Our top 5 predictions for the accounting profession in 2018
2017 has been a bumper year for the accounting industry.
In it, we not only saw £10m+ fines recommended by the UK’s accounting watchdog in the face of Big Four audit issues, but also weathered the introduction of MiFID II and began preparing for GDPR. Brexit still remains an uncertainty to be addressed in the coming months.
So, with such a glut of activity taking place in 2017, how exactly will the UK’s accounting specialists be impacted in 2018? We’ve listed our top predictions:
Technology will become a more ingrained facet of day-to-day life:
Deloitte and Oxford University carried out research in 2015 noting that 96% of what accountants and bookkeepers do will be automated as early as 2020. In 2018, then, financing models behind accounting firms will be required to change – dramatically. Whilst many firms today bill their services based on time, the accountancy firm of the future will begin to integrate fixed-cost pricing as a result of this.
The value of the expertise on offer, instead of the time taken to complete a task, will soon become the common currency as automation reduces the number of low-effort tasks for the profession.
Training and education will struggle to keep up with changing business requirements:
It’s a certainty that technology is changing the profession. Education, however, is struggling to keep up. Many courses now approved have roots in systems and processes that were relevant five years ago… whilst this would have been a valid timeframe a decade or two ago, the reality is that in an uncertain, ever-changing world, this is simply insufficient. As such, ACCA and AAT qualifications are set to become far more fluid in the quality, and indeed quantity, of the education they offer.
Employees with diverse skill sets will see their salaries soar as firms look to diversify:
With repetitive tasks delegated to automated processes, staff with the ability to work in harmony with this technology are set to stand far above their competition. As these staff are, naturally, in shorter supply than their counterparts, we expect to see a significant salary gap between employees with more diverse skill-sets as growing technological requirements rear their heads.
Staff retention will become a greater issue as workload exceeds staffing levels:
As with many other sectors in the UK today, accountancy is experiencing a skills-squeeze. According to the Financial Reporting Council, for example, the number of specialists in accountancy holding audit qualifications fell by over 10,000 in just two years. Contrary to this, demand for this service is at a peak – creating a dichotomy between supply and demand. This is not an example to be viewed in a vacuum, however. Instead, it is representative of accountancy as a whole.
Those bearing the brunt of this increase will undoubtedly be the staff working within the sector, creating something of a mismatch between workloads and agreed upon salaries. With the vast majority of organisations predicting greater workloads, businesses will need to look to other avenues of staff retention – namely, benefits in kind, branding, and the development of more attractive workplaces.
Accounting organisations will weather significant cyber-risk
It has been estimated that organisations across the UK are attacked, at a minimum, seven million times per year. Discounting the individual losses of these businesses, the damage to the UK economy has been billed at £5.26bn. For accounting organisations dealing with sensitive financial information for a variety of different businesses, then, the result is a target on the back of the industry.
Building on this, we see the coming of GDPR – a legal requirement to ensure that data is handled appropriately and within the realms of consent (among other specifics). One of the more well-known requirements of this regulation is that of security. Building on the Data Protection Act 1998, the risk of non-compliance is potentially huge fines.