The accounting profession has seen it’s fair share of change thanks to the direct reporting and financial effects of COVID over the past few years. The accounting industry remains under the pump with the increased amount of pandemic-influenced impacts such as remote work deductions and government subsidies. With the global accounting services market expected to reach $1324.77 billion in 2022, accompanied by a compound annual growth rate (CAGR) of 12.7%, accountants and their firms need to keep up with the latest trends to stay competitive.
In this blog, we will outline how the market is moving forward through the ‘age of COVID’ and the four key trends to hit the accounting industry in 2022.
Moving through the ‘age of COVID’
According to Our World in Data, approximately 4.4 billion people worldwide are fully vaccinated, 63% have received at least one dose of a COVID vaccine and 21.74 million doses are being administered daily - the pandemic is gradually becoming a more controlled and manageable version of our common flu. And with this, according to Forbes, the finance and accounting industries continue to speed through a transformative period. The impact of COVID-19 accelerated profound changes in business, work and life over the past few years.
Businesses held off on seeking costly advisory services from accountants at a time when cash flow was poor, but relied heavily on them for guidance and compliance during the rollout of government assistance packages such as JobKeeper and Cash Flow Boost at the start of the pandemic. This continued in early 2021. The Institute of Public Accountants maintains its 2021 belief that the value of practitioners will continue to increase as government support measures are wound up and new accounting policies and procedures are introduced to combat changed working conditions.
What does this mean for accounting firms and professionals in 2022? A unique opportunity to establish stronger client relationships and leverage additional value from their clients - going beyond mere compliance. And so, if 2020 and 2021 addressed the challenges, now is the time to capitalise on opportunities and move towards more strategic long term planning - becoming “crisis managers with a long term view.” In Dext’s survey, 78% of accountants and bookkeepers are optimistic about meeting their business goals in 2022.
Accounting trends for 2022
Here are the four key accounting trends to watch out for in 2022:
Recruiting and retaining top talent
The ‘war for talent’ across skilled industries has never been greater. According to the Australian Financial Review’s Top 100 Accounting Firms survey for 2021, more than three-quarters of Australia’s largest accounting firms reported having trouble recruiting and retaining staff and this “demand means strong accounting candidates are fielding multiple offers and ‘bidding wars’ are driving up pay across the sector.” The irony being that while demand for advisory services and post-COVID assistance from the accounting sector has never been greater and revenue is up, the ongoing shortage of talented professionals is impacting growth in the industry.
In response, many firms are looking at ways to improve candidate and employee experiences to try and attract and retain quality staff in a highly competitive market. Key to this strategy is to look at ways to use automation to manage repetitive, time consuming work and implement more flexible, remote working models to further entice candidates.
Automation and artificial intelligence
Automation and artificial intelligence (AI) related trends have been on the radar for many years in the accounting industry so it’s fair to say that there’s no longer a debate about their role in the way accountants work. If anything the pandemic has demonstrated just how important automation can be. Automation has relieved accounting professionals of tiresome and time consuming manual tasks, equipping them with intelligent tools to manage every accounting task. What’s more, when asked about the tools required to deliver on 2022 plans, 56% of the accountants and bookkeepers Dext surveyed said the prioritisation of technology will lead to practice productivity increases.
Once accountants can be freed up from the basic compliance tasks, they can focus on upskilling staff and the delivery of the business advisory services that will be so desperately needed by their clients in the coming years. In fact, 72% of accountants and bookkeepers agree that expanding their advisory services will help their firms grow in 2022.
Cloud technology and remote work
The pandemic has permanently changed the way we work, and accountancy is just as impacted as any other industry. In order to work remotely, cloud technology is essential and covers everything from accounting software and video conferencing to document sharing and productivity. With more companies moving towards cloud accounting, they are no longer constrained to do business locally. Both accountants and business are starting to offshore basic accounting tasks to locations such as the Philippines. Doing this will allow accounting professionals to focus on more strategic work and advisory services which will also add more value to the firm’s bottom line. Working from home and remote working debates will be a constant in the accounting profession well into 2022. 33% of accountants and bookkeepers state they’ll work remotely 75% to 100% of the time and 31% state they’ll only work remotely up to 25% of the time.
Cloud based software is not only essential for accountants but also for clients. In many cases, it’s clients who are driving the move towards the cloud, by utilising accounting software in conjunction with the many integrated applications such as point-of-sale, inventory management and online stores. And accountants quite simply need to keep pace with the technological expectations of their clients and be able to advise them on how best to maximise integrations. To add to this, 27% of those surveyed by Dext said they require better remote working solutions and cloud technology can offer just that.
Data is king
The strategic planning and advisory services that accounting firms can offer businesses will entirely depend upon data. Accounting professionals can use big data to transform information into important and influential data sets used for critical business decision making. Analytics as part of accounting services is nothing new but we’re seeing more data becoming available and it’s playing a more powerful role in business decision-making.
We’re seeing professional associations such as the IMA emphasising the importance of continuous learning for accountants in such areas as data analytics so they’ll have the skills they need to compete in the new post-COVID working environment. The impact on the accounting sector will be huge, and the demand for data specialists will skyrocket.
In 2022, accounting professionals will need to step into the vital role of business advisor if they are to grow and meet the demands of their clients. Adopting new technologies and upskilling in the areas of analytics and strategic planning will be vital for accountants into the future. At a compliance level, firms should be investigating outsourcing basic tasks in order to focus on their new direction of growth.
Where to go from here?
If you’d like to investigate the role outsourcing could play in your firm’s resourcing future to help you remain viable in the current economic climate, download our real-life client case study about how to scale and grow your accounting firm through outsourcing.