In recent decades, we have seen many significant drivers of change in the accounting industry. Accounting firms are being forced to become more streamlined while digital transformations are accelerated.
We've seen the adoption of a more globalised workforce with remote and flexible work options becoming more acceptable and technology and automation eliminating time-consuming, repetitive accounting tasks. The accounting industry is changing for the better.
This article will explore current trends in the accounting industry, how these changes affect the accounting sector, and how firms can leverage these disruptors to their advantage.
A remote accounting workforce
Having the office just a few steps from the bedroom means fewer hindrances to work tasks. An accountant working from home has no lengthy commute, unnecessary meetings, and fewer opportunities to waste time with other staff members.
That saves firms an incredible amount of money and has increased productivity. Remote employees work an additional 1.4 days (cumulative) every month, or an extra 16.8 days annually, than if they were working in the office. The drawback is increased burnout, with finance and accounting forming part of the second-most susceptible sector behind marketing and communications.
After COVID-19 made remote working mandatory, we witnessed a blurring of lines between work and home, making it harder to disengage from work psychologically. That's why leadership needs to monitor staff and maintain the lines of communication so employees do not feel compelled to work longer hours.
Managing a remote workforce
Unlike other industries, the accounting profession needs the right digital tools at its fingertips to perform many accounting functions. Here's how good accountancy managers are tackling remote work:
- Setting expectations: Client demands and deadlines continue even if people are now working from home. That's why managers must set strict expectations, deliverables and responsibilities for their teams – and enforce them.
- Giving them the right tools: Prepared firms will have contingencies for employees working away from traditional accounting office setups. Cloud-based accounting practice management software, videoconferencing tools, and regular contact will ensure everyone knows their day-to-day operations.
- Collaboration: Many workers experience ongoing remote work difficulties, such as technology teething issues and dips in productivity. Good managers schedule regular catchups, keep the lines of communication open (whether on the phone or via office chat software) and encourage greater team collaboration while everyone is working remotely.
- Trusting in their abilities: One of the most significant indicators of micromanagement is an inability to trust staff to do their jobs sufficiently. While it may take a while to become completely comfortable with remote management, giving your people the cloud-based accounting practice software they need eases that transition while allowing management to track, learn and set new processes in place.
Talent acquisition opportunities
By 2025, it is predicted that millennials will represent 75% of the working population, which means that accounting firms' expectations will continue to change, forcing them to reassess their traditional accounting processes.
There is now a need to strive for better work-life balance for Gen Z and millennial accountants, so offering flexible and remote working options will attract the most suitable candidates and keep them developing within their roles.
This approach opens a world of new hiring opportunities and challenges for the human resources department and hiring managers, one where the talent pool is more globalised, and firms can compete for the best accounting professionals without regional boundaries.
There's no denying that increased competition means candidates are more discerning with their employment choices. Previously, accountants and bookkeepers seeking new job opportunities may have stayed in their current positions because employers could pick and choose the best talent on their whim.
But it's not all bad news for employers. Thanks to our hyper-connected digital world, many firms look further afield than their backyard. Normalising remote work has been one of the most important trends in recent years. It means new staff can be hired interstate or internationally, onboarded, and given tasks without setting foot in head office.
For more information about alternative hiring models, refer to our article comparing accounting outsourcing to hiring an accountant in-house.
Potential threats to cybersecurity
In recent years, the latest accounting trends in the workplace include bring-your-own-device and cloud migrations, which have caused major headaches for an IT department.
Now, with remote work allowing employees to conduct business from home, no matter their proficiency with accounting software, it's raising alarm bells that malicious cyberattacks and financial data theft could become more frequent.
It's hardly surprising that this is one of the key accounting trends when we consider that the accounting industry forms part of Australia's sixth most targeted sector, with 4.7 per cent of all cyber-attacks compromising the financial information of accounting firms' clients.
From phishing scams to identity theft, a whole faction of bad actors out there sees the increased adoption of remote work in accounting firms as an opportunity for their financial gain.
Here's how businesses can guard against attacks in the age of remote work:
- Update your cybersecurity policy and communicate it to everyone in your firm.
- Create a set of standards for remote workers and use security safeguards such as multifactor authentication and biometrics to ensure the person accessing sensitive company data is who they say they are.
- If necessary, nominate a manager for cyber incidents and bolster your IT team.
- Continually update company devices and download the latest security patches.
- Ensure staff only use company-approved devices to access work data.
Download our employee checklist for a detailed look at how you and your accounting firm can protect your technology from potential data security threats.
The role of accountants and clients in meeting new demands
External factors such as the economy and rapid industry changes create the most disruption. Still, customers are finding more excellent footing because sectors like accounting are becoming increasingly competitive.
As firms saw their staff move to work-from-home restrictions during the pandemic, clients were in the same boat. That means as we have shifted to accommodate a more remote-based workforce, firms must adapt their communication methods and collaboration with their clients.
That could be anything from videoconferencing meetings rather than face-to-face interactions to making more frequent contact with clients if they suffer due to our current cost-of-living crisis affecting their finances. There must be a shift in how firms work to serve their customers.
Flexibility and agility are key to top accounting trends here. How firms respond to arising uncertainties and how they read their clients' satisfaction will directly impact how solid or fragile that accountant-client relationship becomes.
Firms must also consider having a well-defined client profile to understand the type of client that best suits their practice from a profitability, lifestyle and business continuity perspective.
Monitoring business advisory trends
With the ever-evolving needs of clients demanding more from accountants, practices that can manage their traditional revenue streams in compliance while expanding into business advisory services are reaping the benefits.
Post-pandemic, business advisory has become one of the most in-demand accounting services. Our recent study into advisory and analytics services showed that the client demand for expanded, value-added services such as business advisory has surged recently, with almost 9 in every ten practices saying that their clients expected these offerings.
This is because advisory services are far more profitable while compliance is decreasing. Accounting firms that recognise this accounting industry trend and appropriately invest in business advisory may come out on top.
Accounting practice management software provides unmatched benefits
Engagement is critical for firms moving to a more remote-friendly workplace. More accountants should have the new technologies and the wellbeing support from their leaders, but they must also have the right technology at their disposal.
Firms need a solution that bridges the office gap and allows leaders to foster greater collaboration while deploying more flexible work practices. How? Practice management software.
According to our recent study, 79% of Australian firms currently use practice management software. Accounting firms wanting to gain a more significant market share, be more competitive or attract top talent need to embrace all the benefits this technology can bring.
Workflow management software, for example, is an area in which 51% of accounting practices feel they need more visibility. This software enables accounting work to be more productive and efficient, contributing to practices' ability to meet and exceed their revenue targets.
The future of accounting is here
Digital transformation, hyper-connectivity, a more globalised workforce and fully cloud-based accounting practice solutions are driving the future of accounting. Firms can either respond to these biggest accounting trends and leverage the benefits to make life easier for accountants or stay rooted in their old-fashioned way of operating and slowly succumb to the death of traditional accounting.
Change is hard. But staying the same is even more challenging. Keeping abreast of current trends in the accounting industry may take time, but the best time to start is today.