Accountants have an exceptional initial grounding in academic learning, culminating in designatory letters and oversight by their professional accountancy body. However, in a world of constant legislative and regulatory change, it is essential to keep up to date. That’s where continued professional development (CPD) comes in. Accountants should be regularly focusing on remaining competent and professional to gain competitive advantage, stay legally compliant, improve knowledge and efficiency, while providing better advice to clients, says John Edwards, CEO, Institute of Financial Accountants (IFA).
Why does CPD matter?
Accountants are seen as the trusted business adviser to their clients and colleagues. Whether they are operating in business as a CFO, finance director, or financial controller, or in practice offering accountancy services to the general public and their businesses, they are seen as the ‘professional expert’ – the go to person for business and personal advice. CPD ensures accountants’ capabilities keep pace with the current standards of others in the same field, to ensure that they maintain and enhance the knowledge and skills needed to deliver such professional services.
Is the sector embracing CPD?
When it comes to the topic of CPD, accountants typically fall into two camps. A majority consider CPD in terms of the cost to the business – time, money and effort – while a smaller collective view CPD as an opportunity – to keep up to date and legally compliant, and to use as a differentiator from the competition. What’s clear is that regardless of your viewpoint all too often CPD becomes an afterthought in the annual fiscal plan, with research conducted by the IFA identifying that 1 in 5 accountants complete at least 50% of their annual CPD requirement within 30 days of deadline, and that 1 in 12 accountants don’t prioritise enough verifiable CPD each year.
As a professional body, the IFA sets an annual mandatory CPD requirement for all its members, of 40 hours per annum, made up of at least 50%, but preferably 75%, verifiable sources. It considers CPD an essential part of running a business: maintaining competence in every aspect of the services accountants offer to clients and playing an essential role in retaining repeat custom and attracting new clients.
The last two years have played an interesting role in the CPD landscape. The pace of COVID-related legislative change has forced very rapid adoption of information and a very reactive approach to CPD. If this was a temporary deviation from an otherwise established CPD pattern, it would be expected that accountants return to annual scheduling naturally. However, if anything, COVID, and the need for extremely reactive learning has further undermined an already weak pattern of CPD planning, and there is a risk that its reactive nature will see CPD uptake and forward planning diminish further, leaving accountants potentially exposed and underprepared for future changes.
How can accountants effectively implement CPD?
Maximising the effectiveness of CPD comes down to forward-planning; the IFA’s research has highlighted a trend of last-minute, which adds a sense of pressure and feelings of ‘cost’ to the business. Instead, it recommends a more planned annual schedule – at the beginning of each year reflecting on the services offered, self-reflecting on personal skills, reviewing the speed of change for their services, and then spreading this out over the course of 12 months. Assuming a true annual calendar, 50% of CPD should be selected and booked before January to complete by June, with the remaining 50% of hours to be completed in the second half or more usefully to be allocated to reactive topics in line with legislative updates and roll-out from Government. This way, it becomes an easy, manageable opportunity for the business, and assures considered value rather than a mad scramble to comply.
What are the benefits of CPD?
Considering CPD as an opportunity may be a thought-shift but it is a valid one. Differentiation is a core benefit – getting ahead of the competition and establishing a reputation as a niche specialist or market leader with cutting-edge knowledge. So too is the upsell potential, using newfound knowledge as a marketing tool to gain more work: one member firm in Bolton used Making Tax Digital to nearly double its turnover for the year. Finally, there are the tangential benefits; being part of a learning community, gaining expert support, feeding an inquisitive mind, and generally gaining confidence in areas of weakness.
CPD also has a significant role in supporting accountants to be early- or -on-time adopters, deriving value from modern practices and developing skills for which demand is skyrocketing. A separate IFA survey of members highlighted the potential shortfall in accountancy knowledge, with 75% of respondents saying that they had at best ‘some knowledge’ of blockchain and cryptocurrencies, 55% indicating a low level of knowledge of AI, and 15% indicating no technological knowledge at all for example. In the same survey, 58.6% identified specialist skills in areas such as R&D, fraud prevention, and capital allowances as highly important for training, while environmental ESG reporting was also cited as a significant opportunity. CPD can resolve these knowledge gaps, providing accountants with essential knowledge and market opportunities.
Are there big downsides to foregoing CPD?
For anyone still not sold on the advantages of early CPD planning, it may be worth considering CPD in terms of risk to a business. Tangible consequences may not have been seen from poor CPD planning (yet), but that doesn’t mean risk in the future doesn’t exist. At best, being out of date or behind the curve will result in a loss of clients – the accountant or agency simply aren’t providing the service that is expected. At worst, the danger of out-of-date knowledge is the direct cost of claims on professional indemnity insurance and potentially, a firm’s entire business and livelihood, plus the possibility of being referred to the regulatory committee and fined for non-compliance too.
Making CPD an essential part of monthly workload and planning it to coincide with natural troughs in the fiscal calendar is strongly recommended. It is advised to pick training which is relevant and timely and has the added benefit of academic endorsement where possible, as well as an established learning community for peer advice and support. Finally, leaving it to the last minute is a no-no – it can diminish the relevance and value, and as a professional, who needs or deserves this?