FAILURES to adapt to new technologies, regulation and competition are holding accounting practices back, according to the ICAEW.
The institute, which this week launched its Tomorrow’s Practice drive in order to support members seeking to innovate, identified four key areas of change affecting teh profession – technology, competition, regulation and client expectations.
Competition from consultants, professional services firms, and the internet could threaten firms’ position as trusted advisers to clients, while technology has made basic accounts preparation and bookkeeping easier for businesses.
This week, Accountancy Age’s guest writer The Practitioner raised concerns that major accounting software providers may render some accountants obsolete, something refuted by Xero’s managing director Gary Turner.
In 2011, an ICAEW IT faculty survey found only 3% of practices were using cloud accounting. Today, the ICAEW said, adoption is “increasing at an exponential rate”.
“The transformation taking place in the accountancy industry right now is being driven by the advent of cloud technology. This not only makes it easier for accountants to get a complete overview of their clients’ finances in real-time, but also to collaborate more closely with them and play more of an advisory role; something we know that small businesses are increasingly coming to expect,” said Rich Preece, vice president and country manager of Intuit UK.
At the same time, changing audit rules, the evolving pensions landscape, and new opportunities in legal services will require accountants to develop new propositions. Clients expectations are also changing. Companies want a ‘one stop shop’ for their business support, so accountants will “need to think about how they can play more of an advisory role”, the institute said.
According to ICAEW president Arthur Bailey, firms must evolve and innovate if they are to survive. “Our members should consider how they will react to changes in the marketplace and provide the added value clients are demanding,” he said.
“This could mean firms specialising in a particular area or providing additional services that make them indispensable to the businesses they serve.”