The 5 hurdles accountants and bookkeepers need to overcome this year
Accountex 2023 was, in our humble opinion, the best one yet. We got the chance to mingle with over 250 brands and feel inspired by the incredible speakers on offer, all while slurping on free ice cream – what could be better?
One of our favourite talks was by Jo Copeland, Xero’s UK Director. It's no secret that accountants and bookkeepers are facing a year of immense change. But according to Jo, there are five key obstacles that leaders need to overcome if they’re to thrive in this new world.
1. Regulatory change
Jo recalled a colleague at Xero claiming that three things in life are certain these days: death, taxes and AI. According to Jo, regulatory change should be included in that – and we agree. From Making Tax Digital (MTD) to the new reporting frameworks of the FRS 101, 102 and 105, there’s a lot to keep up with.
And it’s not just about the changes themselves, but the pace and volatility. For example, 24% of UK accountants said that the additional work required to adopt changes to industry regulations was enough to make them quit. Unfortunately, change creates uncertainty, which in turn creates stress. So resilience and adaptability are essential.
Luckily, there are a few steps you can take to make adopting these new regulatory changes a bit easier. Making sure your business is well staffed, for instance. It’s crucial to have the right people in the right positions to know what actions to take.
Harnessing technology is another way to make the switch more efficient. Automating processes like expenses (find out how Pleo can help with this) can free up your team’s time to focus on addressing regulatory changes before it’s too late.
2. Skills and talent shortage
In a tight recruitment and retention market, it’s hard to find the right people with the right skills. In fact, 80% of businesses are apparently struggling to find the perfect candidate right now. This talent shortage is stopping firms from growing and keeping their clients happy, plus soaring salary expectations are neither realistic nor sustainable.
But here’s the good news: while people often see accounting as a “boring” industry, we’re expecting to see excess demand in the years to come. Despite the perceptions, it’s an innovative industry and one way to attract the right employees is to shout about this. Financial reward might be a key motivator, but it’s not the only one. We’re seeing more and more people who want to do work that brings purpose and adds value. Xero, for example, has a huge neon sign in their office entrance that says “We love accountants and bookkeepers”, so that staff know exactly what their purpose is at the start of each day.
Think about what you’re offering prospective employees. Now more than ever, in this post-Covid world, autonomy and flexibility are key. Allowing flexible working can mean you can start servicing clients outside of the normal 9-5, which is a big hook for overseas customers, as well as for parents who need to factor in childcare requirements.
Training and education can also help to close the skills gap. Not just knowledge and tech-based training, but also softer skills like problem solving and collaboration skills. And if you’re having trouble recruiting close to home, remember that homegrown talent isn’t the only place to look. It’s worth exploring employees in other countries who are happy to relocate or work remotely – they could bring a whole new set of skills you didn’t know you needed.
3. Digital agility
The time it takes to adapt to new technologies is key to staying at the forefront of regulatory change, and to closing the skills gap. Of course, learning the ropes of complex tech and software takes time and resources, but it’s only going to work in your favour. As Jo reminds us, digital agility will help you to streamline your workflows, accurately analyse data and provide the best possible service to your clients. And there’s no excuse not to digitise now that the pandemic has pushed the pace of change even further.
Consider what you want your practice to be like in three years time. What hurdles do you want to overcome? How will your services differ to the ones you offer now? It’s easy to think you’ve digitised, but having a digital ledger is only the beginning. Look at every piece of manual data entry you do and every minute you spend chasing clients right now. This is valuable time you can get back through digitisation.
Utilise your community and raise this topic at networking events – people are usually very willing to share their learnings. Championing the need for digital transformation is a great way to get more support from the government (especially if your firm is struggling to find the funds for it).
Just don’t ignore the new risks – security and otherwise – this kind of transformation can open your business up to. Here are some tips for implementing the right cybersecurity strategy to keep your data safe.
4. Mindset and wellbeing
This one often falls to the bottom of the priority list. But it really shouldn’t be, with 61% of accountants claiming their mental health suffers because of work-related pressures, and record numbers of people not working due to ill health.
Taking care of your mental health is just as important as looking after your physical health. Think of the safety briefing the crew deliver when you board a plane: they ask you to put your own oxygen mask on first before helping others. If our own mental health isn’t in good shape, how are we supposed to manage others and do the best work possible?
You could start by reminding your team to prioritise exercise, as it makes you mentally sharper. Why not give walking meetings at try, if you’re able to? It’s amazing what fresh air can do, says Jo. Plus, it’s often easier to problem-solve outside of the office when you’re more detached from your work. It’s also important that employees are informed about the resources available to them, whether that’s counselling through the EAP, Diversity & Inclusion forums or weekly yoga sessions.
Managers should try to set a positive tone in the office (and over Slack). Encourage your team to take regular breaks and their full holiday allowance – you can easily role model this yourself. You might want to suggest choosing the ‘delay send’ option on late night emails or slack messages, so that people don’t feel pressured to reply out of hours.
5. Demonstrating your value
The recent economic downturn means prices have been pushed to the bottom, which has put pressure on firms to articulate their value. Add to this the ongoing impact of Covid-19, which put pressure on businesses to over-serve clients (which, in turn, inflates expectations), and you have the perfect storm for accountants looking for new business.
One way to demonstrate value is to consider new value-based pricing structures. Ultimately, your product or service only costs as much as someone is willing to pay for it. So instead of setting your price based purely on a markup from production costs, try leaning into customer perception to put a price on what you’re offering.
But, as Jo reiterates, price is not the only differentiator. Marketing is also key, so don’t stinge on this. While many businesses are putting the brakes on marketing, now could be a great time to invest. Thanks to an impending recession, it’s likely that media costs will be lower, so you could even save money on raising brand awareness.
Soft skills development can also help to set your firm apart from the competition. Managers might want to coach their teams to give them the skills they need to demonstrate the value they bring to new clients (or existing clients, if they’re trying to upsell). If you’re struggling with this, always start with the ‘why’. This is your value proposition and clients will see this.
While there are challenges around every corner, the key is taking the time to address these as soon as possible. Jo likens this to one of Steven Covey’s 7 habits of highly effective people: sharpening the saw. Putting effort into improving your tools and practices now will only serve to make you more efficient in the future. Now that you’re aware of the biggest hurdles your firm is likely to face, you can start using the tools at your disposal to overcome them.
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