The Commonwealth Bank of Australia (CBA) on Thursday released the results of its annual Accounting Market Pulse report, which showed business conditions across the industry have surged to the highest levels in the report’s six-year history.
CBA executive manager of professional services Belinda Hegarty said that accountants are seeing rising demand as a result of the pivotal advice they offered clients navigating the impacts of the pandemic.
“Accounting firms continue to play a vital role in helping businesses navigate operating conditions as we emerge from the pandemic,” Ms Hegarty said.
“This is fuelling strong demand which, in turn, has underpinned a dramatic rebound in confidence.”
More than 70 per cent of respondents noted that they’d move to diversify their service offering beyond traditional accounting services in the face of a rising demand for tax consulting and compliance, property advisory and cybersecurity consulting.
She said: “Firms are fast-tracking their plans for growth to meet this demand and this is contributing to expectations of industry diversification, as well as acquisitions, as firms look to build capability and staff numbers.”
However, in the wake of border closures, Australian accounting firms have been forced to compete for new talent, while fighting to retain the staff they do have.
The report found that leading top-tier firms are facing new difficulties attracting new recruits and, as a result, are looking to acquisition strategies to expand their offering and usurp staff.
More than 75 per cent of leading firms said they had plans to acquire other firms to do so.
“We’re seeing mid-sized firms make acquisitions that will broaden their geographic footprint,” Ms Hegarty said.
“Meanwhile, large firms see acquisitions as an opportunity to expand their offering while also increasing their staff numbers.”
Surging business confidence across the accounting industry emerges in contrast to other industries around Australia which recorded an overall dip through March, according to NAB’s monthly business survey. Business confidence fell by 3 index points to 15 index points for the month as a result of slowed wholesale and manufacturing.
The mining, finance, property and construction sectors reported the highest levels of confidence, while retail and wholesale reported the lowest.
“Despite the dip in confidence in the month, it remains well above its long-run average,” said Alan Oster, chief economist at NAB.
“This, in combination with a very strong read for forward orders, points to ongoing strength in activity — which hopefully sees conditions remain elevated, even as we pass through the end of the JobKeeper program.”