Stop listening and do something!

Stop listening and do something!

Luke Hamm, chief executive of GovGrant, says that accountants should seek out technology to help deal with the evolution of accountancy, rather than avoiding it.

Stop listening and do something!

Accountants need to embrace technology in order to set themselves up for future success, according to research commissioned by GovGrant.

The survey collected 155 responses from financial professionals and those adjacent to the industry and found that the majority (57%) of respondents were optimistic about the future of accountancy.

The report also showed that 64% of the industry expects to grow over the next year, with only 8.7% expecting their income to decline.

Overall, the outlook of the industry is positive. However, technology continues to be a sore spot in the sector, with those surveyed worried about tech’s self-service capabilities (37%), it leading to increased competition (31%), and furthering the industry’s skills shortage (28%).

As the accountancy industry changes, accountants will have to adapt to a changing profession.

Compliance is a good example, explains Luke Hamm, chief executive of GovGrant. “Accountants have the opportunity to think about compliance differently and shift it away from being a tick-box exercise towards one where it delivers real value to a client,” he says. “There’s definite benefit from taking a wider, holistic view, and technology can help with that. The tools are there to deliver real-time data, for instance, which can help with compliance. But there’s so many more ways customers can benefit from this information, if the conversation is taken to the next level and accountants start thinking about service, not just compliance.”

Hamm admits that some clients don’t care to know more than they currently do when it comes to their accounts, but this shouldn’t stop accountants adopting this new ‘service-first’ mindset.

“Compliance is often viewed as a prevention mechanism, but the actual ethos of why that compliance sits there is usually good intent,” Hamm says.

“Organisations want accounts to be registered, not just because it makes information publicly available, but because there’s a lot you can learn in that process. That’s where the value of a good accountancy partner really comes to the fore. The old mantra that an accountant shouldn’t actually cost a client, because they’ll deliver so many benefits, perhaps rings more true than ever before. Again, technology comes into play here, because if an accountancy firm can bring data analytics into play, or automate repetitive tasks through RPA, it frees up staff to add more value to their client relationship.”

Refocusing on R&D

Hamm also believes that more importance should be placed on research and development (R&D) within accountancy, as 51% of respondents said they either do not provide R&D services, or believe that there is no client demand for it.

“One of the best things about identifying R&D is you have to ask some difficult questions about the business,” Hamm comments. “You have to get into the weeds of what people are up to and what they’re doing – now that’s surely a useful thing for a business advisor to have and to use.”

R&D services can also deepen the accountant-client relationship, according to Hamm, and is a huge area of opportunity for accountants.

He explained that accountants should be ready to talk to their clients pre-emptively about R&D tax credits and advisory services – all of which are becoming major market areas – but to do this effectively they need to be prepared.

“For me, it’s about partnerships,” explains Hamm. “There’s the client-accountant partnership and then the accountant-service provider relationship. If an accountant tries to speak to a client about R&D tax credits and they’ve never done it and they’re ill-prepared, it can only end badly.

“On the other hand, having the ability to be confident and say, ‘Look, it’s not my area of expertise, but go and speak to these guys or that firm down the road can help you there,’ goes such a long way.”

Placing importance on revenue

As touched on earlier, Hamm sees some real benefits from technology and real-time information. Thanks to digitisation, accountants can keep up-to-date with their clients’ revenue streams and pass that information on in real-time.

However, with nearly 41% of those surveyed afraid of being replaced by technology, and a further 30% worried about keeping up with related technology, the industry has been slow to embrace this method of revenue reporting.

In Hamm’s view, this is simply an attitude that needs to change within the industry for the sake of its clients.

“There’s an entrenched mindset that means the default position is to deal with tax, for example, at the last possible minute,” he says. “As an organisation you have to pay tax, and that organisation can earn interest on that tax revenue, so they hold onto the money as long as possible. Why wouldn’t you? You have nine months to file your accounts, so you take nine months.

“I think that’s absolutely crazy though. As an accountancy firm, aren’t there times your client could benefit from having information earlier? For example, by dealing with tax much faster – even in real-time – couldn’t you be getting a claim for tax relief into HMRC earlier?”

Be pre-emptive

Looking ahead to 2030, only 10% of respondents think that accountancy will stay in its current form. A further 45% believe accountancy will have an evolved business model, while nearly 23% believe accountancy will become an online-first virtual service.

Instead of waiting for the industry to change, Hamm recommends firms prepare themselves early and take the first steps towards embracing technology across these sectors.

“Let’s acknowledge that the accounting industry tends to fit a demographic that isn’t particularly aligned to the millennial way of working,” Hamm said. “That’s a very critical way of saying that it will take time to almost get over that cynicism of technology or risk. People don’t want to get it wrong. So, for these people, trusting the box on the side, or dialling this thing called the Cloud to do something they’ve spent 20 years perfecting, does feel quite intrusive. And gaining that trust in the infrastructure in which you as a firm are investing is a difficult line to mentally cross. I can totally sympathise with that.

“At the same time however, if you as an accountancy firm weren’t thinking about that risk, and you were engaging with your clients more, offering more services that utilised the benefits of technology, you can bet your bottom dollar that your clients will value you more and pay your invoice every month.”

GovGrant’s research indicates a lack of forward inertia within the industry, but an expectation that things need to change to bring future success.

In Hamm’s view, the answer isn’t simple, but can be summed up as: “Stop listening and do something!”

For more insight on the skills and expectations for the accountancy firm of tomorrow, click here to read the full GovGrant report for free.

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