Without enough talent to service clients and grow firms, can this age-old professional service continue to prosper in the twenty twenties?

At Active, we know the operational and resourcing challenges faced by many mid-size to large firms. And we believe that embracing the power of automation is one solution (of many) for reducing the impact of the talent shortage and ensuring your firm’s future prosperity.

Let’s take a look at the key challenges facing today’s firms, and how smart use of automation sets the foundations stones for a healthy, 21st-century accounting firm.

Understanding the major challenges facing your firm

As a practitioner in a busy firm, you’ll know the challenges of resourcing your team and keeping the firm ahead of the curve when it comes to advances in accounting technology. Growing your client base and meeting the firm’s strategic goals is difficult, and that’s bad news for the future outlook of both the industry and the UK businesses that your firm services.

To grasp the true context of the problem, let’s dig a little deeper into the three key challenges:

1. Accounting firms are faced with a significant talent shortage – Globally, accounting firms are struggling to source the best talent. Fewer graduates are entering the profession, and many experienced accountants are leaving the industry. That’s a warning sign that can’t be left unchecked. According to a new survey by outsourcing specialists Advancetrack, 45% of firms are ‘severely’ or ‘significantly’ affected by skills shortages. And, more worryingly, 74% of respondents said shortages within the sector have got significantly worse over the past three years.
2. Technology is changing the way the accounting industry operates – The emergence of online accounting, software automation and AI are transforming the way that compliance work is carried out. Basic record-keeping, bank reconciliation and workpaper procedures can all be automated. This improves efficiency, standardises internal processes and gives your staff more time to focus on high-value work with clients. But to get to this point, firms need to overcome their ‘techno fear’ and switch over to fully digital systems that can offer these automation capabilities.
3. The role of the accountant is changing and moving towards deeper business advice – online accounting platforms like Xero, QuickBooks and MYOB have made it easier than ever for business owners to run their own financial management. With much of the basic compliance now taken care of in-house, businesses expect accounting firms to offer more than just the basics of bookkeeping and accounting. The 21st century accountant is expected to be a mix of business adviser, strategic coach and accounting tech specialist – but some firms have yet to make a meaningful shift away from compliance and into the brave new world of advisory services.

Overcoming these three challenges won’t be an easy task. But there are strategic and tactical ways for your firm to lessen the overall impact.

Rethinking how you manage your people strategy

The talent shortage in accounting is a global phenomenon. According to the Wall Street Journal, between 2020 to 2022, more than 300,000 U.S. accountants and auditors left their jobs. 70% of UK accountants list a talent-related issue as their highest concern, according to a new report from the ICAEW.  And in Australia, a study by recruitment firm People2people found 46% of accounting teams needed personnel, with 6% ‘significantly short-staffed'.

Globally, baby-boomer partners are retiring, senior Gen X and Millenial employees are leaving the profession and Gen Z graduates are looking outside of accounting for their career start.

What does this lack of talent, both new and old, mean in real terms? A lack of staff is leading to problems resourcing jobs, a dearth of talent in certain key areas and difficulties in taking on the client work that’s needed to meet firms’ growth and profit goals.

In other words, the talent shortage is a serious hurdle for many firms! So, what can your firm do to stand a chance of leaping over this hurdle?

• Get fully organised with your staff resourcing – having the right people, in the right place, at the right time is key to effective resourcing. Project management tools like Acello, Kantata and the AI-powered Dayshape have advanced resource management tools that make it easier to source the right mix of internal people for each job. In turn, this helps you utilise your available talent at the perfect time for the engagement.
• Embrace the benefits of outsourcing – if you can’t source the talent you need in the home market, why not look further afield? Outsourcing providers, like Advancetrack, offer ways to engage qualified accounting talent from locations such as India and the Philippines, either on a contract basis or as direct hires. Outsourcing your compliance work to an offshoring provider helps to ease your resourcing issues, while maintaining the same quality of work. It also allows you to ‘turn on the resourcing tap’ as the firm grows and scales up.
• Work smart and do more with less people – finding a way to increase headcount is key to overcoming the talent shortage. But it’s also important to review and re-assess how you manage the main areas of work within the firm. Where are the major inefficiencies? Could headcount be refocused on important client-facing business areas? How could technology be used to ease the strain on your resourcing?

Using automation to lessen the impact of the talent shortage

Keeping abreast of the latest technology may be demanding, but areas like software automation can have a hugely positive impact on the efficiency, productivity and profitability of your firm.

Automation helps to build efficiency, scalability and standardisation into your firm's 2024 strategy, while also cutting costs and reducing the firm's need for a large headcount.

Using accounting tech with built-in automation tools helps your firm:

• Automate bookkeeping and data entry – basic record-keeping needn’t be a laborious manual chore. Automated bookkeeping solutions allow client receipts and documents to be scanned, digitised and ported over to your ledgers. For example, Dext Prepare can easily streamline the whole bookkeeping process, saving hours of business time.
• Automate bank reconciliation and reduce manual errors – you can eliminate time-consuming manual bank reconciliations and free up your team’s time for higher-value client work. For example, Xero integrates with most major banks to offer automatic bank feeds and categorises transactions using smart machine learning.
• Automate reporting and offer enhanced client insights – automated reporting tools help the firm deliver deeper financial analysis, better business advice and stronger client relationships. For example, Fathom combines insightful reporting, fast cashflow forecasting and actionable financial insights for your clients.
• Automate your workpaper procedures – by automating and standardising your workpaper process you not only save time, but also add the benefits of having consistent, firm-wide procedures across all teams. For example, Active by Business Fitness offers a powerful suite of automation tools designed to streamline your accounting firm's workpapers and workpaper processes.

Active: your flexible route to automated workpapers and efficient engagements

There’s no single solution to the ongoing talent shortage in accounting – it’s a complex problem where multiple changes will be needed to find a long-term resolution. But embracing software automation is certainly one way to ease your ongoing talent and resourcing headaches.

Automating your workpaper process with Active gives you a fast, standardised process that works across the whole firm.

The Active Platform offers:

1. A hybrid approach to workpapers that combines Excel with a SaaS interface via Microsoft 365 in the cloud, giving you the best of both worlds.
2. Powerful API connections and links that allow data to be loaded and refreshed instantly from a range of major cloud accounting providers.
3. A comprehensive set of standard workpapers, with a full stack of regularly updated worksheets for you to use.
4. Standardisation of your workpapers across the firm, whether you’re working on company accounts and tax, or individual planning for personal tax.
5. Increased visibility over job matters, with various matter types available, alongside health check tools and a full audit trail from start to finish of the engagement.
6. Enhanced data security, with ISO27001 accreditation, secure access via single sign-on (SSO) and all data stored in Azure cloud across local Microsoft data centres.

Try Active and see the difference that automated workpaper processes can have for the productivity of your engagement team – and the overall efficiency of your firm.

Sign up for your Active demo

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