2016 has been and gone and we are now already two weeks into 2017. Which means we’ve got another 50 weeks ahead of us to see where accountants will focus their firms in 2017. In order to understand which way firms are headed, we need to look at where firms have been and what have we learnt. This will help shape where firms are headed this year and what they'll be focused on.
Towards the end of last year, we saw a lot of noise and media surrounding disgruntled millennial accountants and their inability to stay satisfied within the current traditional practice. There was a backlash towards the Australian University curriculum as being a journey no longer relevant for the skills and experience required for our next generation of accounting firms.
We also saw media calling for firms to restructure and transform business models and move away from traditional practices.
Firms were encouraged to specialise in value added services, niche industries and more firms were looking to diversify towards / away from financial planning and self managed super due to new regulations.
There was a cry out for firms to move away from hourly billing cycles and instead focus on outcome based billing, value pricing or fixed fees. All with their own pro’s and con’s. We also started to see case studies of firms that are truly excelling in productivity by further enhancing the automation available within their accounting software. With firms opting to engage a digital mechanic (web developer or API Developer) into their practice, to further streamline their client’s other tools and programs, to all sync back to their cloud accounting solution.
Lastly we’re still hearing that accounting firms need to not only be on the cloud, but their firm’s operations needs to be immersed in the cloud in order to stay relevant and competitive. With cloud practice management getting discussed at length in some forums and online articles.
As you can see 2016 was a busy year. Here are the main items we’ve discussed so far.
- Junior accountants are finding it difficult to stay engaged in traditional firms
- Firms unable to employ staff with relevant skill set based on future cloud needs
- Time based billing vs Value based pricing? How is it implemented and what is the impact.
- Cloud based practice management is starting to emerge
- Firms moving to specialise towards particular value added services or niche industries
- Further automation is experimented with and introduced via connectors like Workato, Zapier, OneSaas
- Change of firm structure was discussed, introducing CEO’s and department heads to create further efficiency and understood roles
If was to summarise this down further. We’re looking at four major components accountants are likely to focus on in 2017.
- Staff: The key to your firm’s future
- Pricing Your Services
- Systems: All cloud everything
- Organisational Structure
Staff: The key to your firm’s future
Attracting top talent and retaining them is never easy for any organisation. The best organisations will pen their success in this area to having an engaging culture that allows team members to thrive and do their best work. Traditionally for accounting firms this isn’t a culture most are familiar with. There was a great interview with Simon Sinek trending on Facebook and Youtube (A lazy 3 million views) in December and January that talked about ‘Millenials in the workforce’. A great 15 minute video talking about the life of young adults. I’d recommend watching the video to try and understand how to use this outlook to your advantage. What part of your current culture could be adjusted to help compliment the way junior accountants feel in your workplace. After all they are the future of your accounting firm.
Pricing Your Services: Working Too Fast Could Be Hurting Your Bottom Line
When it comes to pricing your fee’s, majority of firms would are still using hourly billing methods. Which as we’ve read about is starting to impact the bottom line for firms. This is directly linked to firms that are embracing cloud technology, allowing them to complete their jobs & tasks faster than ever before. When your pricing is linked to the speed in which takes to complete a task. You’re guaranteed to lose an uphill battle. Value pricing and fixed fee’s will be a continued focus, as firms look to move away from time based billing
Systems: All Cloud Everything
Practice management is on the verge of disruption, we’ll see some huge developments in this area within 2017 and 2018. With new practice solutions from Karbon, CCH, Common Ledger, JetPack Workflow and more making huge strides in this area. It’s only a matter of time before these cloud based solutions start to overtake the functionality and value prop of the desktop practice management solutions that have been so heavily ingrained within Australian accounting firms. As renewals for desktop licenses coming up for firm’s all over the country. You can expect firms to start focusing on cloud alternative practice management systems that help drive greater efficiencies and better connection to their accounting solution.
A firm’s structure for the majority is likely to stay unchanged, but we’re starting to see pockets of experimentation between having appointed CEO’s, CTO’s, account managers, business development mangers existing within an accounting firm. Firms are opting to bring in dedicated roles similar to that of a technology service based organisation. This can allow for diversified skill-sets, focus lead departments and will truly compliment, cloud heavy accounting firms. Expect to see more firms investigating some of these roles and how they could apply to the structure of a firm in future.
2017 is sure to be a big year, with conference season just around the corner and the advancement of technology within the industry. It’s hard to keep up just thinking about it. Artificial Intelligence is likely to play a big role this year, this will be lead by the accounting software companies and will become relevant to the firm as it begins to be introduced into their relevant product suite.
Source & Credit: Trent Mclaren - Intuit Australia