By Andrew Guy, CEO at FD Intelligence
The accountancy industry is navigating through a perfect storm of challenges. From declining productivity to talent shortages and increasing work demands, firms are grappling with a set of interconnected issues that threaten to constrain their growth ambitions.
Many firms are also going through a major transformation as partners retire and sell their practices. The resulting consolidation into larger firms means even greater requirements for managing the tension between efficiency and growth.
Let’s dive into these challenges and explore why finding innovative solutions has become more critical than ever.
The talent crunch
One of the most pressing issues facing the industry is a significant, potentially enduring, skills shortage.
According to industry analysts, the global deficit of skilled accountants is estimated to potentially reach a staggering 3.5 million by 2025.
This shortage is particularly acute in key areas such as auditing, taxation, and advisory services. The implications of this are far-reaching:
- Difficulty in meeting client demands during peak workload periods
- Challenges in expanding services without adding headcount
- Increased pressure on existing staff, potentially leading to burnout and further turnover
The productivity paradox
As the talent pool shrinks, firms are faced with the daunting task of maintaining – or even increasing – productivity levels. This challenge is compounded by three key factors:
- Increasing complexity of work: as regulations evolve and client needs become more sophisticated, accountants are required to handle increasingly complex tasks.
- Rising client expectations: clients are demanding faster turnaround times and more strategic, analytical, and consultative services.
- The shackles of mundane tasks – tax processing, requesting client data, statutory filing and monthly payroll runs are a major resource drain. These number-crunching and data processing jobs could potentially be performed faster and with less errors
The growth grind
In this challenging socioeconomic environment, accountancy firms are confronted with a growth dilemma. They’re calculating how they can:
- Maintain service, quality, satisfaction with increasingly sparse resources.
- Service more business without adding headcount.
- Deliver greater service volumes faster, with fewer errors.
- Meet client requirements for more strategic, analytical, and consultative services.
This balancing act between growth ambitions and resource constraints is becoming increasingly difficult to manage.
Why current technologies won’t cut it
The main barriers to boosting productivity and service quality include old legacy IT environments combined with manual, paper-heavy or simply inefficient processes. It means the flow of information across different systems is typically incomplete. Too often, employees must navigate across multiple, poorly connected, old and modern systems.
Ironically, the very tools originally designed to make employees more productive are adding more complexity. This is especially true as each system requires significant training, experience and effort to work with effectively.
Traditional approaches to addressing these challenges are hampered by the inability to evolve and capitalise on digital service innovation across old and new systems, and the complexity, cost, time and staff investment needed.
Bottom line
It’s clear that traditional technologies and approaches are no longer sufficient to address these multifaceted challenges. The UK accountancy industry is at a crossroads. Those firms that fail to adapt, risk shifting from being in the accountancy business to the business of survival.
The good news? Help is now available. Pioneering solutions blending intelligent automation and AI capabilities with accounting expertise are emerging as a powerful catalyst for change. By providing extra intelligence, productivity, and efficiency boosts, they promise to address many of the challenges facing the accounting industry.
These innovations are already hugely augmenting the way accounting firms operate, where employees flourish, unshackled from routine and manual work.
In next week’s post, I’ll explore why and how Intelligent Automation is revolutionising the accountancy landscape, particularly for growth focused firms with challenger mindsets.
