“Had you told me 12 months ago that 2022 would take us even further off the beaten track than the previous two years, I wouldn’t have believed you,” comments John. “The heart-breaking invasion of Ukraine and the ensuing global market shocks, not to mention diminished food security and sky rocketing energy prices have made fools of forecasters. Yet conversely, the accountancy sector has continued to operate largely as expected, and we’ve seen some good among the bad and the ugly. As we look ahead to 2023, change remains inevitable, but there’s some positives on the horizon.”
Supply chains in the spotlight
Accountants have an opportunity to once again exercise their positions as helpful friend to businesses, as companies seek to shore up supply chains and obtain some much-needed stability. The pandemic came on the heels of Brexit negotiations, and altered supply chains perhaps irrevocably. The invasion of Ukraine has changed things further, causing mass disruption across the world. The result is a prompt for supply chain diversification as businesses seek to balance risk, and secure consistency, while agile financial leadership is also required.
John comments “Speaking to our members, the sector is collectively seeing clients favour geographic proximity and supplier independence over cost and ease of sourcing. In response, many are selecting European or potentially even UK suppliers, and most are shying away from the traditionally centralised sourcing model via brokers to build direct connections with providers instead. This leaves many grappling with insufficient resource or knowledge to properly quantify the change, even as they are driven by the potential rewards, nay necessity, of making the switch. Accountants have the opportunity to provide unique insights and robust change management models to facilitate these shifts without negative consequences.”
Sustainability by stealth
Despite increasingly urgent assessments of climate change, the majority of businesses are only just beginning to turn their attention to the need to be net zero and to measure their environmental impact. Slowed by the challenges of the last few years, it is likely that presenting accountants with the opportunity to quantify and assess impact, and convey positive developments.
John explains “The energy crisis has fuelled mass concern and while current government grants are offering temporary relief, most businesses are seeking long-term solutions to the potentially high prices. Remote working once again becomes appealing, while infrastructure investment such as renewable generation, insulation, and building fabric improvements can all offer potential gains. The majority are considering this from a cost perspective, seeking some stability in a potentially turbulent future, but in reality, these measures also offer gains as part of a business’s Environmental, Social and Governance (ESG) credentials. Accountants can utilise their established reporting and data analysis skillset to offer businesses the opportunity of good news gains. It’ll be interesting to see how 2023 shapes the environmental agenda, and how accountants play a big role.”
An outsourcing boom
With experts placing us in the “great attrition” seeing waves of employees leave their existing roles, coupled with rising costs and wage demands, it is no great surprise that accountants are considering an alternative. John predicts “We anticipate a rise in offshore services and a boom in the use of service providers to fulfil many of the standardised client functions. It is not a case of qualification but of resource that is challenging UK firms – offshoring can offer cost-savings, among other benefits including increasing operational efficiency by alleviating day-to-day pressures. It also provides flexibility and enables access to a more diverse range of skills while offering a reliable resource that has immediate capacity. This frees up UK accountants to focus on strategic guidance rather than day-to-day delivery. Arguably, the technical revolution and cloud accounting has made this possible, but it is a staffing and skills shortage that is truly driving change.
Even more digital transformation
The accelerated shift to digital transformation amid unprecedented levels of cloud accounting, coupled with the ongoing roll out of Making Tax Digital is set to be a key theme for the foreseeable future. John explains “New, emerging technologies will begin to gather steam, such as blockchain technology offering security enhancements, and readily available computing software offering accessible process automation. We will also see big data growing in significance as the recession bites, providing firms and individual accountants with an opportunity to upskill. Demand will grow for services relating to the provision of insights and analysis on operating efficiencies, for instance. I view this as a time that will also drive additional demand for training, as businesses can and should seek to stay ahead of the curve and deliver competitive gains.”
Value-oriented services
The last financial crash delivered a shift in pricing models to adopt value-based pricing. As costs rise and businesses come under increased pressure, an eye to value for money becomes an ever-increasing focus of any relationship. John considers “I am intrigued to see whether this recession will pan out in the same way as previous economic down turns, with a shift to value-based pricing that connects cost to the outcome. It provides reassurance to clients, but I know that many accountants are reluctant to place such focus on cost. Instead, I wonder whether firms will adopt the alternative; prioritising communication and client connection, at the same time offering advisory services and value-added advice that presents the business case for a continued relationship. It wouldn’t surprise me if we also see a spate of mergers and acquisitions within accountancy to add specialism within teams, too.”
