2016 has come and gone and we are now already one month into 2017, which means we’ve got another 11 months ahead of us to see where accountants will focus their firms in the new year. In order to understand which way firms are headed, we need to look at where they have been and what have we learned.
Towards the end of last year, there was a lot of noise in the industry surrounding disgruntled Millennial accountants and their dissatisfaction with the current modern day practice. There was a backlash against the Australian university curriculum for allegedly being no longer relevant for the skills and experience required for our next generation of accounting firms.
We also witnessed a small percentage of firms revisit their organisational structure and change the model, by introducing CEO, CTO, CIO roles to further enhance the focus and roles of key partners.
Firms were encouraged to specialise in value-added services, niche industries and more firms were looking to diversify towards/away from financial planning and self-managed super due to new regulations.
There was a cry out for firms to move away from hourly billing cycles and focus on outcome-based billing, value pricing or fixed fees, all with their own pros and cons.
We also started to see case studies of firms that were truly excelling in productivity by further enhancing the automation available within their accounting software.
With firms opting to engage a digital mechanic (web developer or API developer) into their practice to further streamline their clients’ other tools and programs to sync back to their cloud-accounting solution.
Lastly, we’re still hearing that accounting firms need to not only be on the cloud, but their operations need to be immersed in the cloud in order to stay relevant and competitive.
From this, we can derive four major components that accountants are likely to focus on in 2017.
1. Staff: The key to your firm’s future
Attracting top talent and retaining them is never easy for any organisation. The best organisations will pen their success in this area to having an engaging culture that allows team members to thrive and do their best work.
Traditionally, for accounting firms, this isn’t a culture most are familiar with.
Firms should consider what part of the current culture could be adjusted to help complement the way junior accountants feel in the workplace. After all, they are the future of your accounting firm.
2. Pricing your services: Working too fast could be hurting your bottom line
When it comes to pricing your fees, the majority of firms are still using hourly billing methods, which is starting to impact their bottom line. This is directly linked to firms that are embracing cloud technology, allowing them to complete their jobs faster.
When your pricing is linked to the speed in which it takes to complete a task, it’s guaranteed to be an uphill battle. Value pricing and fixed fees will be a continued focus, as firms look to move away from time-based billing.
3. Systems: Cloud everything
Practice management is on the verge of disruption and we’ll see some huge developments in this area in 2017 and 2018. It’s only a matter of time before cloud-based solutions start to overtake the functionality and value prop of the desktop practice management solutions that have been so heavily ingrained within Australian accounting firms.
As renewals for desktop licenses come up for firms all over the country, you can expect them to start focusing on alternative cloud practice management systems that help drive greater efficiencies and better connection to their accounting solution.
4. Organisational structure
A firm’s structure for the majority is likely to stay unchanged, but we’re starting to see pockets of experimentation between having appointed CEOs, CTOs, account managers and business development mangers in accounting firms.
Firms are opting to bring in dedicated roles similar to that of a technology service-based organisation. This can allow for diversified skill sets, focus lead departments and will truly complement, cloud-heavy accounting firms.
Expect to see more firms investigating some of these roles and how they could apply to the structure of a firm in the future.
2017 is sure to be a big year, with conference season just around the corner and the advancement of technology within the industry. It’s hard to keep up just thinking about it.