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It’s been a tumultuous year in the accounting world. Over the course of 2017, we’ve seen Big Four firms slapped with multi-million pound penalties based on their “seriously poor” audit work, as well as some significant shakeups in the reporting framework with revamps to key IFRS standards. Meanwhile, financial service automation has sustained space, with machine learning and cloud based software bringing new efficiency to many basic accounting functions, much to the chagrin of old-school bookkeepers. 

Throughout these upheavals, the looming specter of Brexit has continued to create significant uncertainty within the financial services sector, as accounting professionals question the economic and regulatory ramifications of 2016’s EU referendum.

With that in mind, let’s see what the industry has to look forward to in 2018.

Taxation Goes Digital

Last year the government published new guidelines requiring all SMEs to file their quarterly tax returns online, in a bid to move to a completely paperless revenue collection system by 2020.  With regulations coming into effect in April 2018, small businesses will no longer be able to treat tax preparation as an year end matter. Instead, records and reports will have to be uploaded and maintained on a quarterly basis using HMRC compatible software.

Cloud-based accounting software like Xero and Quickbooks will become a necessity for small businesses looking to stay compliant. By automating invoice scanning, transaction analysis, and financial updating, businesses should be able to simplify complicated reporting processes and reduce the potential for tax errors. Accounting firms will need to adjust their services accordingly to offer cloud-based accounting and training for clients’ in-house teams.

Data Security Becoming an Increasing Concern

The EU’s General Data Protection Regulations (GDPR) will come into effect from May 2018. This landmark policy is applicable to all EU countries as well as any organizations dealing with EU based customers. The GDPR has been developed on several key principles mostly focused on securing and controlling the flow of privately identifiable customer information.

In light of the multiple high profile data breaches that have occurred over the past year, this sort of legislation can’t come soon enough for financial services firms which have become an increasing target for criminal activity.  In light of the sheer volume of sensitive financial data held on company servers, accountants will need to redouble effort to identify, document and resolve risks within their IT infrastructures. Both employees and clients will need to be briefed on the new guidelines to ensure compliance moving forward.

The Expanding Role of Accountancy

Clients are increasingly looking for accountants to serve as strategic business advisors rather than number crunchers. To help clients in this capacity, accountants must expand their skillset to areas such as data compliance, software implementation and predictive modeling and quantitative analysis.

In a business world ruled by big data, managers are looking for technical experts to make sense of the numbers and provide solid insights based on analytics; accountants must be ready to deliver holistic business solutions on time and under budget.

Skill Shortages

Over the past two years the number of qualified audit experts within UK’s accounting industry has fallen by over 10,000 workers. This is despite the fact that workloads in this niche are only increasing. As baby boomers begin to phase out into retirement, or take up senior positions within their organizations, the lack of experience and expertise within the financial services industry will only widen.

Businesses will need to identify and promote highly visible technical talent either internally or from outside the organization.  These employees will serve a mentorship role, guiding and training a new generation of leaders within the enterprise.