Professional Documents
Culture Documents
ACTION PLAN
A ROADMAP TO
THE FUTURE
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
WELCOME
TO THE
FAST-
FUTURE
Time is compressed in today’s fast What has driven a firm’s past success
“We will not recognize the paced, complex and changing global will not be what drives future success.
accountancy profession in world. One study, by Accenture, It is critical that leaders dedicate time
predicted that advances in robotics now to consider their firm’s future and
the next 10 years. Actually,
would automate or eliminate 40% embrace new opportunities.
the fact of the matter is of basic accounting roles by 2020.
that it will probably be in It is quite possible that within 10
years bots will have a deep enough
the next 5 years”
knowledge of accounting and auditing
– Barry Melancon, President & standards to be able to answer all
CEO, American Institute of technical questions about them. Is the
CPAs and CEO, Association accountancy profession ready for such a
of International Certified change at such a pace?
Professional Accountants
The IFAC SMP Committee (SMPC)
believes that there is strong need to
raise awareness of what the future
may hold, so practitioners can make
informed decisions about their strategic
plans. Firms often prioritize serving
clients at the expense of planning for
rapid changes impacting the profession.
3
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
4
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
WHAT IS
THE ROAD
MAP TO
THE FUTURE?
There is no single template for what successful small practices will look like in the
future, but four key areas for practice transformation are:
1 Embrace Change
2 Leverage Technology
5
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
1 EMBRACE
CHANGE
6
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
2 LEVERAGE
TECHNOLOGY
Fundamental to all future successful FIVE KEY INITIATIVES TO SUCCESSFULLY ADOPT AND EMBED
firms will be embracing technology TECHNOLOGY INCLUDE:
developments to improve practice
efficiencies, enhance how clients are A. Conduct an Environmental Scan
serviced, and expand the range of
The first step is to look outwards—not how the firm’s processes can be more
services provided. Practitioners should
inwards. Consider what is happening efficient. It may involve attending
look at the rise of AI, for example, not
in the world and how it will affect vendor events to learn about what new
in terms of potential job loss, but the
the practice. There’s a wide range of technology is available and considering
elimination or evolution of tasks; this
issues to consider when positioning how the firm can collaborate with
approach will lead them to focus on
the firm for the future, and technology external IT specialists.
the opportunities new technologies
underpins many of these. Think about
bring. Professional judgment will
how technology can help improve
remain essential to advising clients
efficiencies, productivity and quality,
and adding value.
lower costs, attract staff and maintain
and add new clients - what can be
automated?
7
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
Firms should identify which technology to determine which one is best and
is best aligned with their strategy (e.g., will be a long-term solution. Sharing
growth targets and service offerings) experiences with other similar firms can
and consider the relevant business be mutually beneficial.
need, available budget and marketplace
Issues to consider when choosing
opportunities. The firm may seek to
a supplier include the quality of its
harness technology developments to
executives, its track record, profitability,
improve efficiency, client service or
its investment in research and
profitability. This could include remote
development, and its engagement with
access, document management and
its customers. A practice’s technology
scanning, using multi-screens, website
supplier should be considered a
improvements and using software
long-term relationship investment. A
packages for timesheets, billing and
bite-sized plan should be developed
monitoring recovery rates.
so the firm can effectively manage the
It is important there is a strong business process. There are various options
case for adopting any new technology. to manage the investment, including C. Adopt the Cloud
The return on investment (ROI) should exploring a subscription based or
be calculated, but the risk of not monthly-renewal model to manage the Cloud technology has become a
investing in new technology (RONI) costs and considering passing the cost key part of the accounting industry.
should also be considered. Given the on to clients. Practitioners can now serve clients from
multitude of products it can be difficult anywhere (including other countries).
8
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
Practices 5
Mo
champion’ may be a ‘rising star’ who 4th Edition
9
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
3 TALENT
MANAGEMENT
Staff are the most valuable asset of any economy. In the period up to 2022, firms—each with different skills and
firm. Investment in talent management the World Economic Forum predicts personalities. Successful firms will
should be a top priority. that employees will need 101 days of recognize the demographic trends
retraining and upskilling. in the work force, including ageing
Technology developments are having an
leadership and the rise of millennials
impact on how firms both recruit and While technical competence remains
and Gen Z, and take advantage of the
retain talent. There is a new diversity critical, other skills, such as empathy
differences between generations.
in who firms hire: for example, some and the ability to communicate
are now recruiting data scientists effectively and collaborate both
and broadening their reach beyond with colleagues and clients are
traditional academic subjects. Practices becoming increasingly important to
need to think about how they re-tool future performance. Staff interaction
their staff and train accountants for the with clients, including face-to-face Insight Report
future through the development of new meetings, are critical to success. There The Future of
skills and competencies for the digital are now four generations working in Jobs Report
2018
10
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
11
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
IFAC GLOBAL SMP SURVEY: 2018 SUMMARY Today all firms are expected to be active
on social media. Not having a presence
is a significant missed opportunity.
Small practices should choose the most
TECHNOLOGY
appropriate channel (e.g., LinkedIn,
TALENT Facebook and Twitter) and promote
their talent management initiatives.
ADVISORY SERVICES A clear overall social media strategy is
important. The content needs to be
current and accurate. Social media
presents a risk for firm’s reputation,
which needs to be managed: the
firm must decide what type of
content is appropriate and develop
1 clear guidelines for how to handle
comments.
