I started by career in accounting at a Big Four accounting firm where we carried big briefcases of paper around town to audit our clients. That was 2008.
If anything is true of the last 15 years, it's that the mountains of change we’ve experienced have left a big mark on the way we do business. Accounting firms have seen notable shifts in how they operate and deliver services, and are being impacted by a number of different trends, including rapid technological innovation, greater access to global talent, and changing employee and client expectations.
The different trends impacting accounting firms, along with COVID-19-induced trends that are likely here to stay.
These are trends that are top of mind for our leadership team at Enkel. Overall, we are not worried, but excited. At the same time, one thing is certain: we cannot stand still.
#1: Global resourcing
Global resourcing allows accounting firms to focus on their core competencies and provide better service to their clients while still having routine, process-driven activities handled efficiently and accurately. By leveraging global talent, firms can increase efficiency, and access specialized expertise and talent without local or even national talent constraints.
In 2017 at Enkel, we decided to build out this infrastructure internally. Today, we have 80 team members globally who support our clients and work collaboratively to deliver great outcomes to our clients. It is our global delivery model that allows us to be incredibly client-centric, responsive, and nimble.
While leveraging global talent may seem daunting at first, there are organizations such as TOA Global that specialize in talent solutions for the accounting industry.
#2: New service offerings and delivery models
With change comes both opportunity and necessity. Clients have new needs and accounting firms are rising to the occasion. At the same time, some of the old ways are no longer acceptable for today’s clients, so to stay competitive, accounting firms must adapt and deliver services in new ways.
Changes to services include the following:
Advisory services: Many firms have expanded their advisory services beyond traditional tax planning to include business strategy, risk management, and financial planning. Advisory services can help clients achieve their business objectives and improve their financial performance.
Technology consulting: Due to the rapid pace of technological change, firms have added technology consulting services to help clients navigate the complex landscape of digital transformation. This includes software selection, implementation, and cybersecurity, to name a few.
Data analytics: Accounting firms are increasingly offering data analytics services to help their clients make more-informed business decisions. This can include data visualization, predictive modeling, and performance analytics.
Pricing models: The traditional hourly billing model used by many accounting firms is quickly becoming a thing of the past. Today’s clients are looking for new options that include fixed-fee and outcome-based pricing. A fixed fee service model involves the accounting firm charging a predetermined amount for a specific service, while an outcome-based model involves the firm charging a fee based on the results achieved for the client. With that said, fixed fee pricing requires careful management and alignment with clients. The default is to set the price and forget it. That is simply not the way to do it.
#3: Specialization
Steve Jobs was known for saying, “Do not try to do everything. Do one thing well.” Companies like Apple, Starbucks, and others have proven that that strategy works. Accounting firms can also adopt this approach when they specialize by industry, region, service, and other niches to secure a competitive advantage over their competitors. Once you develop a “template” for servicing certain client types, it’s much faster and easier to scale your firm.
Three ways accounting firms can specialize include the following:
- Industry: Accounting firms may specialize by serving clients in specific industries, including healthcare, real estate, or technology. This allows them to develop deep expertise in the unique accounting and regulatory requirements of those industries, and provide a broader, more targeted portfolio of services to those clients.
- Service: Firms can specialize in specific service areas such as tax planning, forensic accounting, or business valuation. They develop extensive expertise in these areas and provide more value to clients.
- Niche: Some firms may choose to specialize in specific client segments, including startups, high-net-worth individuals, or not-for-profit organizations. Again, this allows them to develop specialized expertise in the unique needs of those clients and provide better services.
At Enkel, we focus on a few industries but invest heavily in them. We are still open for business with the broader market, but have found that focusing on a few things allows a firm to build deep expertise that the clients can certainly feel.
#4: Client experience
The “always on, get it now” society we’re used to as consumers is bleeding into our business practices and recalibrating client expectations. Add to that a pervasive use of technology, personalization at every turn, and a changing demographic that has different priorities than their parents and grandparents, and accounting firms are being challenged every day to deliver great client experiences. A stronger client-centric approach that focuses on meeting every client’s unique needs is the path forward for today’s accounting firms, even if that means hiring people or small teams that “own” the client relationship and experience.
Things today’s clients care about:
Digital everything: Clients expect accounting firms to have a strong digital presence and offer digital services such as online bookkeeping, cloud-based accounting, and mobile apps for accessing financial information. Clients also expect real-time data and analytics to be available for better decision making.
