The ancient profession of bookkeeping is undergoing a quiet revolution. Many of the changes are coming from within the accounting industry, while others connect with a wider set of socioeconomics. Either way, change is quickly approaching us.
If you work in the accounting industry, employ a bookkeeper or plan to, our trends analysis will give you the information you need to understand the wider landscape, hold onto your talent in times of upheaval, and make informed decisions when hiring.
Bookkeepers are in great demand
The number of employed accounting clerks and bookkeepers in Australia is projected to decrease from 265,800 in 2022 to 262,700 by 2026. While this translates to around 3,100 fewer available positions in this period, there are three factors that will likely drive the demand for bookkeepers in 2023 and beyond:
- Small businesses will keep using the services of bookkeepers, even as large companies use software more often to automate many of their financial and accounting functions. The expense of sophisticated software programs will be out of the reach of most small businesses for the foreseeable future.
- While there may be fewer jobs available, the demand for advanced financial analysis, advisory and software skills, will likely drive up median salaries, a lesser cost to that of many sophisticated software programs, and see bookkeepers moving into wider roles. This will go some way to negating the 3,100 bookkeeping jobs that will be shed in the next three years. An additional factor is tightening accounting regulation which will increase the focus on corporate bookkeeping and transparency.
- Baby Boomers (born between 1946 and 1964) who make up about 33% of the global talent pool, have already retired or plan to in the next 10 years. In fact, the Australian workforce is bracing itself for a skills and knowledge crisis as the Australian Bureau of Statistics projects the number of retiring Baby Boomers to reach 673,000 from 2021 to 2026.. The average bookkeeper in Australia is 48 years of age which means filling positions left by retiring Baby Boomers will present a challenge for businesses until at least 2030 when numbers begin to dip to around 105,000 retirements annually.
Evolution of the traditional bookkeeping role
As expected, there is an increasing demand for bookkeepers who have certified qualifications and are registered with Association of Accounting Technicians or the Australian Bookkeepers Association. Already there is a demand for certified and experienced bookkeepers, and it will get increasingly difficult for those without these credentials to find work.
One of the main reasons for the focus on industry qualifications is that bookkeeper skills can be transferred to other positions, or a wider remit, like financial, analyst or office manager roles. In addition, many bookkeepers run their own firms and typically use a much wider skills set.
Another important reason why the traditional bookkeeping role must evolve is the need to attract a younger generation to the profession. Millennials aged 27 to 42 place a great emphasis on job fulfillment, opportunities for career advancement, higher pay, and a work-life balance, which is likely to see the role change significantly in the decade ahead.
The widening skills gap
According to the World Economic Forum, three-quarters of employers looking to fill positions in 2022 were unable to find the talent they needed – up 6% since last year. In 2012, the figure was 34% which means the skills shortage has doubled to 75% in the last decade.
Add to this the median age of bookkeepers in Australia: 48 years of age, and the fact that the largest portion, 28% of bookkeepers, are between 45 and 54 years of age, according to the Australian Government’s Labour Market Insights report. One of the most important items on any firm owner’s agenda will need to be advanced planning around attracting new talent to their business or reskilling existing talent to move into the bookkeeping role in the future.
The retention crisis deepens
While recruiting the right people to your business remains a challenge, retaining top talent is even more so. Interesting statistics to consider when talking about retraining top bookkeeping talent are:
There are many things firm owners can do to keep their bookkeepers from leaving, including:
- Altering your company policies and benefits to address the specific challenges faced by female employees.
- Introducing a mentorship program to overcome the roadblocks many women face in the industry.
- Closing the gender wage gap in the ANZ accounting industry – women in full-time employment, Chartered Accountants ANZ reported, typically earn 17.5% less than men.
- Rethinking capacity-building programs that allow hard-working mums to advance in their careers.
Bookkeepers who keep adapting and learning have a positive future ahead of them. They’re likely to be able to spend more time adding value to their employers and, with the right training, can contribute expert financial advice.
The ambitious bookkeeper should focus on growing their skills alongside the cloud and be encouraged to develop a deep understanding of your business and the industry. This way they will be able to find their niche and provide specialist skills to your business as the industry changes.
A Sage survey has shown that 62% of accounting professionals agree that today’s accountancy training program will not be enough to run a successful practice by 2030. This is supported by a McKinsey report suggesting that 61% of respondents believe capability-building programs only sometimes or rarely succeed in achieving “desired objectives and business impact”.
When taking into account the skills shortage and retention crises, there’s no time to waste putting time and resources into building capacity within your firm.
Growing global teams
TOA Global has in recent years seen significant growth in the use of global bookkeeping talent with more firms tapping into the benefits of global team members.
- Taking the stress out of finding qualified, high-performing bookkeepers.
- Retaining this talent to the benefit of your firm by providing world-class office facilities and benefits that come from working for a leading talent solutions provider in the accounting industry.
- Advanced privacy and enterprise-level security.
- Continuous learning delivered by the Ab2 Institute of Accounting.
- Fully supported onboarding processes, and regional oversight.
- Resilient connectivity to clients during their business hours.
Keeping up with regulatory change
The Accounting Today 2022 Year Ahead Survey shows that 51% of firms list their biggest challenge as keeping up with regulatory change. As legislative changes show no sign of slowing, remaining compliant will continue to be an issue for many firms.
Wolters Kluwer has turned up an interesting statistic showing that 36% of small firms and 45% of large firms said their 2022 tax season was somewhat or much better than last year. This indicates that firms are finding ways to keep up with the changing regulatory landscape by automating time-consuming tasks, freeing them up to spend more time on compliance, and incentivising continuous learning as part of their firm’s culture.
Growth of bookkeeping software and a focus on cyber security
Bucking the trend of reduced spending in the US on accounting software and ICT through 2022, New Zealand was forecast to spend NZ$14.7 billion – growth of 6.7% – while Australia is expected to show its strongest growth in a decade in 2023 of 6.5%. This is projected, according to Gartner’s IT spending forecast, to increase overall market spend to AU$109.1 billion, up from $96.8 billion in 2020.
Interestingly, while in a 2022-23 Tax Season Challenges Survey, 66% of small firms and 44% of large firms said that technology helped them reduce the number of hours they spent on client/tax returns, less than 1% indicated they were using their current tech stack to its fullest potential.
Advances in accounting software are largely responsible for the evolving bookkeeper’s role, which has reduced time spent on routine tasks, allowing for a greater focus on strategic, value-adding tasks. New technologies on the horizon like automation, machine learning and ERP (Enterprise Resource Planning) integration will continue to change accounting ecosystems in the year ahead and bookkeepers will need to be ready to leverage the technology at their disposal.
The other driver of technology in this space will be the demand by bookkeepers for remote work or advanced virtual connections with their clients. According to Wolters Kluwer, some 43% of firms are either planning to, or in the process of, downgrading their brick-and-mortar businesses or moving to a virtual-only presence.
With the emphasis on technology and a growing Internet of Things, companies will have to be prepared to possibly increase their spend on advanced cyber security measures as damages caused by attacks are expected to exceed $6 trillion in 2022.
Now’s the time to future-proof your bookkeeping function
TOA Global has helped more than 1,000 international clients scale efficiently in every business cycle. Contact us to talk about how elite global bookkeepers can save you time, increase your billable hours, and eliminate the stress of retaining and growing your team.
We find experienced bookkeepers and provide them with more than 200 hours of training in Australian accounting practices, plus Xero.
Find out more about the TOA Global Accelerator Program for Bookkeepers here.