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The industry should lean into the move from transactional work to being more client-facing-focused as it needs to make itself “sexy again”, says accounting firm CEO.
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Accounting industry’s ‘time to shine’ amid softening economy
15 June 2023
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11 minute read
It is the accounting industry’s time to shine amid the tougher economic conditions with accountants needing to get back to basics and help their clients focus on what can make their business successful, says Sarah Lawrance, founder and CEO of accounting firm Hot Toast.
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“We’ve seen changing economic times and there’s some hard decisions that are having to be made, we’re seeing clients that have never been in this situation before,” said Ms Lawrance.
“That’s our moment to step in and shine, and have those healthy conversations, after all the work we’ve done over the COVID period, we’ve solidified those relationships."
“It’s being that trusted adviser, stepping in there and having those robust conversations, that’s why I’ve come into this industry, to have an impact, to help clients get where they need to get to and help them succeed not just in the good times but also when we see challenging and changing conditions.”
She said for accountants to properly help their clients they need to have an ongoing line of communication, not just a yearly conversation when 30 June starts looming on the horizon, as continual engagement was required to fully understand a client’s business and its purpose.
Ms Lawrance said it meant accountants would have to be prepared to have tough conversations with their clients and force them to re-evaluate their business and make the tough decisions to ensure profitability and financial security.
“It’s asking the right questions, having those hard conversations with clients and I think being able to push back on clients,” she said.
“Risk mitigation should be within your list or your menu of services as an accountant, and a big part of that is around economic unit profitability and cash flow.”
“Not just looking at it in a linear way where it’s just we’re going to look at cash flow but let’s also make sure that we’re profitable, let’s get back to basics, and what that looks like, the heydays of the crazy 2020 valuations are gone.”
She said while it was tough economically, now was a great time for advisers and accountants to flex their muscles and show the value they could provide and support their clients as people turn to the industry for help.
Ms Lawrance said the industry needed to focus on rebranding itself, to make it "sexy again" with tertiary education course numbers and registration for professional bodies waning.
“The numbers applying to the associations at the moment, it just isn't there and when we look down the track of the next 10 to 15 years we’ve got a real problem,” she said. “So how do we entice the next generation? Technology, data, critical mindset, and having them along in those conversations and us moving the needle for our clients.”
“I do think transactional work is going to go and that’s okay, for the most part as an industry do we actually want to be doing that stuff? I’d say no and it's not a good selling point for the next generation either.”
“What that means as an industry, what I hope it means, is that we can attract people to this industry in a more client-facing way. Instead of them having to do the work for the first five years and get stuck doing audits and tax returns and all that jazz they can be more client-facing focused”.
Ms Lawrance said for accountants to have more time on the client-facing side of the business they need to ensure they are exploiting efficiencies through the use of technology and helping their clients understand it as well, referencing a potential client who showed her a 20-tab Excel sheet.
Instead of inputting the data multiple times, she said she was able to set her up in a Xero report within “five to ten minutes”.
“When you’re looking at driving efficiency in your firm maybe touch base with the current features that are sitting in Xero and how you can maximise that and then how you can start layering your applications off the back of that as well,” said Ms Lawrance.
“When I talk about that focus on the economic unit and what that profitability looks like, having that level of detail within the data with Xero, being able to sort by tracking categories and profitabilities, that’s low-hanging fruit.”
“Being able to set those up in really customised ways across different jobs and service lines, for me that’s where I use a lot of the reporting functionality.”
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