The demands on the accounting profession have changed in unexpected ways in recent years, driven by increasing regulatory complexity, the need for specialization, the globalization of businesses, and shifting demographics. In addition to this are economic factors, which will not only challenge some firms, but will also bring new opportunities.
CCH, a Wolters Kluwer business conducted a nationwide survey of accounting firms to take a closer look at the issues firms face today and the trends that will influence the profession over the next three years. The results provide professionals with a practical, inside view of what firms of all sizes see as opportunities and challenges and what they are doing now to prepare for tomorrow.
According to the findings of the nationwide 2008 CCH Accounting Trends Survey, firms will pursue continued growth through:
- Client specialization and client service excellence;
- Recruiting and retaining talent, and;
- Efficiently and effectively leveraging employee and client knowledge.
The top challenges they face:
- Growing the business;
- Keeping current with technology;
- Productivity; and
- Finding and retaining staff.
The overall survey findings were released this week at the CCH User Conference, as over 1,000 tax and accounting professionals gathered with CCH executives and other industry leaders in Palm Desert to learn about and share best practices to build business success.
CCH President Mike Sabbatis shared survey findings with attendees in his keynote address, focusing on the theme that "The Future is Connected." Sabbatis focused on technology as an enabler of workflow and personal connections that firms can leverage today to be ready for future opportunities and challenges.
You can request complete copy of CCH's white paper on the 2008 Accounting Trends Survey.
Trends in the Profession
As firms address the opportunities and challenges ahead, the CCH Survey identified five key trends that are emerging within the accounting profession:
- The need for continued growth is driving greater client specialization and firm alliances to expand and enhance client service.
- Increased efficiency and productivity needs require the accelerated adoption of paperless workflows and technology.
- Staffing challenges and increased emphasis on collaborative culture compels the adoption of knowledge management practices and tools.
- Demographics and cross-generational demands are requiring firms to become increasingly flexible and creative to address staffing issues.
- Meeting client, firm and employee needs requires anytime, anywhere access to information and knowledge.
Greater Specialization and Increasing Alliances
The CCH Survey found that one-half of firms nationwide report that specialization is important to their future growth. Two-thirds (66 percent) of firms report that their specialized services are growing and most plan to both drill deeper into the areas of specialization they currently offer (64 percent) as well as to become more specialized in particular practice areas (59 percent).
More firms also are becoming members of professional networks to serve the geographical and specialized needs of clients. In fact, 38 percent of firms report being part of a regional, national, or international alliance and an additional 27 percent expect to become members of such alliances within the next three years.
Accelerated Adoption of Paperless Workflows
The majority of firms believe paperless processes are critical to their firm's future success (64 percent) and 62 percent say that their use of paperless solutions will evolve quickly over the next 12 months, according to the survey. Firms report that among the top benefits of adopting paperless technologies are to:
- Improve client service, 76 percent;
- Improve competitiveness, 71 percent; and
- Increase efficiency, 67 percent.
"The adoption of paperless workflows is reaching critical mass as firms widely recognize that paperless solutions are at the core of growing their business," said CCH President Mike Sabbatis.
Among the most frequently used paperless approaches today are:
- Scanning source documents, 78 percent;
- Storing scanned documents on a network drive, 77 percent; and
- Performing onscreen reviews of tax returns, 71 percent.
"It's clear that given where firms are today, their focus is on quickly laying the groundwork for a paperless environment," said Sabbatis. "In three years, leading firms will be more fully leveraging paperless with more dynamic technologies resulting in further improved efficiencies and productivity."
The CCH survey white paper offers a Best Practices Checklist for going paperless.
Drive for Greater Knowledge Management
In today's environment, where the demand for client services is high and the need for value-added, specialized and geographically expanded services is growing, knowledge and the knowledge worker are at the center of a firm's success. Firms, however, face no small challenge in their ability to protect, leverage and grow the important asset of knowledge.
To date, much of the focus on the need for knowledge management has been driven by the threat of the loss of expertise resulting from the retirement of the baby boomers. But that's just one of several factors driving the need for firms to be proactive in their planning and implementation of knowledge management.
Firms also need to consider the expectations of their clients, who want the best the firm has to offer – increasingly across a wider spectrum of needs, locations and hours. Firms also must recognize that as the need for client specialization is climbing, the availability of specialists is shrinking. Additionally, there are the generational issues and the need to tap into the talent of younger professionals who thrive on social and business networking, collaboration and the creation of community.
Based on the convergence of these factors, the importance of knowledge management to firms is shifting from optional to critical. Today, one in five (21 percent) of firms surveyed reported they have a knowledge management program in place. The CCH Accounting Trends Survey found, however, that 59 percent of firms expect to have a program in place within the next three years.
Among firms that have or plan to implement knowledge management programs, the most cited benefits include:
- Increased efficiency, 75 percent;
- Improved client service and increased productivity, 72 percent each; and
- Reduced error rate, 70 percent.
Flexibility Needed to Address Staffing and Changing Demographics
The number of students graduating with accounting degrees is finally on the rise, however, the public accounting profession is still under considerable resource constraints due to high demand for services coupled with the large number of baby boomers retiring or individuals leaving public accounting to pursue other career and life choices. As a result, firms are actively adopting a range of approaches to address staffing challenges, the CCH Accounting Trends Survey found. Today the most often used approaches are:
- Increasing staff management skills, used by 77 percent of firms;
- Using non-CPA administrators to perform task, used by 73 percent of firms; and
- Allowing more flexible full-time work schedules, used by 70 percent of firms.
Anytime, Anywhere Access Becoming a Requirement
As with many knowledge professions, accounting is no longer a 9-to-5 desk job. Firms report that, on average, 22 percent of their professional staff works remotely to some extent and nearly one-half of firms (48 percent) expect to see an increase in the number of professional staff working away from the office over the next three years.
According to CCH Accounting Trends Survey findings, more than half (51 percent) report the most common reason for working remotely is to work at a client's office or in the field; 26 percent say working from home as needed is the most common reason for remote work; and 19 percent say staff are mainly working remotely as part of formal telecommuting programs.
Firms say the biggest benefits of a mobile workforce are to:
- Improve productivity, 66 percent;
- Enhance life/work balance for staff, 60 percent;
- Improve client service, 58 percent;
- Improve ability to attract and retain employees, 52 percent; and
- Increase billable time, 52 percent.
About the CCH Accounting Trends Survey
The CCH Survey was conducted online for CCH by Harris Interactive, from August 26-September 2. The survey reflects experiences of partners from 194 randomly polled accounting firms across the U.S., ranging in size from firms with five to more than 100 employees.