Date posted: 04/04/2024 5 min read

Three accounting trends firms shouldn’t ignore

Recent research confirms three make-or-break trends that accounting firms can’t afford to ignore, says David New, managing director, APAC at Ignition. Brought to you by Ignition.

Ignition’s recent survey of 136 accounting professionals across Australia reveals accountants face a triple threat in 2024: Too much work, too few people and too late to move on technology.

In the survey, 58% named recruiting staff and staff shortages as a top business challenge this year, followed by lack of time to implement tech (49%), inefficient or manual processes (40%) and too much client work (38%).

Many accounting leaders are prepared to face these challenges head on. Over half (54%) want to learn how to improve firm efficiency through automation, while 41% are keen to learn how to leverage AI.

With OpenAI naming accountants and tax preparers among the occupations exposed to AI, firms need to embrace the tech or risk being left behind. So, what’s behind these trends and how can accountants best prepare?

Dvid New, IgnitionPictured: David New, Ignition.

Trend #1: Managing scope creep – and monetising it

Ignition’s State of client engagement report shows unrecovered out-of-scope work costs Australia’s accounting and bookkeeping firms over A$103,000 on average, each year.

This presents an opportunity to turn scope creep into revenue, if leaders define and discuss the scope of the original project with clients frequently and offer the choice to add deliverables at extra cost.

Firms also need to accurately price their services to avoid scope creep and remain competitive. Many struggle to do this without undercutting their value, because they use bespoke pricing or packages which don't match the hours dedicated and the client’s expectations.

Trend #2: Finding and retaining talent in non-traditional ways

According to CA ANZ, in five years there could be a supply shortfall of around 29,865 accountants if no action is taken by the government or industry. Firms are under pressure to fill talent shortages with salary increases.

As a result, more firms may look to countries with lower labour costs to find qualified staff. Outsourcing and the use of contractors will accelerate as demand for accounting services outstrips talent supply.

Trend #3: AI is a double-edged sword for firms looking to fill skills gaps

Microsoft research suggests 36% of an accountant’s job could be automated and 26% assisted by generative AI.

While AI can be used to close the workforce skills gap by taking over routine and manual tasks, it will deepen the need for specialist AI digital skillsets, currently missing in many firms.

Combined with the shift to advisory, accounting professionals may need to evolve into “technologists”, so more firms will need to invest in training to take advantage of these tools and stay ahead.

These challenges are by no means insurmountable. Leaders who rein in scope creep, rethink workforce strategies and use technology to improve billing, payments and pricing can help steer firms towards profitability. 

Three accounting trends firms shouldn't avoid