Rapid technological advancements, evolving regulatory landscapes, and economic uncertainties make standing still not an option for any practice wanting to thrive or even survive.
Here are five key challenges that accountants need to master…
Integrating automation and AI
The digital revolution is reshaping the accounting industry. The integration of automation and artificial intelligence (AI) is no longer a futuristic concept but a reality giving the firms getting it right points of differentiation including accuracy, speed and advisory content. Every industry conference this year had AI as the leading topic both on and off stage! These technologies streamline routine tasks, allowing accountants to focus on more strategic activities. However, the shift does require a notable investment in both technology and upskilling staff, so planning and getting started are key.
Accountants need to become adept at using the digital tools and platforms at their disposal. Industry expert Will Farnell still thinks that less than 20% of firms are truly digital practices (see his book ‘The Human Firm’). Moving away from legacy software such as traditional desktop software and Excel spreadsheets is a critical part of this transformation: it’s not just a technical upgrade, but a cultural shift within firms.
Navigating regulatory changes and compliance
The regulatory environment is in constant flux. The post-Brexit landscape continues to introduce new rules that accountants need to navigate meticulously and no doubt a change in Government following the recent election will impact initiatives like Making Tax Digital (MTD).
Moreover, the increasing focus on environmental, social, and governance (ESG) and even carbon accounting requires accountants to develop new competencies in sustainability accounting. Compliance with evolving anti-money laundering (AML) regulations adds another layer of complexity and answering the question of how do we stay up-to-date and compliant while controlling the costs passed on to clients is no easy feat.
Mitigating cybersecurity threats
With the increasing use of digital platforms and sophistication of attacks, cybersecurity is a top priority. As custodians of highly sensitive financial information, accounting firms can become targets for cybercriminals. So, ensuring robust data protection is not just about regulatory compliance, but also about safeguarding firms’ reputations. It’s an area still seems oddly neglected with many firms choosing to hold onto client data rather than pass it and the responsibility for its safety to technical specialists.
Tackling talent acquisition, retention, and upskilling
The accounting profession faces a significant skills shortage, and attracting and retaining top talent is proving increasingly challenging. Younger generations of accountants have different career expectations, value work-life balance more and expect continuous learning opportunities without repetitive and frustrating tasks. The capacity crunch is real in accounting and, whilst technology can help, it’s still down to firms to create the right environment and reflect these changing expectations to remain attractive to candidates. Smaller accountancy firms, where culture and flexibility are easier to control, are attracting waitlists of candidates (Strive-X is a great example of this).
With 86% of accountants wanting their employers to provide more training on the use of accounting technologies (ACCA Global talent trends survey 2023) investing in professional development and upskilling is crucial. Firms must also look beyond the usual regulatory training to engage and retain staff. Building a culture that supports growth and learning also helps firms stay competitive and aligned to customers’ priorities.
Navigating economic uncertainty
Economic fluctuations including inflation, changes in interest rates, geopolitical events, elections, and the continuing impact of Brexit and Covid are all significantly impacting businesses their financial priorities and performance. Accountants play a crucial role in helping clients navigate these forces providing strategic advice on risk management and identifying opportunities in volatile markets.
This requires accountants to be agile and well-informed (which requires time and headspace that no doubt technology plays a role in creating) in order to provide clients with the guidance needed to adapt to evolving economic landscape. Mastering this further stretch of accountant towards trusted advisor will set successful firms apart but is not for the faint hearted.
Beyond 2025
I don’t have a crystal ball but adapting to digital transformation, staying compliant with regulatory changes, safeguarding against cybersecurity threats, attracting and retaining talent, and navigating economic uncertainties are going to remain important. If anything, the challenges in these five areas are likely to steadily grow.
However, recognising and starting to tackle these challenges offers accountants the chance to enhance their value proposition and solidify themselves as indispensable strategic advisors to clients, in what continues to be an unpredictable and demanding financial landscape.