Faster service: Clients now expect accounting firms to operate with greater efficiency and complete work more quickly. With advances in technology, clients expect faster turnaround times, improved communication, and streamlined processes.
Personalization: If Amazon and Spotify know me so well, why can’t my accountant? Today’s client expects personalized services tailored to their unique needs. This can include custom reporting, individualized financial planning, and other services designed to meet specific objectives.
Sustainability: GenXers, Millennials, and other generations are increasingly focused on environmental and social responsibility, and expect their accounting firm to have a strong commitment to sustainability. This can include reducing carbon emissions, promoting diversity and inclusion, or just supporting local communities in meaningful ways.
#5: Work life balance
Working 60+ hour weeks are a thing of the past. With parts of the world experimenting 4-day work weeks, it’s no wonder a firm’s ability to hire top talent may just depend on their expectations around how and where their employees work. Firms need to understand their capacity, have transparent agreements with staff, and be able to distribute work in a more balanced fashion. And know that not everyone defines “balance” the same way, so it’s critical to have these discussions up front before even hiring a team member.
Important aspects of work-life balance include:
Flexibility: Employees increasingly expect more flexibility in their work schedules, including the ability to work remotely, part-time, or on hybrid schedules. Firms that offer flexible work arrangements are more likely to attract and retain top talent.
Technology: Advances in technology are making it easier for firms to offer more flexible work arrangements and remote work. Cloud-based accounting software, video conferencing, and other digital tools make it possible for employees to work from anywhere and collaborate with colleagues in real-time.
Talent acquisition and retention: In a competitive job market, accounting firms must offer attractive compensation packages and benefits to attract and retain top talent. This goes well beyond the salaries they offer, and now includes perks such as flexible work arrangements, health and wellness programs, and professional development opportunities.
#6: Partnership and collaboration
You have to remember that you cannot do everything. With that said, your clients' needs will continue to evolve and you need to stay relevant. You should decide what you do best, and find partners who can help you solve problems for your clients that you can’t.
At Enkel, we decided early on not to become a CPA firm, but instead, to focus on operational accounting services to support businesses and not-for-profit organizations. As a result, we’ve built a network of referral partners who can assist our clients with their year-end accounting and tax planning needs, and all of those things we choose not to do.
Similarly, many accounting firms choose not to do bookkeeping work and come to Enkel to help them support their clients. Ultimately, our partners get clean books that serve as a great starting point for year end and tax planning services.
Post Covid trends that are here to stay
Remote and hybrid work isn’t going anywhere
The sooner firms get on the bandwagon, the sooner they make it part of the culture and the “new normal.” It can be a huge benefit when firms wholeheartedly embrace this concept and put it into practice. You can have team members across Canada or the United States, or even outside of these borders supporting your clients, and it considerably broadens the talent pool from which you can draw. With that said, we may end up with companies having a combination of full in-office, hybrid, and remote workers all in one place. That is the model we are moving toward at Enkel. That said, each working arrangement comes with a different set of expectations and working structure so that can lead to greater administrative overhead. The key to success here is communication.
Virtual services are a thing
How did we survive all those years without Zoom and Google Meet? Whatever the answer, short of catastrophic circumstances, we’ll never go back there to find out. Virtual services such as online meetings and remote auditing are here to stay, and all the benefits we receive from cloud-based solutions are ubiquitous in our dealings with clients and staff.
Client needs keep changing
Whether caused by COVID or the economy, client needs have, and will continue to be, in flux. Many require government funding to stay afloat, and most need advice on managing cash flow and support with financial planning. Uncertainty is the current certainty and savvy business operators will lean heavily on their accounting partners to better navigate the unknown.
Regulatory changes are everywhere
While not solely related to the pandemic, there are many changes to deadlines, accounting standards, and other regulations. From health and safety and employment, to privacy and environmental regulations, businesses need to stay up to date with the latest regulatory changes and ensure they are following all relevant regulations to protect their employees, customers, and the bottom line.
What kind of firm do you want to be?
From technology to virtual “everything” and talent management, the accounting firms of the future are going to look a lot different than they did five years ago or even longer. And there’s no one thing that needs to change. Everything from enhanced client experiences and leveraging technology for efficiency, to building a more balanced workplace and innovating around service offerings, will be critical for firms to adapt if they want to stay competitive and thrive.
