Accountants who work in small and midsized practices are using more technology to serve their clients better, as well as attract and retain top talent, but are feeling pressures to lower fees and differentiate themselves from competitors, according to a new survey by the International Federation of Accountants.
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Over a quarter of the SMPs polled (28 percent) said they plan to allocate more than 10 percent of their practice revenue over the next year to technology investment, reflecting its critical importance in practice management and operations. The most frequently given responses to technological advances have been development of in-house expertise in IT and adoption and use of cloud options to better serve clients. In addition, 78 percent anticipate accountants’ roles in supporting small businesses would change to focus more on navigating new technologies in the next five years.
“As the first-choice strategic adviser to their clients, firms are recognizing the importance of adopting technology to provide insights and expertise and strengthen their role as trusted business partners,” said IFAC CEO Fayez Choudhury in a statement last week. “It is well-known that the majority of SMPs’ revenue is generated by traditional compliance services, but there has been an increase and diversification in the provision of advisory and consulting services that are real-time, forward-looking and based on specialized industry or sector knowledge, which is a trend we expect to continue in the future.”
Many firms are using technology to provide business insights from data analytics as a new service offering. A significant majority (86 percent) offer business advisory and consulting services, with a majority (51 percent) predicting a moderate or substantial fee revenue growth over the next 12 months in this service line.
Talent remains a major challenge for small and midsized firms. A 54 percent majority of the respondents said they have difficulty attracting next-generation talent, with 66 percent saying the number one reason is the lack of candidates with the right mix of skills. That points to the importance of continuing education and the development of new competencies for the digital global economy. Many firms have developed talent management initiatives to attract and retain their best staff members. The most popular type is flexible work hours or days.
Over a third (37 percent) of accounting firms plan to develop in-house skills and expertise in IT in the next 12 months. SMPs are finding themselves under pressure to lower fees (48 percent), differentiate themselves from the competition (46 percent), and keep up with regulations and standards (45 percent).
