The Modern Accountant | 📈 How Firms Are Shifting To Strategic Accounting

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Editors Pick 📣

The Shift Is On — Strategic Accounting Is Here

In Modulr’s latest research, 75% of firms reported increased demand for business strategy advice. But only a minority have positioned themselves to meet it.

The compliance era is fading fast. To stay indispensable, entrepreneurial accountants are stepping into Fractional CFO roles, pairing sharp financial insight with the power of automated payment rails. Modulr’s new Fractional CFO Playbook shows how to swap time-based tasks for high-value partnerships, deepen client relationships and open fresh revenue streams. Modern businesses demand more from their accountants.

Your essential guide to:

• Transitioning from compliance-based services to strategic roles.

• Overcoming operational bottlenecks caused by outdated payment systems.

• Delivering high-value services like payroll, forecasting, and cash flow management.

👉 [Download the Fractional CFO Playbook Here]

Sector Spotlight 🌟

SUSTAINABLE BUDGETING

How the UK Utilises Green Budgeting for Sustainable Economic Growth

Green budgeting in the UK integrates environmental considerations into public spending, aiming for sustainable economic growth and resilience. Dimitri Zenghelis, an expert in the field, highlights that this approach shifts focus from GDP to broader measures of national wealth, incorporating natural and social capital. By prioritising investments in renewable energy and nature restoration, the UK can foster job creation while mitigating environmental risks. However, challenges remain in broadening the policy focus beyond carbon and energy and improving measurement tools for natural capital.

Progress is observable, yet more efforts are necessary to develop comprehensive wealth accounts, underpinning informed policymaking. Establishing a robust framework, building governmental expertise, and ensuring greater transparency in budgetary processes are vital. By creating standards and markets for sustainable products, the UK can stimulate innovation and productivity. Ultimately, green budgeting offers a strategic route for aligning economic objectives with environmental goals, driving a balanced growth trajectory while fulfilling climate commitments.

BUSINESS REGULATION

Government Red Tape Impedes Growth for Nearly 20% of UK SMEs

Bureaucracy continues to hamper the growth of nearly a fifth of UK SMEs, despite promises of reduced red tape. These small businesses face significant challenges with compliance and business reporting, causing a quarter of them to struggle to scale. Confidence in the economy remains low, with almost half expressing little hope for growth enhancements under the current government.

Additionally, SMEs face financial pressures, like cash flow problems and funding difficulties, with over half needing extra funds and a third struggling with payroll. Rising competition further complicates matters, urging a third to innovate or pivot their business model. The call for support from both government and industry is clear, as SMEs navigate these turbulent conditions.

MONEY 20/20 EUROPE WRAP UP

Fintech Momentum from Money20/20 Europe

Money20/20 Europe spotlighted how embedded infrastructure is reshaping financial services this year. Finance leaders emphasized real-time systems and seamless platform integration as core drivers of growth.

🏦 Open Banking → Open Finance. The conversation moved beyond payments. But trust and affordability—especially for SMEs—are slowing adoption. Regulators called for shared standards and public–private collaboration to fill the gaps.

🪙 Stablecoins played a starring role. Seen as faster, cheaper alternatives to legacy rails—especially as the EU pushes for instant payments across the bloc.

🤖 Agentic AI in practice. Beyond theory, companies are deploying domain-specific models for underwriting, customer service, and fraud detection—grounded in live data and requiring full explainability.

📈 Embedded finance leads the agenda. Embedded finance stood out as the most referenced theme across tracks. Systems that embed lending and payments into workflow are gaining traction, especially in B2B channels.

💡 Why this matters for Modulr. Modulr’s Payments-as-a-Service platform enables exactly what the industry is asking for:

• Embedded payouts and account management

• Direct access to Faster Payments, SEPA, Bacs, Visa, and Mastercard

• API-first, regulated infrastructure that scales with platforms

As B2B and SME ecosystems demand more seamless payment flows, Modulr is positioned as the infrastructure partner that makes it possible.

SUSTAINABILITY REGULATION

UK's FRC Publishes Draft Sustainability Assurance Standard for Consultation

The Financial Reporting Council (FRC) has launched a consultation on a UK-adapted sustainability assurance standard, designed to mirror the International Standard on Sustainability Assurance 5000. With voluntary application from 15 December 2026, this UK version remains largely unaltered except for a UK-specific safeguard that prevents internal auditors from taking part in sustainability assurance tasks. This move reinforces an internationally coherent framework that bolsters investor confidence without imposing extra costs on businesses. Offering flexibility, the standard can be used by both accountants and non-accountant assurance practitioners, as long as they adhere to quality and ethical requirements.

The proposition has been warmly received, with entities like the Institute of Chartered Accountants in England and Wales (ICAEW) endorsing minimal amendments to uphold international alignment and mitigate market fragmentation. Despite its non-mandatory status, the FRC believes that such a formulated UK approach will simplify domestic compliance, foster broader adoption, and encourage a seamless approach in multi-jurisdictional operations. The consultation, open until 31 July 2025, invites stakeholders to contribute feedback on this significant regulatory development.

CASH FLOW CHALLENGES

57% of UK SMEs Face Rising Costs and Cash Flow Challenges

Navigating financial challenges is crucial for small and medium-sized businesses in the UK, as 57% foresee rising costs in the upcoming quarter. Such increases pose cash flow issues for nearly half and highlight inadequate financial management as an obstacle to growth. It's imperative to engage in robust financial planning. During tumultuous times, planning can bolster resilience, enabling firms to withstand global market pressures.

To enhance financial sturdiness, businesses could embrace strategies like regular financial reviews, boosting team financial awareness, flexible forecasting to adapt to potential cost increases, and investing in automation for efficiency. Also, leveraging professional accountants can provide invaluable insights beyond mere compliance. By adopting smarter practices, businesses lower their vulnerability to economic headwinds. Embracing these practices as constants, even in calm periods, diminishes the impact of unforeseen disturbances, ensuring sustainable operations.