Do you know what the future holds for the accounting industry?
With more firms offering remote services and adopting cloud workflows, the accounting world is changing rapidly. As an accountant, you need to stay up-to-date about new trends to optimize your firm.
Fortunately, our accounting experts at Gusto discussed different accounting predictions based on current trends. Gusto’s Editor-at-Large, Caleb Newquist, and the head of Gusto’s accountant community, Will Lopez, made educated predictions about the accounting industry in the January 19, 2021 episode of On the Margins: LIVE. Their predictions remain relevant as the accounting industry continues moving forward in the digital age. You can watch the entire video on YouTube here. While you’re there, you can also subscribe to our YouTube channel for more informative content about the accounting industry.
In this article, you’ll learn all about modern technology adoption in the accounting industry, enhanced marketing tactics, and why so many firms are hiring non-accountants.
Technology adoption and virtual accountants
Will predicted that the accounting industry’s cloud technology adoption will increase rapidly over the course of the next few years. As of 2021, only around 20% of American accounting firms incorporated cloud technology into their workflows, but many accounting firms started re-evaluating their workflows to stay operational during the COVID-19 pandemic:
“I think that 20% will go up to at least half [or maybe [over] 50%. … 74% of accountants have formally reviewed their business practices in the last 12 months. … [When the] pandemic hit, nobody was ready for it, at least a majority of firms that had treated their clients and their firm conventionally weren’t ready for it. Everybody had to pivot.”– Will Lopez
Many accounting firms had to shift their workflows to operate remotely. Adopting cloud computing technology is critical for seamless and secure remote workflows. Caleb predicted that the shift toward remote work will become even greater over the course of the next few years:
“I think half of the firms are going to keep this virtual firm approach. … I think a lot of people are going to demand it for the flexibility. Now that [people have] gotten at least somewhat comfortable with working from home, they probably realize what those benefits are. … People with young kids really like having flexibility in terms of their work and managing their family life. … I think it’s going to be important to those people to continue to have that flexibility.”– Caleb Newquist
Working remotely gives accountants greater flexibility, which is important for people who are also raising children.
Remote offices also have the added benefit of saving money. Will noted that many accountants worked remotely during the Great Recession of the late 2000s to save their firms money:
“One of the big behaviors that happened in the Great Recession was that when it hit, a lot of the accounting profession flocked to their homes … because they were trying to curb costs. Flat revenues were up, so the profession maintained flat revenues from 2008 to 2010. In fact, I think that was that fertile soil that led into the cloud revolution that took a foot in 2011 [through] 2013.”– Will Lopez
The global financial crisis created a necessity for remote work to save on operational costs, and as a result, more businesses started using cloud technology. Caleb thinks that more employees will eventually return to in-office work, but accounting firms will evolve because they can save money through remote work.
“Over a longer period of time, I think office space will come back because I think people crave the human connection. … That’s why I don’t think over a longer horizon it will really stick where you’re seeing 75% to 90% of your people working from home. I think it will end up somewhere in the middle. What firms are going to do in this time where virtually everyone’s working from home [is] they’re going to save a lot of money, and they’re going to really take a hard look at how they spend money on commercial real estate. … That’s what they’re going to lock into, is the working-from-home model.”– Caleb Newquist
Many accounting firms will continue functioning entirely remotely in order to save on operational costs.
Enhanced marketing for accountants
Because accounting firms are shifting toward cloud workflows and remote work, the way they market their services will also likely change. Accountants need to take a new approach toward winning over new clients and engaging with existing clients:
“With that work-from-home component, they’re going to have to figure out a way to market. They can’t just sell in person like they used to. They’re going to have to figure out new ways to acquire clients, how to communicate to clients, [and] how to meet them remotely, and that requires a little bit of a different thought process.”– Will Lopez
Remote accountants need to explore new creative methods for marketing their services without meeting with clients in person.
Although accounting has been viewed traditionally as a non-creative profession, more and more accountants are recognizing how creativity is important for developing marketing strategies for their firms. Sage’s Practice of Now report indicates that many accountants now recognize how creativity is necessary within accounting:
“[The Practice of Now report] found that a promising 38% of accountants who responded believe the majority of their daily tasks are strategic and require a dose of creativity. … I really predict that for the first time, we’re going to see a heavy effort to try to market someone’s firm better and just enhance the marketing behind it.”– Will Lopez
Will and Caleb predicted that with remote accountants’ need to market their firms in creative ways, they’ll begin emphasizing their remote capabilities and enhancing their reputations with certifications:
“You’re probably going to see [terms such as] ‘cloud,’ ‘remote,’ [and] ‘virtual’ on a lot more websites than ever before. … I think what you’ll also see is marketing to that end. I think you’ll see huge product adoptions [with] anyone who has certification [like] Xero [and] Gusto. … You’re going to see a lot more of the certification badges land on websites. … I think they’re going to make big strides in trying to spruce up websites, change terminology, and show off a little bit of that remoteness that they’ve learned.”– Will Lopez
Firms will put a greater emphasis on marketing remote work as more businesses shift to the cloud, and they’ll acquire certifications that prove their remote capabilities.
Hiring non-accountants for improved business practices and marketing
One major trend occurring within accounting is a greater focus on hiring non-accountants. Caleb predicted that this trend will continue increasing in the upcoming years:
“About 31% of new hires at accounting firms are non-accountants, so they don’t have an accounting background. I think … half of the hires made by accounting firms will be non-accountants, so they’ll either be marketing or they might be data science or computer science. … We’ve seen non-accountant hires increase pretty steadily over the past several years, but I think we’re going to see that accelerate. … 82% of firms say that they’re open to hiring from a non-accounting background.”– Caleb Newquist
More accounting firms are already starting to hire non-accountants for marketing and strategic purposes. Additionally, there’s a much greater emphasis on web design and online outreach because more firms are shifting to remote work, so there’s more of a need for marketers and other creative marketing professionals.
Another driving factor for the increase in non-marketing hires is that professionals are no longer restricted by their locations:
“I think talent is really not restricted by geography anymore, and so I think the possibilities are really going to be unlocked, and so I think you’re going to see that accelerate in the non-accountant hires.”– Caleb Newquist
Will noted that another critical factor in the increase in hiring non-accountants is the accounting skill deficit. There aren’t enough accountants to meet the current demand:
“There’s a collide of current conventional accounting education not living up to the reality of boots on the ground, and the only way a firm’s going to try to collapse the high demand from clients [is] to work virtually … [and] hire non-accountants, and then give them all the modern resources to spruce them up.”– Will Lopez
With an increased demand for accounting services, firms will need to get creative with how they serve their clients and be open to hiring non-accountants.
Learn more accounting predictions
This article only touched on a few of the many accounting predictions that we have at Gusto. Caleb and Will predicted that an increasing percentage of accounting firms will adopt cloud workflows, and they’ll focus on enhancing their marketing. Further, more firms will hire non-accounting professionals to meet the growing demand for accountants amidst the skill deficit.
If you want to learn more about the future of accounting, read other articles on our website. Additionally, you can also read Part Two of this webinar article series to learn about the value of cloud-based accounting.
Looking for more ways to enhance your accounting firm? Consider partnering with Gusto. When you become a Gusto partner, you get exclusive access to tools and resources to support your clients into the future. Streamline payroll and benefits, and start advising your clients in valuable new ways. Join Gusto’s Partner Program today.