Evolving technology, finding and retaining the right talent, and providing better advisory services to clients present the greatest challenges – and opportunities – for small- and medium-sized practitioners (SMPs), heard attendees at the World Congress of Accountants (WCOA).
By Shannon Cuthbert
These findings from the recently released 2018 IFAC Global SMP Survey, which surveyed more than 6000 respondents from 150 countries, were the topic of a panel discussion that delved into the concerns of the SMP sector, held on the third day of the congress.
According to the survey findings, 38 per cent of firms viewed technological developments as a significant challenge. Despite this, 28 per cent plan to allocate more than 10 per cent of total practice revenue to technology investment over the next 12 months.
Of SMPs with technology developments introduced or planned for implementation in the next 12 months, 37 per cent were focused on developing in-house skills and expertise in IT, 32 per cent were looking to adopt and use cloud options for clients’ interface and servicing, and 29 per cent were focused on the provision of insights from data analytics as a new service offering.
While the panel agreed that there are clear benefits to leveraging technology, including improved data security and greater flexibility, panellist and Chief Executive Officer of Power Tynan, Amanda Kenafake, cautioned against SMPs implementing tech without strategic direction or understanding.
“We’ve achieved a lot of success by really knowing what we want, having the right systems and using them effectively. Technology is important, but you need to have it fitting in with your strategy. Your IT strategy has to fit into your business strategy, HR strategy and marketing strategy. It all has to fit together,” Kenafake said.
See CPA Australia’s full WCOA 2018 coverage here
It’s also important to remember that technology is a tool and SMPs shouldn’t lose sight of the human element of their business, argued Jonathan Elliot, Managing Director of Collins SBA.
“Tech is a bunch of shiny things, people are your secret sauce. Make sure they’re engaged and empowered,” Elliot said.
Evolving the advisory role
Although the vast majority (86 per cent) of survey respondents said they provide some advisory or consulting service, CPA.com Chief Executive Officer and panel moderator Erik Asgeirsson estimated that only around 10 per cent of firms globally are offering this service strategically and doing it well.
According to the research, 53 per cent of firms offer corporate advisory services to clients, 50 per cent provide management accounting, while 31 per cent offering advisory services around restructuring, insolvency and liquidation.
Panellist Max Thomas, Head of Business Development, Professional Segment, Tax & Accounting at Thomson Reuters, talked to the importance of accountants developing their advisory services to stay ahead of the potential threats of emerging technology.
“Small businesses consistently rate their accountant as their most highly trusted advisor of their business. But as technology evolves and governments become more ‘e-engaged’, there is a real pressure on the industry. In the UK, for example, there’s a move by the tax collection authority to fully digitise and get rid of tax returns by 2021,” Thomas said.
“Obviously, that’s a threat to accountants, so advisory will be absolutely key. Rather than doing a return once a year, it’s going to be 12 times a year you’re engaging with clients, offering advice and making sure that the business is getting the best value. It’s a real opportunity for firms.”
Diversity of talent
The final section of the report discussed by the panel was the importance of talent diversity, and the difficulties facing firms looking to attract and retain the right people.
According to the report, 56 per cent of SMPs have difficulty attracting next-generation talent, with 66 per cent of these firms citing a lack of candidates with the right skills as the main challenge they face.
The solution offered by the panel was to look outside the sector, to build a diverse team with the variety of skill sets the firm needs.
“You need your team to be ready to face different and complex challenges and this is why you need diversity. We know this is not always easy for small SMPs or sole practitioners who basically work alone.
“These practitioners need to search for partnerships and associations, so you do have the resources that you need to properly deliver the service. Once you have different minds and people with different concepts working well together, then you’ll see the results,” said Monica Foerster, Chair of the SMP Committee, IFAC.
Internal change and building the right team can also lead to firms adding further value to their client relationship, delegates heard.
“Our clients are facing the same issues we are. They’re dealing with new technology and retaining team members. If you’re doing it in your own business, your clients will need the same thing. Firms should practice on themselves, then take their new solutions to clients,” said Kenafake.
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