Accounting has evolved dramatically over the last 26 years or so and continues to undergo major changes. Let’s take a look at 3 major shifts in accounting which have taken place over the last 25 years or so and 7 ongoing trends and shifts which will shape the future direction of the profession.
Let’s address this topic first-off as technological advancement has had major impact upon the accounting field.
In 1989 accountants used pen and paper, typewriters, manual calculators and old, cumbersome dot-matrix printers and photocopier machines. Then came computers and the magic of email. Now things look dramatically different.
While an accountant’s day to day work can be completed much quicker with fancy new technology thanks to digitisation, cloud accounting software and big data, it has also meant that accountants are increasingly having to adapt and master new technologies to retain their competitive edge.
Experts are predicting by August 2016, 50% of Australian accounting firms will have switched-over to cloud software!
Forensic accounting is a relatively new accounting field which has only been around for the last 16 years or so. Forensic accounting requires practitioners to have an understanding of what lies beyond the numbers and possess investigatory skill as much of their work involves getting to the bottom of corporate scandals involving fraud.
Increasingly Executive Committee members and Managing Partners will feel the heat from partners to perform, lead and manage successfully. Underperformers will need to up their game.
Many new progressive accounting firms are adding legal services to their repertoire to complement their existing accounting services. Most are focusing on those legal areas which play to their strengths such as immigration and labour.
According to the President of Accountants Advisory Group, Joseph Tarasco, there are a number trends and changes which will continue to gain traction:
1. As competition intensifies with more players entering the market, niche, industry and segment profit centres will feel the pressure rise to produce results.
2. More accounting firms will add consulting & advisory services in order to provide clients with integrated solutions.
3. It is likely leadership training and career development will gain momentum within firms as they recognise the need to nurture their best and brightest into managerial and partner level roles to retain their competitive edge.
4. Those businesses which have continued to grow through consolidating older practices will undergo an increase in mergers of mega-firms with even larger firms to deal with burgeoning succession issues.
5. A corporate-type structure will take the place of the traditional partnership structure. Many businesses will employ a professional Chief Financial Officer from outside the accounting profession to help run the firm.
6. It will becoming more and more commonplace for innovative, progressive firms to link a partner’s performance criteria & accountability with the business’ vision and goals.
7. Smaller firms will suffer most as the partner’s butt-heads over succession planning and don’t articulate and communicate a clear vision for the future of their business.