Having an accountant who can adapt to your changing business needs is essential as we head into 2023.
Closing out 2022
We can all agree the past two years have significantly impacted how businesses operate today, with the global pandemic forcing many to pivot to remain functional.
During 2022 businesses have had to contend with many more challenges than just a global
pandemic; the ongoing impacts of the war in Ukraine, rising interest rates on the back of the highest inflation seen in 32 years, and the expectation of a recession.
The Consumer Confidence Index (CCI) measures consumers’ attitudes toward their financial circumstances, the national economy, and making major purchases. In the second quarter of 2022, CCI reached a record low, with economists describing the mood in the country as “grim.”
No wonder we are all feeling fatigued!
We have seen many successful business owners here in the Bay of Plenty and across New Zealand decide enough is enough and have either sold or closed doors for the chance of a different lifestyle. For professional services and many other businesses & industries, this has meant an opportunity for mergers and acquisitions as a means of growth, diversification, or exit strategy. For others, this may have meant not being able to realise the true value of their business.
Staff shortages are still being felt across all industries and are driven by the slowing of population growth and immigration. The accounting industry has also felt the strain from the domestic market with record-low accounting graduates from New Zealand Universities. A recent survey showed that Gen Z viewed Accounting as the second most boring job (we were as surprised as you), so the future for the industry and accessing talent is a challenging one.
But is it all doom and gloom?
What’s on the horizon for 2023
2022 has taught us that times are changing, and as accountants, we need to too.
Business owners’ priorities now often have life fulfilment, freedom of mind and time, and sustainability as being as important or more important than financial gains. Your accountant should know your version of success, be working with you to achieve it, and tailor their approach to get you there.
The industry is in dire need to start looking at clients as customers. Some have adopted this mentality, but others are still very reliant on the mindset that their clients need them more than they need their clients. With consumer confidence expected to remain well below average in 2023, it won’t be long until consumers start questioning whether the price they are paying for accounting services is fair for the value they are receiving.
But value is subjective, so what is fair value?
Does your accountant engage with you about your cashflow? Are they keeping provisional tax payments at a level that reflects your profitability? Is your accountant ensuring you are paying as little tax as legitimately possible? Are they offering solutions to improve your cashflow and profitability? Does your accountant hold you to account? Do you have rapport with your accountant? Is your accountant a visionary?
If your answer to most of these questions is no, then you would hope that you are with a low-cost provider, as the value you are getting is just to comply with filing and tax requirements.
Technology remains a critical part of business development, and those that continue to invest in it will stay ahead. With most SMEs now using cloud accounting software, your accountant should have adopted the same approach. More so, your accountant should be able to review your financial tech stack to ensure you have scalability, saleability, and sustainability.
Change is inevitable. 2023 will undoubtedly bring its own challenges and wonders for us to adapt and then come accustomed to. In the words of Albert Einstein, “Insanity is doing the same thing over and over again but expecting different results.”
So, is your accountant prepared to grow and change with you, or will they continue doing the same thing over and over again?