Over the past year, it has been quite apparent that the state’s intervention in creating the rules for operating in the crypto area as well as the great collapses on the crypto market (e.g. the crypto exchange FTX) have considerably reduced the number of those interested in the crypto business. While in the past we used to receive several calls and e-mails from undertakings that had started operating in the crypto space, this market is now virtually non-existent in Estonia. Nevertheless, we do not see this area in black tones, because the undertakings currently still operating in Estonia have conducted extensive homework in defining their internal processes and business risks, and this gives grounds to believe in the sustainability of this area. However, the digital transition in the accounting of crypto companies has taken a very important step forward in the past few years and can now concentrate and systemise transaction information.
The ratio between the price and quality of accounting services is becoming ever more important. What do price and quality depend on? Accounting service providers can be divided into two distinct branches in Estonia – firms and one-man-companies. An individual accountant offering a single service cannot compete with nor can it be compared to an accounting firm. Even if the individual accountant has very good professional knowledge and is highly skilled, the cost bases of a firm and an individual service provider differ fundamentally, as firms cannot and must not avoid costs related to data protection, information security, the prevention of money laundering and the replacement of employees. Hence the price difference.
Inflation has also forced service providers to review their pricing models. It is clear that accounting service providers cannot transfer the Estonian past year’s inflation of more than 20% straight to clients, and clients in turn cannot transfer it to their clients. Therefore, managers are still looking for possibilities to increase service prices. The instability of the economy is also definitely evidenced by the fact that cost management is increasingly in focus for both clients and accounting firms themselves.
Whether the Estonian Association of Accountants has issued a quality label to an accounting service provider also gives an idea about service quality. There are 18 firms with a quality label at the moment, including both large and smaller firms. I do see a very positive trend that the professional certificates of accountants are being increasingly highly valued and noticed. This is a good step towards better and more high-quality services as well as a more honest accounting services market.
Yes, we cannot get around the fact that firms are under constant acute pressure to find and recruit experienced employees, as competition for skilled labour is tight. Nor can we get around the effect of inflation here also, which means that the expectations of a salary increase among employees are significant and retaining good employees is becoming ever more complicated, as it is not possible to raise salaries to meet the rate of inflation.
From the viewpoint of employees, work time, workplace flexibility and workload have become ever more important in addition to a salary increase. Considering that the majority of accountants in Estonia are women, they are more frequently choosing part-time work in order to balance home, family and work roles, which means that managers have a greater role in supporting and managing people.
Of new trends in accounting, we can definitely mention the increasing demand for payroll. While outsourcing payroll accounting used to be common for international companies, for example, we are now seeing an increasing number of clients in Estonia who wish to buy payroll accounting services from service providers due to data protection or time pressure.
Another notable trend is that clients increasingly wish to use the same service provider for all their support services – be it reviewing an employment contract or full group e.g. in the Baltic countries. Seeing the bigger picture and thereby supporting the client’s business is becoming ever more important. An accountant is no longer merely a payroll calculator or tax return submitter. An accountant is like a map reader who directs companies to find more substantive solutions.
We can also be sure that information technology topics will not disappear in the coming years – be it the increased use of machine-to-machine interfaces or the use of ChatGPT and other similar artificial intelligences. The fact that people no longer simply seek digital solutions – but instead increasingly analyse the actual time saved and the cost-efficiency in choosing solutions – can also be mentioned as a positive trend.
The challenge of accounting firms is to provide services to their clients in a way that ensures that invoices or worktime sheets once entered can be used by different software programmes with only a few clicks of a button – interfaces and automatic data exchange between programmes will definitely be a keyword in the coming years. Nevertheless, regardless of artificial intelligences and smart software, a skilled accountant who understands both the programmes and the underlying business is still the most important factor.
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