Posted on Jan 19th, 2023

When I sat down to reflect on what’s happened over the last few years, and what is yet to come, “expect the unexpected” is probably the defining characteristic. Teasing out accountancy trends in such an environment can be challenging.

Jolts aside however, the accountancy sector continued to operate largely as expected with some themes enduring into 2023 amid some new ones topping my list of predictions.

A more international focus

2023 will present an extraordinary opportunity to those eager to capitalise on international relations.

The accountancy sector is undoubtedly feeling the pinch of staff shortages, as personal and professional challenges intersect. The pandemic drove enhanced focus on work-life balance and mental health. Now, the cost-of-living crisis and inflation are driving further change.

We are already seeing the initial signs of a rise in offshoring – moving select accountancy functions to overseas providers – with a growth in demand from providers keen to undertake our accreditation standards, aligning their employees and agencies with our UK tax and law.

Accountants are already turning to this international labour pool for additional resource and the good news is that these providers are primed to offer an affordable, reliable resource with immediate capacity. This in turn frees up UK accountants to focus on strategic guidance rather than day-to-day delivery.

I also expect this international focus to fuel further domestic change, including small firm mergers to better meet client needs, and investment in training and upskilling with a focus on critical thinking, interpersonal communication, and leadership skills. This together with specialisation will help maintain and secure the client base.

The reality of supply chain insecurity meanwhile will play on the minds of business leaders for many years to come, and if they haven’t already diversified or moved, many clients will want or need to do so in the coming months.

Delays in delivery and lack of power may have been forgivable during the heart of the pandemic, but locality, independence and control have become primary considerations in recent months. Here, accountants have a unique opportunity to share their expertise. Many businesses lack the know-how or resource to make considered and quality change, but accountants can offer their skills including risk assessment and understanding of the numbers to provide a quantified business case.

Balancing costs, consistency, and quality with stability of supply will be essential, in addition to helping create understanding of the impact on costs, profitability and pricing too.

Environmental considerations will skyrocket

While businesses have spent a few years grappling with terms such as net zero, carbon negative, climate change, and climate catastrophe, 2023 and beyond will see environmental sustainability become more entrenched in day-to-day business expectations.

Net zero is now an almost mandatory target, and as I have regularly highlighted, presents an opportunity for accountants to capitalise on their established reporting and data analysis skillset. Interestingly, the current energy crisis will likely create an unexpected boom in the next few years.

Microgeneration on a local scale has always been a potential sustainability gain, but installation cost and the availability of cheap energy has somewhat supressed demand.

Now, as the energy crisis signals long-term turbulence, it has the potential to provide not only cost controls and stability, but also Environmental, Social, and Governance (ESG) gains too.

Value-based pricing will resurface

During the last financial squeeze, value-based pricing came to the fore in the accountancy sector, shaping the client-provider relationship. This approach has the advantage of connecting cost to outcome, providing reassurance to clients as recession inevitably drives renewed focus on cost control and efficiencies.

Not every accountancy business will suit or adopt this as an approach, but a focus on communication and additional advisory services should ultimately achieve the same outcome. According to a study by the Hinge Research Institute, there is typically disparity between the services that are offered to clients and the ones that they value, as well as the effectiveness with which accountants communicate their services.

64% of accountants believe that they offer tailored services to their clients, but less than 40% of clients agree. It is perhaps this that will drive accountancy sector change and innovation as accountants seek to more readily align with client needs and expectations.

All things digital and tech

Digitalisation and the adoption of technology was a key prediction which manifested throughout 2022 due to unprecedented levels of cloud accounting and the continued roll out of some of the Making Tax Digital (MTD) updates. Despite the rollout of MTD for ITSA being delayed until 2026 digitalisation will endure as a trend for the coming year.

As recession puts efficiency into sharp focus, technology offers both the insight and the solution to streamlining. We are in the digital finance age and the appetite for tech will continue to accelerate. New and emergent technologies will begin to gather momentum and while only the most progressive organisations will start using the metaverse this year, other technologies will begin to reach maturity.

Blockchain technology will offer security enhancements for example, while standard computing software will provide accessible process automation, and big data will grow in importance as accountants are called upon to provide insights and analysis on operating efficiencies.

Original Post: The accountancy trends shaping 2 023 and beyond