Accountancy Firms Must Evolve and Innovate to Survive Says ICAEW

Tomorrow’s Practice, which launched yesterday at ICAEW, is considering the opportunities open to accounting firms if they want to evolve and innovate.

The Tomorrow’s Practice initiative is looking to raise awareness of the areas of change affecting the profession. It is based on conversations across the UK with people in the profession and business, collecting their views on the needs of small businesses and the future of accountancy practices.

The report has identified four key factors driving a shift in the accountancy landscape:

• Technology has made basic accounts preparation and bookkeeping easier for businesses. This has the potential to change the role of the accountant, creating different opportunities to add value.
• Competition is coming from consultants, professional services firms, other accountants, and even the internet – firms need to maintain their position as trusted advisers to clients, while ensuring they do not compromise the quality of their service to reduce costs.
• Regulation – changing audit rules, the evolving pensions landscape, and new opportunities in legal services mean accountants can develop new propositions
• Clients’ expectations are changing – companies want a ‘one stop shop’ for their business support, so accountants need to think about how they can play more of an advisory role. Flexibility to provide a tailored service to clients is key

In addition to thinking about what their clients want, practitioners should consider the needs of their staff. Practices are having problems in finding and keeping good staff, made harder by changing priorities – fewer managers aspire to become partners and many staff are seeking an improved work/life balance.

In identifying the challenges, Tomorrow’s Practice seeks to help practices make informed choices about their future. Firms and sole practitioners can all take advantage of new opportunities, but they need to choose the path that’s right for them. This could mean developing their own niche markets, building up their expertise or network to provide a ‘one stop shop’, or even providing specialist assurance services.

Arthur Bailey, ICAEW President, said: ‘The accountancy landscape is changing, and smaller practices need to embrace the opportunity. Our members should consider how they will react to changes in the marketplace and provide the added value clients are demanding. This could mean firms specialising in a particular area or providing additional services that make them indispensable to the businesses they serve. Whichever path our members choose to take, we’ll be there to support them, using our learnings from Tomorrow’s Practice to develop new guidance.’