Future of Professional Accountants
As rules and regulations change, new technologies develop and administration costs rise, a number of trends will emerge in the accounting profession. One of these trends is increased focus on personalized and custom tailored client services. The need for accounting firms to provide enhanced customer services by leveraging technology to automate business processes will be critical to the future success of many accounting firms. In the accounting profession, client service has progressed from the traditional one-on-one connections to a continuous loop of engagements and endless opportunities. These engagements require personalized services and innovative customer experience (Zeff, 2003, p.192).
According to Oler, Mitchel and Christopher (2010, pp 642), the most important future trend in the accounting profession is that smaller firms will coalesce to form large firm offering integrated services. Currently, the accounting profession operates more like a cottage industry made up of primarily small partner owned businesses. There are about 2 million of these businesses in the worldwide. Less than 70, 000 of those accounting firms earn revenues of over 3 million dollars a year. As demand for integrated and innovative accounting services heightens and competition becomes stiff, these small firms will need to combine forces to offer a broad range of services. In addition, rising wages, fee pressures and lack of quality staff will force many accounting firms to reexamine their positioning in the industry and service mix relative to their technical resources and competition. This will force accounting firms to acquire advisory and consulting firms from other industries (such as human resources, law and management consultancy) to complement their traditional services and offer more integrated services.
The third future trend in the accounting profession is that leadership training and career development will grow at unprecedented rates as the need for quality professional staff become acute. Many accounting firms, especially small and medium size ones will have no choice but to invest in the brightest and best minds at all stages of career development. This will help the firms to remain competitive and capable of catering for succession planning needs. The obvious impact this trend will have on the professionals is that unmotivated accountants will fade gradually. Statistics indicate that there are thousands of accountants with modest skills making comfortable living but adding limited value to their firms. As the industry becomes very competitive, the motivation of accountants needs to change as well.
Fourth, business coaches and consultants will aggressively pursue clients in the accounting profession. Traditionally, business coaches and consultants are known to offer management, leadership, human resources, marketing and sales services to the business community. In future, they will expand their services to cater for the needs of the accountants. With correct tools and motivation, they can venture into the accounting profession with minimal hurdles. When that happens, it will erode away some of the revenue that accounting firms enjoy (Labardin & Marc, 2009, p.153).
Another trend is that web based technologies will drive business efficiency and compliance in the accounting profession. There are already several web based accounting tools, which business owners can use. However, there will be many more sophisticated but more user-friendly ones. As information technology advances, web based functionalities will improve too. Part of these functionalities will be prominent when accounting software seamlessly integrates with government taxation and compliance requirements. When the integration happens, it will be easier for companies to get their compliance done without resorting to the services of accounting firms. In effect, this will mean gradually decrease the need for traditional accountants who offer little value except preparing financial statements (Gordon and Jason, 2009, 34).
Lastly, the partner structure, which characterizes many accounting firms, will pave way for a more corporate type of structure. To remain competitive and capable of meeting diverse client needs, many accounting firms will need to hire professionals from outside the accounting profession to assist in managing the firms (Coyne et al., 2010, p. 636). This will cause need for review of the partner structure, which has dominated the industry for many years. Where partner consensus on succession planning will be difficult to reach, many small firms will split. For those companies that wish to retain the partner structure, compensation of partners will be geared towards high levels of profitability and revenue growth for the success of the firm. Moreover, alignment of the firm’s business goals with accountability and partner performance criteria will be a key objective for accounting firms (Coyne et al., 2010, pp. 634–641).
While the above trends will not apply all at the same time, what is clear is that many accounting firms will have to make strategic decisions and implement new business strategies in order to succeed in an increasingly competitive environment. Generally, each trend presents immense opportunities for accounting firms to boost profitability and productivity. If not taken advantage of, the trends can be a major threat to the growth of many accounting firms. By keeping abreast of key trends in the industry, accounting firms can be more successful in charting a course for future business growth.
References
Coyne, J. G., Scott, L. S. Brady, W. & David, W. 2010. Accounting Program Research Rankings by Topical Area and Methodology. Issues in Accounting Education, 25(4), pp. 631–654.
Gordon, T., and Jason, P. 2009. Reading and Understanding Academic Research in Accounting: A Guide for Students. Global Perspectives on Accounting Education, 6, pp. 25–45.
Labardin, P. & Marc, N. 2009. Accounting and the Words to Tell It: An Historical Perspective. Accounting, Business & Financial History, 19(2), pp. 149–166. [Online]. Available at: <https://www.researchgate.net/publication/46528331_Accounting_and_the_words_to_tell_it_An_historical_perspective>
Oler, D., Mitchell, O. & Christopher, J. S. 2010. Characterizing Accounting Research. Accounting Horizons, 24(4), pp. 635–670.
Zeff, S. A. 2003. How the U.S. Accounting Profession Got Where It Is Today: Part 1. Accounting Horizons, 17(4), pp. 189–205.
