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The Importance of CPD for Accountants

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Accountants have an exceptional initial foundation in academic learning, culminating in letters of designation and oversight from their professional accountancy body. However, in a world of constantly changing legislation and regulations, it is essential to keep up to date. This is where Continuing Professional Development (CPD) comes in. Accountants must regularly strive to remain competent and professional to gain a competitive advantage, stay compliant with the law, improve their knowledge and efficiency, while providing better advice to clients, says John Edwards, CEO of the Institute. of Financial Accountants (IFA).

Why is CPD important?

Accountants are considered the trusted business advisor of their clients and colleagues. Whether they operate as a CFO, CFO or financial controller, or provide accounting services to the general public and their businesses, they are considered the “professional expert” – the person to whom to contact for business and personal advice. . The CPD ensures that the capabilities of accountants keep pace with the current standards of others in the same field, to ensure that they maintain and improve the knowledge and skills necessary to provide such professional services.

Is the industry embracing DPC?

When it comes to the subject of CPD, accountants generally fall into two camps. A majority view CPD in terms of Cost to the business – time, money and effort – while a smaller collective views CPD as a opportunity – to keep up-to-date and compliant with the law, and to use as a competitive differentiator. What is clear is that, however you view it, all too often CPD becomes an afterthought in the annual financial plan, with to research conducted by the IFA identifying that 1 in 5 accountants meet at least 50% of their annual CPD requirement within 30 days of the deadline, and that 1 in 12 accountants do not prioritize sufficient verifiable CPD each year.

As a professional body, the IFA sets an annual mandatory CPD requirement for all its members, of 40 hours per year, consisting of at least 50%, but preferably 75%, from verifiable sources. He sees CPD as an essential part of running a business: maintaining competence in all aspects of the services accountants provide to clients and playing a vital role in retaining clients and attracting new clients.

The past two years have played an interesting role in the CPD landscape. The pace of COVID-related legislative changes has forced a very rapid uptake of information and a very responsive approach to CPD. If this were a temporary departure from an otherwise established CPD model, one would expect accountants to naturally revert to annual programming. However, if anything, COVID and the need for extremely responsive learning have further undermined an already weak model of CPD planning, and there is a risk that its reactive nature will see CPD adoption and forward planning decline further, leaving accountants potentially exposed and underprepared. for future changes.

How can accountants effectively implement CPD?

Maximizing the effectiveness of CPD comes down to planning ahead; IFA research has highlighted a last-minute trend that adds a sense of pressure and “cost” to the business. Instead, he recommends a more planned yearly schedule – at the start of each year, reflect on the services offered, reflect on personal skills, consider how quickly their services change, and then spread it out over 12 months. Assuming a true annual schedule, 50% of CPDs must be selected and booked by January to be completed by June, with the remaining 50% of hours to be completed in the second half or more usefully to be assigned to responsive topics in accordance with legislative updates. and government deployment. This way, it becomes an easy and manageable opportunity for the business and ensures considered value rather than a mad rush to comply.

What are the benefits of CPD?

Viewing CPD as an opportunity may be a mindset shift, but it is valid. Differentiation is a key advantage – getting ahead of the competition and establishing a reputation as a niche specialist or market leader with cutting-edge knowledge. The same goes for the potential for upselling, using new knowledge as a marketing tool to win more work: a member firm in Bolton used Making Tax Digital to nearly double its turnover for the year. Finally, there are the tangential benefits; being part of a learning community, gaining support from experts, nurturing an inquisitive mind, and generally gaining confidence in areas of weakness.

CPD also has an important role to play in helping accountants adopt early or in time, derive value from modern practices and develop skills for which there is skyrocketing demand. A separate IFA survey of members highlighted the potential lack of accounting knowledge, with 75% of respondents saying they had “some knowledge” of blockchain and cryptocurrencies at best, with 55% stating a low level of AI knowledge and 15% indicating no technological knowledge at all for example. In the same survey, 58.6% identified specialist skills in areas such as R&D, fraud prevention and depreciation as very important for training, while environmental ESG reporting was also cited as an issue. important opportunity. CPD can address these knowledge gaps, providing accountants with essential knowledge and market opportunities.

Are there any big downsides to forgoing CPD?

For anyone still unconvinced of the benefits of early planning for DPC, it may be worth considering DPC in terms of the risk to a business. The tangible consequences of poor CPD planning may not have been observed (yet), but that does not mean that the risk in the future does not exist. At best, being outdated or late will result in a loss of clients – the accountant or agency is simply not providing the expected service. At worst, the danger of obsolete knowledge is the direct cost of professional indemnity insurance claims and potentially the entire business and livelihood of a company, as well as the possibility of being referred to the committee regulations and be fined for non-compliance as well.

It is highly recommended to make CPD a core part of the monthly workload and to schedule it to coincide with natural lows in the fiscal calendar. It is advisable to choose training that is relevant and timely and has the added benefit of academic endorsement where possible, as well as an established learning community for guidance and peer support. Finally, leaving it to the last minute is a no-no – it can diminish relevance and value, and as a professional, who needs or deserves that?