12
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
4
EVOLVE THE FIRM
OPERATING MODEL
AND BUILD ADVISORY
SERVICES
The majority of SMPs’ revenue is advisers they are still able to listen and
generated by traditional services, identify client needs and, if necessary, “Practitioners can be valued
including compliance, audit and facilitate access to other professionals business partners for their
taxation, but there has been an increase to find solutions.
expertise and insights
and diversification in the provision
of business advisory services—in
FIVE INITIATIVES TO ADAPT from translating data
some jurisdictions more than others.
THE FIRM MODEL AND BUILD into valuable information
SMPs have in-depth knowledge and
ADVISORY SERVICES ARE:
to support their clients
understanding of their SME clients and A. Move from Transactional decision-making.”
are therefore well-positioned to provide to Strategic Services
a range of services. – Monica Foerster, IFAC SMP
Firms need to be more proactive than Committee Chair
The traditional firm pyramid model is reactive and shift from hindsight to
likely to change as outsourcing and foresight using data-driven insights.
automation create efficiencies. This Higher value work will be future- Technology tools enable an opportunity
may result in a firm hiring and retaining focused based on analysis and to provide information to clients in
fewer junior staff, but also a rise in interpretation, not lower-value tasks, real-time. For instance, visual dashboard
digitally-proficient mid-level staff. The such as inputting data, verification reports can be easily and quickly
result would be a flatter, more project- and conventional reporting. As more generated for monthly discussions
based structure. The physical location repetitive tasks are automated (e.g., tax with clients on current figures. These
of firms may also change as a rise in returns are electronic in some countries discussions can help clients anticipate
remote/virtual working results in less and software can now automatically financial difficulties and understand
need for physical office space. code invoices and receipts), how to take appropriate actions and
opportunities will open for the firm to decisions. Firms need to do more with
Small practices (e.g. sole practitioners)
analyze data to offer strategic value- data to remain relevant.
may not know the answer to every
added advice to clients.
question or issue, but as trusted
13
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
14
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
D. Use Networks,
SMPs are specializing Associations and Alliances
in providing integrated to Add Value
thinking and reporting
advice to enhance the way Networks, associations and alliances
organizations think, plan play an important role in providing
and report their business’ and facilitating relevant services to
story. It can help businesses clients. There are benefits of joining
think holistically about their networks, associations or alliances
strategy and plans, make such as access to new clients, a
informed decisions and broader client experience, international
manage the organization’s collaboration opportunities, training
performance. and development, tools and resources
as well as branding and marketing.
The IFAC and the International
There is significant value in building
Integrated Reporting Council
strong referral networks with other
publication ‘Creating Value to head in the right strategic direction.
firms and advisers (e.g., lawyers,
for SMEs through Integrated Given the current pace of change, it is
consultants and IT firms). Because of
Thinking’ helps organizations important for firms that want to evolve
the level of trust between professional
adopt integrated reporting to undertake this review today.
accountants and their clients,
and realize its benefits.
accountants are in an ideal position The review can cover all areas of the
to direct businesses to other reliable firm. Consideration can be given to
sources of advice. It is important to whether the firm needs to reorganize
IFAC GLOBAL
CREATING SMP
VALUE FORSURVEY:
SMEs have a set of criteria and procedures personnel and adapt the organization
THROUGH
2015 INTEGRATED THINKING
RESULTS
when subcontracting work to other structure to deliver services. For
THE BENEFITS OF INTEGRATED REPORTING <IR>
providers to ensure that this work example, combining the practice with
results in high-quality service. It should another, either through a formal merger
be included as part of the firm’s risk or informally through a referral process
management strategies. and ‘business partnering’ can provide
an immediately available resource for
Forming a knowledge network
existing clients and a new revenue
enables staff at all levels to use peers
stream.
to help solve challenges and gain
access to expert advice. With virtual The review might explore new
networks there is potential to network approaches to pricing: for example,
with anyone at any time, without instead of billing an hourly rate, the
geographical limitations. firm could set prices for business
advisory services on perceived or
E. Conduct a Regular
estimated value to the client. It may
Strategic Review
also include an enhanced focus on
It is important for leaders in the firm promoting the practice to existing and
to schedule time to periodically review new clients. The SMP of the future will
the firm’s strategy, structure, services, have a strong brand and its clients will
culture and operating model. Setting be fully aware of the range of services it
aside time regularly to dedicate to can provide with clear communication
thinking about the future should be a through its website, quarterly
priority. Only a realistic review of the newsletters, social media and presence
firm as it is today will enable leaders at events.
15
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
WELCOME
TO THE
FAST-FUTURE
The future offers the RECOGNIZING FIRM DIVERSITY
accountancy profession and
SMPs significant opportunities It is recognized that every firm will be different, and the level of
to grow and adapt to serve a action to “transform” will depend on a range of factors, including
rapidly changing world. Practice the lifecycle of the practice, partners’ motivation, the size and services
transformation will succeed with provided, the firm’s location and the type and number of clients
a focus on embracing change, served. The actions taken by each firm will need to be tailored to its
leveraging technology, new individual circumstances and objectives.
approaches to developing and
training people and a renewed
emphasis on providing relevant PRACTICE MANAGEMENT RESOURCES
and value-added services to the
marketplace. The IFAC Guide to Practice
Management for Small- and
Medium-Sized Practices is a The International Federation of Accountants
16
PRACTICE TRANSFORMATION ACTION PLAN — A ROADMAP TO THE FUTURE
IFAC does not accept responsibility for loss caused to any person
who acts or refrains from acting in reliance on the material in
this publication, whether such loss is caused by negligence or
otherwise.
ISBN: 978-1-60815-440-1
IFAC SMP Community
@IFAC_SMP