Accountancy Predictions: what should accountants expect in 2023

17 Jan 2023

Published in: Member News

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John Edwards, chief executive of the Institute of Financial Accountants (IFA), reveals his accountancy key trends and predictions for 2023.

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John Edwards, chief executive of the Institute of Financial Accountants (IFA), reveals his accountancy key trends and predictions for 2023.

"When I was making my accountancy predictions for 2022, I certainly didn’t foresee the shocking invasion of Ukraine and the heart-breaking impact on the people that live there, at the same time leaving the global economy reeling from market shocks, diminished food security, and spiralling energy prices", John Edwards revealed.

It was certainly a year of the unexpected. However, the accountancy sector continued to operate largely as expected. Looking ahead to 2023, while some trends endure there are some new ones that top my list of predictions.

Supply chain security

Supply chain security will dominate 2023 and beyond, creating a need for agile financial leadership amid diversification.

During the pandemic, supply chain slowdown was met with a sense of resignation. While businesses did not enjoy delays in delivery there was a very real sense of tolerance from businesses and customers alike.

Accountants have a unique opportunity to support with supply chain diversification. Amid the multifaceted challenge of managing costs, consistency, and quality against the instability of supply, many businesses lack the resource and know-how to make quality change. Accountants can provide insight into the risk and reward of moving supplier by providing a quantified business case.

International appeal and talent innovation

As work-life balance, mental health, the cost-of-living crisis, inflation, and staff shortages intersect, it is no surprise that the sector is facing a severe skills shortage. This will trigger a mass focus on ‘offshoring’, where accountants turn to an international labour pool for additional resource.

The shortage of talent will drive further innovation and there will be renewed focus on training, and upskilling with emphasis on new equality, diversion and inclusion (EDI) skills such as critical thinking, interpersonal communication and leadership skills. This together with specialisation will help maintain and secure the client base.

All things digital and tech

Digitalisation and the adoption of technology was a key prediction which manifested throughout 2022 due to unprecedented levels of cloud accounting and the continued roll out of some of the Making Tax Digital updates.

This is in spite of a delay in the rollout of Making Tax Digital for Income Tax Self-Assessment until 2026. Digitalisation will endure as a trend for the coming year, as recession puts efficiency into sharp focus, and technology offers both the insight and the solution to streamlining. We are in the digital finance age and the appetite for tech will continue to accelerate.

New and emergent technologies will begin to gather momentum and while only the most progressive organisations will begin using the metaverse this year, other technologies will begin to reach maturity.

Accountants need to identify how they can upskill at a pace that enables them to take advantage of these efficiency gains.

Energy crisis will drive sustainable improvement

While it is no doubt a significant concern for businesses, the energy crisis will probably have a positive conclusion in the next two to three years. Microgeneration on a local scale has always been a potential sustainability gain, but installation cost and the availability of cheap energy has somewhat supressed demand.

"Sustainability and environmental concern was high on my list of predictions for 2022, and I anticipate that it will remain high for many years to come. Net zero is now an almost mandatory target, and as I have regularly highlighted, presents an opportunity for accountants to capitalise on their established reporting and data analysis skillset", explains John supporting his 2023 accountancy predictions.

Value-based pricing

Value-based pricing has the advantage of connecting cost to outcome which provides clients with a level of reassurance that will become increasingly important.

It may be that instead of linking pricing to value, the focus is about communicating and offering advisory services to deliver additional value.

According to a study by the Hinge Research Institute, there is a gulf between what services clients buy and the ones that they value, as well as the effectiveness with which accountants communicate their services.