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If we have learnt anything from the upheaval and disruption of the past few years, it is to expect the unexpected. This seems to be the consensus as we head into 2023, yet despite these uncertainties the industry is making headway thanks to innovation and digitisation. John Edwards, Chief Executive and Group Executive International of the Institute of Financial Accountants (IFA), reveals his key trend predictions for the coming years.
“Had you told me 12 months ago that 2022 would take us even further off the beaten track than the previous two years but for very different reasons, I wouldn’t have believed you,” comments John. “The heart-breaking invasion of Ukraine and the ensuing global market shocks, not to mention diminished food security and sky rocketing energy prices have made fools of forecasters. Yet conversely, the accountancy sector has continued to operate largely as expected, and we’ve seen some good among the bad and the ugly. As we look ahead to 2023, some new and existing trends top my list of predictions”.
More sustainable solutions to the energy crisis
“While undoubtedly businesses are being hit hard by it, the energy crisis may prove to be positive – ultimately,” John remarks. “We’re seeing investment in renewables being fast-tracked which should accelerate the rollout of cleaner, sustainable, renewable energy such as wind and solar. We need to secure our energy supply and contain costs, and now it’s all about how quickly we can get there. With long-term turbulence a likely result of the crisis, it also has the potential to provide Environmental, Social, and Governance (ESG) gains.”
He continues: “It is predicted that more and more companies will be held accountable for their carbon emissions as Net Zero is now an almost mandatory target and impossible to ignore. This offers a huge opportunity for accountants to leverage their established reporting and data analysis skillset.”
Outsourcing bloom
“With staffing continuing to be a significant issue for most accounting firms we anticipate a rise in offshore services and a boom in the usage of service providers,” John predicts. “The sector is facing a major skills shortage due to a culmination of factors – work-life balance, mental health, the cost-of-living crisis, inflation, and staff shortages.”
He remarks: “Firms are seeing a wide range of benefits through offshoring which go beyond purely making cost savings. Offshoring also increases efficiency and flexibility and enables access to a more diverse range of skills while providing a reliable resource that has immediate capacity. In addition, it can free up UK accountants to focus on strategic guidance rather than day-to-day delivery.”
“This rising demand for offshoring services has been reflected in a number of outsourcing providers approaching the IFA, as an internationally recognised professional accountancy body, seeking to accredit and align their employees and agencies with UK tax and law,” John continues. “I expect to see this trend picking up significantly in the next two years as usage of these providers increases, particularly with the greater adoption of technological advancements such as cloud-based computing. It is completely plausible that we could also see many smaller practices merging to gain efficiencies around skill sets and service delivery.”
Supply chain flexibility
“The knock-on effect of a damaged supply chain caused by the ‘perfect storm’ of the invasion of Ukraine, the pandemic, and Brexit, will rumble on into 2023 and beyond,” suggests John, “triggering the need for diversification and agile financial leadership. Traditional supply chains now look to be broken indefinitely as businesses instead focus on locality and independence to help regain control and restore a sense of certainty.”
He adds: “This presents a golden opportunity for accountants who can support with supply chain diversification. Trying to strike a balance of cost management, consistency, and quality when grappling with supply chain instability might be a tall order for many businesses which lack access to a pool of resource and expertise to guide quality change. Accountants can offer a quantified business case into moving supplier using their unique insights into the risks and rewards involved and strengthen their proposition to SMEs and larger organisations.”
The era of digital finance
“Digitalisation will be the lasting trend for the coming year as recession and supply chain disruption bring efficiency into sharp focus and technology offers both the insight and the solution to streamlining,” John explains. “We are in the age of digital finance and the appetite for tech will continue in leaps and bounds. New and emergent technologies such as AI and robotics will begin to gather momentum and while only the most progressive organisations will start using the metaverse this year, other technologies will begin to reach maturity. For example, blockchain technology will offer security enhancements, readily available computing software will provide accessible process automation, and big data will grow in importance as accountants are called upon to provide insights and analysis on operating efficiencies.”
John concludes: “Accountants need to identify how they can upskill at a pace that enables them to take advantage of these efficiency gains as tech will continue to empower the accountancy profession to expand its scope to record more types of activity than ever before.”
