Top Accounting Trends in the UK for 2023
Following FloQast’s first UK State of Play report in 2022, we’re taking a fresh look at how the accounting industry, and its employees, are managing professional challenges in a changing financial landscape. FloQast’s 2023 State of Play report picks up where the previous left off: From the economic growth and tech boom of early 2022 to the challenges of the latter half of the year, including the war in Ukraine, lingering pandemic concerns, and political upheaval.
The report represents a survey of 500 finance directors and finance controllers from UK companies of every sector, company stage, tenure, and department size, with survey research, carried out by Censuswide In commissioning the 2023 report, we wanted to explore contemporary accounting industry trends and challenges, and understand how UK companies are faring on the path to operational excellence.
If you do business in the UK, it’s critical that you understand the financial landscape, and the pressures affecting the accounting profession in 2023. With that in mind, let’s take a closer look at the key takeaways from the current State of Play:
Following a turbulent 12 months, the Bank of England is projecting the UK’s longest recession on record in 2023. This research suggests that up to one-third of UK organisations will have less than six months of runway during a recession – a financial constraint that will place added pressure on accounting teams and make agile forecasting and reporting a necessity to maintain business performance.
The economic uncertainty of a recession means that companies will need to take a strategic approach to managing operating expenses, with options including raising additional investment, hiring freezes, salary freezes, and cutbacks. The need to operate with fewer resources will affect both accounting teams and workflows: This research suggests that cashflow problems, low morale, tight deadlines, and the loss of team members are fuelling fears of burnout in over 50% of companies.
Managing Professional Pressure
Effective accountancy is critical to helping organisations make sound financial decisions, but recent geopolitical events, such as the coronavirus pandemic, have impacted the ability of accounting professionals to deliver operational excellence.
In 2023, accountants’ concerns about their ability to perform at the required level is translating to significant levels of job dissatisfaction. Survey respondents cited numerous barriers to operational excellence in accountancy, including deadline pressures, the increasing complexity of accounting systems, and the regulatory risks of audits and financial reporting.
The pending recession has exacerbated those concerns, with over 60% of accounting teams worried that those challenges will affect their ability to close at month-end. Worse, most accountancy teams (63%)believe that problems such as inaccurate or insufficient data are compounding recessionary expense and runways problems – and now starting to impact their company’s organisational performance.
Preparing for the Future
UK accountants are justifiably worried about managing month-end Closing pressures in 2023, but many also point out factors that can mitigate that challenge. Those mitigating factors include improved communication between team members, the facilitation of remote work, easy access to remote financial information, and enhanced accounting software programs.
Almost half of accountants believe that new technologies are the primary means of improving operational excellence at their companies. Respondents cited the specific benefits of technological advancements in the financial industry, such as improved accuracy and automated accounting processes, and the potential for employees to collaborate more effectively using cloud-based accounting software.
However, while accounting technology clearly plays an important part in the reduction of month-end stress, nearly half of UK organisations failed to integrate new financial software in the past 12 months.
Take Control in 2023
The 2023 State of Play report demonstrates that UK accountancy teams have the skillsets, desire, and experience to meet their professional goals – and are continuing to strive for operational excellence in the face of significant professional and economic challenges. With a recession looming, however, underlying pressures, such as unrelenting stress and lack of funding, are stretching accountants thin, and causing an increasing number to leave the profession entirely.
While technology and accounting automation is widely cited as a solution to many of the problems facing the accounting industry, barriers to its integration remain – not least in the form of a looming recession and an unwillingness from leadership to embrace digital transformation. From SAAS cloud-based accounting software and real-time financial data resources to apps that reduce the repetitive tasks of bookkeeping, there is an array of technological tools available to address the specific pain points of the financial landscape. With that in mind, it will fall to company leadership to explore and understand the future of accounting in the UK, and then take the initiative to equip their accountancy teams with the tools they need to get their job done.