Equipped with the right tools and skills, the accounting community can be among the most valuable advisors and the key to restarting the South African economy.
South Africa’s small businesses face an unprecedented range of challenges, and as a result of the COVID-19 crisis, three out of four SMMEs are not expected to survive, according to new Heavy Chef research. This is a bleak outlook, but with the right support and advice, this prognosis can be changed. Now more than ever, accountants have a vital role to play in supporting small businesses.
Today’s accountants can cut repetitive manual processes and improve efficiencies by using cloud technology and automation. Our recent research found that 87% of accounting firms use some cloud technology – so that they can dedicate their time to adding real value to businesses by advising them. This crisis has made the benefits of technology clear and firms which use the cloud have had significant advantages.
However, Xero research found that two-thirds of accounting firms struggle to hire talent with the right skills to use new technologies. Future accountants will need to be equipped with all the right skills and tools, but how can we prepare them for an unpredictable future?
Training future accountants
In our State of Accounting Research, 35% of respondents reported that their firm already seeks candidates with cloud skills. Compare that to the 14% of recruiters that reported a skills gap in technical expertise, and it becomes clear that cloud accounting is a skill that is in high demand.
To ensure there is a strong pipeline of accountants coming into the industry with the right skills to support our economy, education providers need to be incorporating new technology into syllabuses.
Fortunately, universities are already stepping up to close this skills gap. We recently announced our partnership with the University of Johannesburg, and we are excited for the university to become the first higher education institution in the country to offer Xero Learn. The software lets budding accountants get to grips with the latest in cloud technology and teachers can tailor it to illustrate a variety of real-world scenarios.
This is a great step in the right direction, but we need to see more academic institutions future-proofing their accounting courses in this way.
Preparing today’s accountants
We have already seen a tectonic shift in the way accountants support their clients, moving from working exclusively with the numbers to offering insights and business counsel – and the COVID-19 crisis has only accelerated this. In the future, 54% of firms expect to handle both finances and business advice, while 38% expect to be single-mindedly focused on telling clients exactly what they can do to make their business grow. Just 8% of accountants expect to remain solely focused on the numbers.
It is great to see this positive shift happen, with accountants transitioning into essential advisors. But to do this they need the right skillset and a community of partners to help them meet their clients’ needs.
More and more we are seeing accountants leaning on partners to help them become even more efficient and offer a wider range of support to their small business clients. For example, working with alternative lenders to help with access to capital, using smart apps to give real-time insights into cash flow and using bank feeds to automate financial data capture.
Prepare for the transition
Business’ expectations of their accountants are undergoing a radical shift, as they move beyond merely handling finances and mould into business consultants and advisors. In fact, 37% of small business respondents expect their accountants to handle their finances in addition to providing some advice on ways that they can improve their business, while 28% expect their accountants to act as a business consultant. This is an increase from last year when 29% of the businesses we surveyed wanted to use accountants to handle finances and consultancy and only 11% wanted to use them exclusively for consultancy.
At a time when it is unclear what the future holds, reliable advice is vital to keeping businesses nimble and adapting to changing circumstances. Far beyond ensuring compliance and crunching numbers, today’s – and tomorrow’s – accountants need to stay ahead of the technology curve and adopt the latest tools to successfully guide business leaders.
AUTHOR | Colin Timmis, Country Manager at Xero South Africa and professional accountant