The rapid development of digital technologies, data analytics and social networks are some of the factors changing the very fabric of our society, not to mention the traditional structure of the workplace. In previous generations it wouldn’t be unusual to stay in your first job until retirement, yet now, a UK worker changes employer on average every five years. What’s trending today may be gone tomorrow, and with the World Economic Forum citing that around “35 per cent of skills will be different” in the near future, business owners need to adapt to innovation in a timely manner in order to stay relevant. So with that in mind, what will the future of work look like for accountants and bookkeepers?
Government policy allows workers the right to request flexible working hours following 26 weeks of service. Coupled with access to more modes of communication than ever before, many accounting and bookkeeping firms are introducing more mobile working practices. And in order to attract the best talent, it’s a strategic move, with research finding that more than 80 per cent of UK employees would look for these types of benefits before joining a new company.
Whilst management may fear less output from those working ‘unsupervised’ away from the office, demonstrating a culture of trust is actually proven to promote employee loyalty and productivity. Furthermore, in terms of client interaction, less than half of SMEs (42%) expect to speak with their accountant in person in the future. This will mean businesses will need to ensure they have the right facilities and technological infrastructure in place to accommodate remote communication with employees and clients alike.
Advisory services + billing
According to Xero research, 42 per cent of SMEs will turn to accountants for advice beyond the traditional perimeter of accounting. And with more than 80 per cent of revenue now derived from business advisory services alone, more accountants will seek to engage with clients as a strategic business consultant rather than just as a service provider.
When considering the above, firms should evaluate their billing policy. Many already know that hourly rates present a conflict when working efficiently, yet staying profitable, by putting the onus on time rather than value. Therefore many are adopting value pricing. This means understanding a client’s objectives and creating a proposal based on the value created, rather than the hours clocked up. And with the fee agreed in advance. This approach ultimately allows firms to charge more whilst differentiating their services, and enhancing mutual client/practitioner trust.
The most recent updates to ‘Making Tax Digital’ (MTD) means that from 2019 organisations with a turnover above the VAT threshold of £85,000 will need to keep digital records for VAT purposes. Businesses will not need to update HMRC quarterly elsewhere, until at least 2020. The revised dates present an opportunity for accountants and bookkeepers to craft potentially lucrative, training and/or advisory programmes for new prospects. It will also allow more time for firms to get to grips with handling automated solutions in line with HMRC’s requirements.
Elsewhere, GDPR continues to grab headlines, as the EU prepares to enforce tougher data privacy policies in May. To avoid fines of up to four per cent of turnover, management will need to know what data they have stored on clients, (e.g. contact addresses and bank details) and what cyber protection is in place to protect this data. Despite unfounded concerns regarding the security of cloud storage, this won’t slow down the adoption of new technologies; as the right solutions have sophisticated in-built cyber protection in order to thwart threats. Moving forward, security breaches will need to be reported within a 72 hour timeframe. So in order to comply long term, many businesses are engaging with external consultants to develop an information risk management process that enables them to identify, investigate and report on data breaches in a timely manner.
Using technology to get ahead
Xero research has found firms embracing a digital and cloud-first strategy report the highest growth, adding five times the amount of clients than more traditional competitors. Furthermore, those companies with a majority of clients using cloud accounting software had notably higher levels of year-over-year revenue growth than traditional firms. In terms of working smarter and achieving more, automation and AI-based technologies will also become more widely adopted, especially in terms of eliminating labour intensive processes such as manual data entry.
For instance, AutoEntry a Xero add on, captures and analyses scanned and photographed purchase and sales invoices, receipts, bank and card statements, automating your data entry to Xero. AutoEntry captures tax summaries by default and if requested, full line item details including description, quantity and unit price. AutoEntry also remembers how users categorise expenses, such as the relevant supplier account, nominal account and tax code without ever creating duplicate supplier accounts or posting duplicate invoices in Xero. AutoEntry even matches invoices to purchase orders.
Whilst we can never predict the future, it’s likely that the adoption of digital technologies will increasingly shape the working practices of tomorrow. For some, this will be by default in order to comply with changing government policy. For others it may be an organic transition, as more businesses realise the significant operating benefits of using digital technologies. Indeed, in order to keep up with the pace of change, now is the time to adopt automated solutions to take care of the grunt work and allow employees to focus more time on business development and client engagement. This will increasingly be the strategy of savvy accountancy and bookkeeping practices, helping them to better prepare for the future and remain competitive in the long-term.