The long-range forecast: What does 2022 have in store for the accounting sector?
2021 was a rollercoaster of a year. We started in lockdown and held our breath (literally) for the long-awaited Freedom Day that never quite materialised. And we ended with Omicron casting a shadow over our Christmas and New Year celebrations. The uncertainty and disruption caused by COVID impacted us all and touched every sector of the economy. But, as we reach the end of January and bed down into 2022, Hugh Scantlebury, CEO and Founder of Aqilla, asks what accounting and finance professionals can expect from the year ahead.
Cloudy with a chance of sunshine
Last year, cloud technology saved many accounting and finance businesses — enabling employees to work from home in unprecedented numbers. According to GrowCFO’s 2021 Survey, which gathered opinions of UK accounting and finance professionals, 93% of respondents said they were able to switch seamlessly to remote working when the first lockdowns came into force.
The same survey found that 70% of accounting and finance professionals now use cloud-based software — and that over a quarter have on-premises solutions that allow remote access. Although this was common in many sectors of the UK economy, it’s perhaps notable in this sector, as it’s often been accused of taking a relatively conservative approach to new technology adoption.
Founder & CEO, Aqilla
High pressure from Economic Long COVID
With restrictions lifted significantly on 26th January, it’s tempting to think we’re finally entering a post-COVID world. But that term should sound alarm bells for us all. A post-COVID world — a bit like a post-modern world — for all its apparent push for a new and positive future, continues to keep one foot in the past rather than wholly embracing a future free from the old restraints. It also begs the question; when (and how) will we finally move on from COVID?
So, even with a shift from pandemic to endemic, I’d say that in 2022, the accounting and finance industries, along with the rest of the economy, will continue to suffer with what I’ve come to call Economic Long COVID. It’s a combination of staff shortages and supply chain disruption — basically, the issue of people and assets not being in the right place at the right time. This results in businesses and individuals suffering inconvenience, disruption, shortages, and price fluctuations.
Check the Boardroom barometer
It’s been on the cards for a while, but this year we’re going to see an even more significant demand on accounting and finance teams to provide actionable intelligence and long-term planning that goes beyond end-of-month reporting.
This is backed up by GrowCFO’s data, which reveals 89% of financial and accounting staff face increased demand from management for more analysis of their figures. Of those people, 29% said they had sufficient flexibility to meet those requirements right now. However, 62% said they would need time to adjust and 9% said they couldn’t fulfil the request at the present time.
With accountants’ time taken up by more analysis, many more daily tasks will have to be automated. Indeed, according to an ACCA report, 55% of C-level executives in finance and accountancy expect the development of automated accounting systems to have the most significant impact on the sector over the next three to ten years.
The great resignation: A storm on the horizon or a storm in a teacup
Embracing automation in the industry will also help manage the ongoing skills gap. Turning once more to GrowCFO’s survey, 83% of finance and accounting professionals said they did not currently have the skills they needed in their team. Of those, 17% said they would be looking to hire externally, 40% said they’d look to train up existing staff, and 43% said they’d rely on a mix of internal training and external hires.
Much has been written about The Great Resignation. Of course, it is important for finance and accounting personnel in management roles to prioritise training and development of existing staff and help them feel supported. However, beyond the initial hype during the first half of 2021, I’m not convinced it’s such a widespread and ongoing phenomenon — especially within finance and accounting teams.
The sunny side of the street: Reasons to be cheerful…
I’m an optimist by nature, and I genuinely believe there are definite reasons to be cheerful about 2022. Times of trouble, doubt, and catastrophe, often inspire innovation, entrepreneurship, and creativity. And in that context, the UK’s leadership in COVID vaccine development and the accompanying vaccination programme is something that we can be very proud of — and draw encouragement from for the year ahead.