With all the shocks this year, even the new Chancellor now heralds a new set of Spring/Autumn Budgets/Statements, it is clear that the world is changing...but are accountancy firms keeping up?
Kirsty McGregor, Chairman of The Corporate Finance Network, comments following the Autumn Statement, with a slightly different slant on the issues of the day.
"There’s no doubt that the future is a little impossible to predict at the moment! Even the Chancellor of the Exchequer isn’t willing to make a prediction! But one thing is for sure, there is definitely going to be change!
Change has already been quietly happening, but I have the distinct impression that the vast majority of accountancy firms aren’t moving quickly enough to adapt, and there will be some shocks for many practitioners!
As accountants, we need to look at the whole business world as well as focusing on what’s happening with our own business, ie the profession. ‘Making Tax Digital’ will eventually be here, but that’s just the tip of the iceberg. An overhaul of our whole purpose and role is needed, we are past the stage of tinkering around the edges.
As a trainer and mentor to numerous firms around the country, here’s a round-up of some things that I regularly see that firms are missing:
- Compliance fees have been forced down by legislation, by technology and by new entrants to the market – so are you identifying what advice and support your clients actually need and are willing to pay for, or are you still trying to ‘sell’ them the same products you have for years?
- The UK has more start-up businesses than ever before (approx. 1 in 5 of all businesses were set up in the last 10 years) and they are typically not using accountants for the traditional services they were 10 years ago – what do you offer start-ups and younger businesses? Are your prices in line with market expectations? eg an entrepreneur can set up a new company for £15 on Companies House. They won’t pay you hundreds of pounds for it, no matter how you try and wrap it up with other advice. And do you understand the alternative methods of raising finance that younger businesses are more likely to want to use, for example? Or are you just going to expect them to go it alone?
- The culture and expectations of GenY is very different to previous generations. They work 24/7 (yet don’t see that as a problem with work/life balance) and employ very few people. The increase in the use of freelancers, entrepreneurs running multiple micro businesses and mobile working means that the days of businesses having premises, employing 50 or 150 people are likely to change rapidly over the next 10 years. Does your brand and offering appeal to GenY? How/when do you communicate with them? They want to work with like-minded advisers that understand how they work.
Without doubt, the landscape of UK businesses is changing rapidly. The rise of the younger entrepreneur continues unabated. There is an inevitable increasing number of retirements of older business owners (and probably the subsequent winding up of their businesses if they’re not sellable). The changing nature of working practices is growing, with the increased use of freelancers rather than employees, micro businesses being the norm, and available tech or other suppliers (their bank, accounting software, larger businesses/retailers, incubators/hubs) all willing to support them in their entrepreneurial efforts.
So are our professional bodies recognising this and helping our profession thrive (nay, survive) in the future? Well, ICAEW launched an advertising campaign just 12 months ago entitled ‘Your business is in safe hands’ and advertised in seven national print newspapers and 21 regional print newspapers, plus two radio adverts on Absolute and LBC. I ask you to consider, how many younger entrepreneurs will these adverts have reached? What audience are they trying to attract when advertising in this way? Will that campaign reach the 1m start-up businesses?
I am very concerned about the future of our profession. The government is pushing investment into new start-ups and as a country we are very entrepreneurial and becoming more so. But will firms adapt to the new way in time? Or will Xero, Amazon or Tesco become the business advisers of the future for this multitude of GenY business owners?
So this is a call out to individual accountancy firms - this is your time to reflect on your strategy, products and pricing. Become part of this exciting world, which will soon be the new norm, before you miss the boat!
For advice on how membership of The Corporate Finance Network could help you attract more clients, please contact info@TheCFN.org.uk