canada, Spain, France and Australia. This is an indication that many accountants are aware that they need to relook how they do business, but also that there are many who have not seriously considered how they will stay relevant in a changing business landscape. Adapt or die – harsh but true.
The state of the accounting industry An article published by benchmarking.com.au reports that the accounting industry was one of the first Australian industries to innovate online systems. In 1999, the ATO launched its first online tax submission for individuals, followed by the first Business Portal. Research by benchmarking.com.au has, however, shown that the accounting industry has lost its growth momentum and is losing its value proposition. They analysed a sample of 184 accounting firms across Australia and found that the average net profit for SME accounting firms in Australia decreased by 41% from 2013-2018. The Australian Bureau of Statistics reported that the five-year average annual growth rate of the accounting industry has slowed to 0.97%, compared to the Australian average of 2.18%. In order to remain competitive, accounting firms will need to diversify their service offering and revenue streams. Benchmarking.com.au identified three key success factors accountants will need to implement to remain relevant: Build customer relationships to increase customer satisfaction, invest in value added services and improve brand reputation. The NAB Australian Accounting Industry Survey captured the views of Australia’s accounting profession, as well as more than 750 SMEs across the country. The survey found that about a quarter of businesses don’t believe they have adequate levels of financial literacy to run their businesses and that accountants are considered their most important professional services provider. Accountants are seen as the most trusted profession when it comes to financial services (47%) and business planning (39%). With accountants holding such high esteem in SMEs eyes, it opens the doors for them to provide so much more than just looking after the numbers.
Diversify service offering
Although accounting and bookkeeping are still the primary service offering across practices worldwide, payroll, personal and corporate tax management, and compliance work are also part of the mix. Business advisory services and outsourced CFO function are likely to continue growing in popularity, as businesses rely more on their accountants for strategic input. Much of the change in the accounting industry is related to technology, with 85% of accountants saying that the profession in their country needs to pick up the pace of technology adoption to remain competitive internationally. A more diverse skillset will be required including not only technological literacy, but also relationship building, business advisory, and project management skills. According to the NAB Australian Accounting Industry Survey, accountants could potentially offer business strategy, legal services, technology and IT services, insurance broking, leasing, and insurance and property advice. An enhanced service offering will mean that accountants can charge more as they increase the value they add to their clients’ businesses. Aside from charging more, using technology such as artificial intelligence (AI) will bring staff costs down as time spent on automatable tasks will be significantly reduced. The more value they add, the more accountants will become trusted business partners rather than just replaceable service providers.
Automate fund collection
A report by Xero estimates that $115 billion in payments from large businesses to Australian small and medium businesses (SMBs) are paid late each year. Setting up automatic and digital payment methods will assist SMBs to collect the payments due to them. FlexiFund It is a fund collection software that will provide your clients with flexible payment options while securing the full payment for your professional services. The software automates your entire funding and payment process, allowing you to control more transactions in less time and with less effort. Your margins will be positively impacted as you maximise both time and money. Get in touch to find out more about FlexiFund It Fee Funding Software, a cloud-based, easy-to-use solution developed to serve accountants and accounting practices. P: 1300 850 890 E: email@example.com W: www.flexifundit.com.au