A recent study by Penfold and Kaizen Accountancy Services shows that team integration, automation and client education remain major challenges for accountants and firms today.
While the demand for professional accounting services has risen dramatically due to increasingly complicated market conditions and economic uncertainty, the UK accountancy space is still struggling with generating sustainable growth, with a shortage of talent and skills being a key roadblock.
A study by digital pension platform Penfold and Kaizen Accountancy Services has revealed that team integration, automation and client education are the top three challenges accountants face today. As the talent crisis continues to sweep the nation, the industry has been slow to incorporate technology and innovation, not only into firms but also into educational courses, hindering the field’s ability to attract the next generation of accountants.
Finance Team Integration
Kaizen reported that an organisation’s financial stability, regulatory compliance and overall success were negatively impacted by neglecting to include finance teams in business growth decisions. The study found firms that included accountants and finance teams from the get-go were better equipped for growth periods, resulting in less strain on their teams. However, educating clients and business leaders on the advantages of involving finance teams remains a recurring challenge.
Trade Association UK Finance supports these findings. Commenting on the trend of rapidly developing businesses, they highlighted the critical role finance teams have in generating information to support decision-making.
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By GlobalDataPenfold co-founder, Chris Eastwood, said: “Business leaders can be hesitant to tackle finer finance details, whether it be payroll software or switching pension providers, so it’s best to share clear and concise information to build their understanding of a service. Whilst switching pensions can feel taboo to some start-up businesses, the visibility of the Penfold service is educational. Our onboarding process has also been found to be pivotal in deepening client understanding of the service, benefits to the finance team resource management and therefore the wider business.”
Automation solutions
Managing benefits, deductions, and employee queries can be overwhelming – especially for start-ups with small teams. On top of this, the research revealed that, business leaders are hesitant to spend money on automating processes and still use manual information formats – leaving payroll calculations open to human error.
Meanwhile, a survey from The Chartered Institute of Payroll Professionals (CIPP) showed that 65% of payroll teams would like to automate more processes. CIPP explains that technology advancements can reduce human errors and repetitive tasks, leaving payroll managers with more time to deliver strategic payroll insights.
Eastwood added: “Tech has moved on from Excel spreadsheets. Instead of squinting at cells, software solutions such as our workplace platform presents data in a more user-friendly way. Simple drag-and-drop file processing automates the cumbersome task of reformatting and data input, helping finance teams with efficiency, accuracy and compliance when it comes to pensions”.
For SME business owners, timely and up-to-date information is now more important than ever. However, to meet these increased expectations, efficient technology needs to be implemented to automate repetitive processes.
Meanwhile, the sluggish implementation of said technologies has the knock-on effect of struggling to attract students into the industry. Statistics from the Financial Reporting Council (FRC) show a 5.2% decline in the number of students joining established financial industry bodies over the last five years. And with a shortage of qualified professionals, recruiting and retaining skilled accountants will be a constant struggle.
Client Education on Employee Engagement
The third challenge highlighted by the study was educating clients on employee engagement and well-being. While corporate benefits are a dime in a dozen, the study found that pensions are one of the biggest factors in employee happiness. Furthermore, pension contributions as an aspect of payroll is not seen as a ‘pretty’ topic, so often gets neglected for more pressing issues.
Kaizen director, Zak Round, further said: “Pensions are very taboo at times, especially to start-up businesses, and decision-makers can be very hesitant to switch providers. Owners and directors are fully immersed in their business and driving it forward, so having to put time aside for a conversation with an accountant on the finer details of the business sometimes comes second to the general day-to-day running of the business”.
A 2022 benchmarking report on pension engagement by Penfold found that 58% of employees don’t know the current value of their pension pot. Meanwhile, companies such as Cuvva have seen an increase in engagement after switching to Penfold, with 88% of employees now logging into the app to view their pension status.
According to Round, there is a bigger shift in attitudes to pensions amongst clients nowadays. Employees themselves are becoming more engaged with pensions and what providers can offer – specifically full transparency of their pension pots and consultation on how they can invest wisely.
Round added: “It is very educational as well as informational for our clients and their employees, especially with the national retirement age going up. I still think there is a big educational piece to do, but things are moving in the right direction”.
Commenting on the future of the industry, Eastwood adds: “Changing the image of an industry doesn’t happen at the drop of a hat; the sooner you can show the benefit of automation the better. We know being able to show value to your clients is key. And if you can suggest ways for clients to save money with an alternative pension provider, you’ll be taking steps toward cementing those relationships.”
As the UK accounting industry continues to evolve, innovation and adaptation will be the cornerstones of success, ensuring that accountants can meet the challenges of today and shape a promising future for the profession.
