Notes from the Field: The Future of Accounting

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I’ve had a busy spring, attending conferences, meeting experts, entrepreneurs and corporate executives—all trying to reach—and help small business owners.

This is one of a series of articles from my time in the field.

The Future of Accounting

By Rieva Lesonsky

When I was in college, accounting was one of those professions that seemed to be a safe bet for longevity. So many—consumers and businesses relied on accountants for their knowledge and skills.

But, last month at Sage Summit Atlanta, Sage released its annual Practice of Now report highlighting “a shift in the cultural landscape of the accounting profession driven by evolving client demands and the increasing need to adopt emerging technologies to remain competitive in the marketplace.”

In fact, 90% of accountants (globally) say they’re seen “a cultural shift in accounting,” which is “driving significant changes in hiring practices, business services and attitudes toward emerging technologies across the globe.”

There’s no need to panic, accountants aren’t going away. Rather clients are asking—and expecting more from their accountants: more services, more specialization, more skills. Globally, the Sage report says, accountants are already moving in this direction, offering more advisory services in addition to traditional accounting work. But in the U.S., 71% of accountants view themselves as “number crunchers” who are focused on reporting, not consultative work. Why do they cling to this rapidly outdated notion of their profession? Jennifer Warawa, EVP of Partners, Accountants and Alliances, at Sage says, “Many would like to offer more advisory and consulting services, but feel they lack the necessary time or skills to do so.” Plus, the Practice of Now report shows, they’re resistant to change.

But, says Warawa, accountants cannot maintain the status quo. “To bring the accounting profession to the future, accountants need to embrace the technology and training that will ultimately allow them to expand into a more consultative role. U.S. accounting firms no longer have the luxury of time. They need to adopt new technology and business models today, or risk being left behind.”

Next-Gen Accountants

Thankfully, things are starting to change. The Practice of Now shows U.S. accounting firms are starting to diversify their offerings. In one area—payroll services—they’re on par with the five other international countries in the study (Canada, United Kingdom, Australia, France and Spain).

In one breakout session at Sage Summit, three accountant business owners noted how they were embracing the future, offering more, niche services. Not so coincidentally all three went into business with their fathers. But, these next-gen accountants, notes Warawa, had dads who “got out of the way” and allowed them to do things differently.

Specialization Is the Future

The good news is those accountants are part of a growing trend. The Practice of Now shows 49% of U.S. CPAs think their firms will embrace more industry specialization within the next five years and 77% of accountants are “very confident” or “confident” about offering their clients more general business management advisory services.

It’s not easy to make the switch from “numbers cruncher” to business advisor. But, the accountants in the breakout session and Warawa agree it’s easier if you “focus on a vertical.” There are so many new apps being introduced, concentrating on a vertical makes all the new tech less overwhelming.

Nancy Harris, EVP, Sage North America says working in the verticals is more “sticky” for accountants.

Recruiting Employees

Most accountants realize they’re only as good as their employees. And so many (82%) are thinking about recruiting staff from a non-traditional background; 43% believe new accountants should “have industry experience outside of accounting.” Some of that experience encompasses “skill sets, such as technological literacy, relationship building and business advisory.” And many believe change is coming fast—62% say “today’s accounting training programs will not be enough to run a successful practice” by 2030—which is only 10.5 years from now. They expect training programs to be updated so accounting firms can innovate and “keep pace with evolving client demands.”

The problem, however, is that while they know they need to change their hiring practices, the Practice of Now shows only 30% have actively tried to diversify their workforce. Even fewer (28%) have a written diversity and inclusion policy, only 23% have offered training and a mere 21% have changed their existing policies and procedures.

Technology is the Future

At least accountants recognize how powerful adopting new technology can be—85% (globally) says accountants in their countries “need to pick up the pace of technology adoption to remain competitive.” More than half (56%) say new technologies will increase productivity and 27% say tech will save them time. And more than half are looking forward to adopting artificial intelligence (AI) applications as soon as they’re available.

But still, too many accountants and SMBs are tech-averse. They’re not quite ready to embrace the cloud—which is why Sage offers Sage50cloud, which “combines the convenience of the cloud with the power of desktop accounting software.”

One thing that has not changed is that accountants remain small business owners’ most trusted advisors. As Harris says, “small business owners don’t want to do accounting—their passion is their business.” And as accountants continue to embrace new technologies—particularly the cloud—business owners who are reluctant to move their accounting to the cloud—will feel more comfortable doing so. As Warawa says, “Business owners won’t argue with their accountants.”

The Practice of Now 2019 is available for download here.

 

The post Notes from the Field: The Future of Accounting appeared first on SmallBizDaily.

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