As an accounting firm coach, mentor and consultant I get to see inside lots of accounting firms and talk to many accounting firm owners and managers. In no particular order, here are some of the common themes I saw in 2022:
- Challenges with attracting and retaining great people
It’s probably no accident this is listed first as it has been and still is an enormous challenge in many firms. I wrote three articles on this during the year and I think one of the consequences is that most people in firms are tired and well and truly ready for a rest.
- Flexible working arrangements
This was a strong trend accelerated by COVID and I noticed in 2022 that different firms ended up in different places. Some firms have everyone back in the office and are not offering flexibility in terms of the location for working and say they are not being asked for that flexibility. Other firms however are saying the opposite – that flexibility in terms of location and also hours is being both asked for and offered. My view is that in a candidate short market, being able to offer flexibility is attractive to many potential team members.
- Automation, AI and other technologies
I’ve written an article this month about the likely impact of AI and in previous months have written about RPA and the metaverse. My view is that RPA’s time has well and truly arrived for small to medium firms, with some really cool and affordable tools available. Some clients are now undergoing pilots for the implementation of RPA and it will be very interesting to see the results. The idea is to be able to efficiently complete many of the mundane, repetitive tasks inside firms to free up time of scarce accountants for the tasks they enjoy more and add more value.
- The continued rise of offshoring
A large percentage of my clients and other firms I speak with have work being done offshore. This has increased primarily as a result of firms saying they feel like they have no choice due to the inability to attract and retain enough good people. I have mentioned before a view that has long been expressed that offshoring may yet turn out to be a transitional strategy until automation is advanced enough to take over. I see some merit in that view but for now I think many firms will have both offshoring and RPA.
- Cyber security
The Optus and Medibank Private data breaches have significantly raised the awareness about the risks all businesses face from cyber crime. At the last meeting for the year of the TAP IT NSW Group we focused on this and it was agreed that whether we like it or not, firms will need to allocate more time and money to cyber security. Not surprisingly, firms are also reporting significant increases in cyber insurance premiums.
- Pricing and client selection
2022 has definitely seen a turning point in the pricing of work and client selection. It seems to be the majority of firms have increased prices by 10% or more with little or no pushback from their clients, and firms are taking a much more critical view of what clients they take on or keep. (Finally I say!) If you have not increased your prices by at least this much, please do so!
- Premises strategy
COVID and flexible work arrangements have given firms cause to pause to reimagine their premises needs. I’ve had a few clients move into or plan to move into premises where they do not expect to have a permanent desk for every team member. This is based on their belief that a lot of team members will be working from home or other locations for one or two days per week. And there are a few small firms who have elected to work virtually on a permanent basis.
This year I’ve been asked to assist quite a few firms with succession. I’ve had clients, retire, merge, buy and sell and have younger team members come through to be shareholders for the first time. Great to see. The firms that do succession well are very considered in their approach and plan a long way ahead.