Resolve and evolve
With choppy economic waters ahead and tech-savvy clients demanding new services, now is the time to assess how seaworthy your practice is. George Carey investigates how you can future-proof your practice.
These are challenging times for small accountancy ﬁrms. With digital tax, the rise of artiﬁcial intelligence (AI) and a country awaiting an uncertain future in or outside the European Union, there’s a lot to plan for, to ensure longevity.
In or out?
In the case of political uncertainty, it can seem diﬃcult to prepare for eventualities that even Westminster’s ﬁnest can’t predict from one hour to the next.
Peter Gillman, former chief executive of Price Bailey LLP and owner of Peter Gillman consultancy, has a rather simple solution: “good management”. While that answer could sound glib, he is referring to the need for streetwise, business savvy practice owners who keep a close eye on their industry, not just their clients’ accounts. “For too long, some practices have had partners who only exhibit the traditional skills of accounting and tax, with no wider appreciation of their own business and the opportunities in the market,” he explains.
Referring to an historic tension in accountancy practice between “accuracy and imagination”, Gillman asserts that now is the time to let the latter shine through.
No accountant is ignorant about the march of technological change and its impact on the industry.
Indeed, the Thompson Reuters’s ‘Accountancy in 2028’ survey revealed that 95% of respondents said their role is likely to change due to technology, with 74% stating this change to be ‘very likely’.
“Anyone still using traditional methods such as spreadsheets is going to have to change,” advises Kenny Fitzgerald, partner at My Accountant Friend.
“Making Tax Digital (MTD) is only the start of what will become a requirement for everyone in the near future.”
Using the cloud to facilitate remote working in his practice is already a vital part of Fitzgerald’s business model. Having client information at their ﬁngertips in any location saves him and his colleagues signiﬁcant time in their day-to-day roles.
Rather than a threat, this shift towards real-time information and automated processes should be a liberating one for practitioners, says Len Jones, senior accountant at Wincham International.
He sees the time saved on the traditional processing elements of the job creating more opportunities to get to know clients, perhaps creating further revenue through cross selling. “You could use information gleaned by your AI bookkeeper to develop proﬁles of your clients, allowing you an instant snapshot of their business that will enable you to advise them without trudging through accounts,” he says.
“For me the big challenge is the evolving client experience and how much their expectations are changing,” says Gillman.
With clients having independent access to their information without having to go through their accountant, there could be a greatly reduced requirement for contact time.
Jones predicts that this evolution in the way clients interact with their accountants will have a profound impact on the way practices market themselves to differentiate their services. It could, he says, lead to the creation of more niche or boutique accounting practices. This will only work if partners have a keen eye on the marketplace though, he warns.
“Future-prooﬁng assumes that you have identiﬁed your target market’s needs, rather than simply promoting what you can supply,” says Jones. “I am not sure how many practices out there fundamentally understand the diﬀerence.”
For those accountancy practices with the entrepreneurial spirit and innovation to adapt, Jones sees a new type of matchmaking service as a potentially rich seam of work.
He predicts: “Accountants may have a role to play in providing a speedier dating agency service between types of business model and more appropriate terms of funding, especially where working capital lockins of debtors and stock can be turned into cash more quickly.”
To enable these new, almost solely advisory types of service, Gillman sees a change in billing practices as essential. Under the old system, he reﬂects, clients will often be reluctant to pick up the phone for advice, for fear of running up large bills.
“Give them a package that says they can pick up the phone any time without worrying about the cost. Not only is it essential to take the costs out of calling to create that advisory relationship, those calls create perfect cross-selling opportunities,” he advises.
Adapt or die
Anticipation rather than reaction is the key to all of the challenges waiting around the corner, because, alas, the playbook for success hasn’t yet been written. As Jones puts it: “Fundamentally, I don’t think you can future-proof your practice in any great detail.”
What he does advise, though, is to have the processes and talent in place that will allow you to be responsive to regulatory and digital changes, and stay one step ahead of the shifting tension between fees and service levels.
George Carey is a freelance journalist