Confidence among accounting firms is the highest it has been in seven years, according to CommBank’s latest Accounting Market Pulse report.
The industry report, which has been running since 2015, shows net 80 per cent of firms surveyed have a positive view of current business conditions, and an even higher percentage are optimistic about the next 12 months and 24 months respectively (93 per cent and 90 per cent).
While most firms expect robust conditions to continue for at least another two years, the research reveals digital leaders are set to pull ahead of their peers.
Commonwealth Bank Executive Manager of Professional Services, Julienne Price, said: “Accountants cemented their status as an invaluable partner to businesses during the pandemic, guiding them through a rapidly changing compliance and commercial operating environment.
“As broader economic conditions have improved and many businesses are pursuing new growth opportunities, demand for accounting firms has reached new levels. There’s a broad-based boom underway, but some firms are better placed than others to capitalise.”
The report examines the impact of digital transformation and accelerated technology adoption of accounting firms throughout the pandemic.
It found some firms are more advanced in their digital transformation, with one in three firms identified as leaders based on five core criteria: ease of working remotely; ease of delivering services digitally; having above average digital skills; positive ROI on technology; and adopting new technologies.
These firms have higher mean profit forecasts (5.5 per cent) compared to followers (4.7 per cent), and are also more likely to expect client demand in areas of emerging growth such as IT and digital transformation, data and analytics, and environmental social and governance consulting. Digital leaders are also more likely to be investing in cloud-based technology and social media for inbound and content marketing.
“Digital leaders are more confident in future business conditions and financial performance, putting them in a great position to reinvest in technology and further embed their leadership. They are more focused on the client experience, driving efficiencies and using their culture as a competitive advantage,” Ms Price said.
While the outlook remains positive overall, the elevated demand for accounting services has escalated the battle to attract and retain talent. This is a major challenge that has intensified over the past 12 months. A net 93 per cent of firms say finding quality staff is challenging, while 62 per cent report challenges in keeping quality staff.
About the CommBank Accounting Market Pulse
The CommBank Accounting Market Pulse is a wide-ranging analysis of Australia’s Accounting Sector running since 2015. The annual report is based on a quantitative survey of CEOs, Managing Partners and other senior leaders from 45 accounting firms, conducted in February and March 2022 by Beaton Research + Consulting.
The research segments firms by digital leaders and digital followers based on five criteria used in the report. References to digital leaders relate to the 15 firms that met all five criteria and 30 digital followers that did not. The five criteria are: remote-/mixed working is manageable or easy; digital service delivery is manageable or easy; overall digital skills of staff are average or above; ROI on technology investment is moderate, high or very high; and, investing in adopting new technologies over the next three years.
