With disruptions everywhere, the air is filled with expectation mixed with apprehension on what gets the boot and what gets rebooted in the accounting outsourcing industry. As technology finds its way into traditional bastions, the results are exciting, opening up more avenues for improvement. Here is a look at the top changes that can be expected in the accounting outsourcing industry in the future.
#1 Acute shortage of skilled accountants will drive outsourcing
The ICAEW reported that the vacancies for accountancy and finance related positions had shot up by 41%. This has resulted in a sharp hike in salaries extended by organisations in an effort to retain talent. Effectively, this means that organisations that have been unable to attract the right talent or are grossly under staffed in accounting and finance departments will increasingly look at outsourcing to meet the demand.
#2 The era of data security and regulations
Accounting services that are not compliant with the UK’s Data Protection Act or EU’s GDPR are bound to bite the dust. This is the era where regulations will begin to be strictly enforced and a string of sensational data leaks have spurred governments into action. All service providers in accounting and finance need to have robust security practices and processes in place. And this needs to be in compliance with regulations for it to matter.
#3 Brexit will see the exit of a large number of practicing accountants
Brexit will result in the exit of a large number of EU nationals employed in accounting and financial services. This exit will be compounded by problems of policies which will make it extremely difficult for businesses to retain the personnel. To put this into perspective, London employs almost 200,000 nationals from EU nations in this sector, and a sudden exodus will make it necessary for businesses to have alternative arrangements in place.
#4 Investments in technology supported solutions
As technology slowly wades into all areas of operations, accounting services are no exception. Accounting services need to take a leaf from the success of Fintech in delivering solutions to investors. Accounting services which is a mix of compliance, management of routine expenses, financial and strategic planning will benefit immensely from the spectacular advances in the three As of technology – Analytics, AI and Automation.
#5 Offer value additions to remain relevant
Accounting service providers have their task cut out here. This is quite simply borne out of evolving needs of the industry. Services are no more limited to just the basic bookkeeping or accounting. Services presently straddle all areas, similar to responsibilities of in-house accountants. The next level is certainly going to be the game changer, with businesses expecting the outsourcing industry to offer greater value additions and innovative services with measurable results.
#6 Search for services that blend technology with domain experts
Service providers who rely on technology need to ensure that this dependence is supported or supervised through strong domain expertise. In other words, accountants with a strong grasp of specific accounting standards need to be at the helm of affairs when technology is used for delivering solutions. This balance needs to be struck, failing which the quality of services will deteriorate.
#7 Cloud based solutions
The migration to the cloud will be more or less total in a few years, bringing the benefits of shared infrastructure to accounting service providers. This will enhance the manner in which information is queried and made available to stakeholders. Accounting outsourcing services need to fully embrace the cloud or be left stranded in the race for cost effective solutions and greater efficiency.
Six out of ten individuals in the UK use a smartphone. The percentage is higher among individuals in the younger age brackets. Smartphones have become the default devices for launching searches or browsing the internet, offering users the ability to do so on the go. This makes it all the more important for accounting outsourcing service providers to offer solutions that are optimised for viewing or querying through mobiles.
The trends for the accounting outsourcing industry will be bittersweet for service providers ill prepared to take the plunge into technology assisted solutions. The need of the hour is to offer flexible solutions to businesses. For solutions to be truly flexible, higher scalability options are mandatory, and this cannot be achieved without the assistance of technology and automation. Accounting service providers need to bring in the right technology and wed it with the skills of experienced and certified accountants to make the most of the acute shortage of resources in the UK.