Current Challenges Facing Accountants

The way people run their businesses continues to change over the years, and as this happens, so does the need for accounting to evolve. Accountants face a long list of issues, and it is essential to focus on ways to eliminate them.

Still, despite the improvements made in the past, the accounting industry faces many more challenges ahead. New developments in technology require that accountants expand their skills and service offerings to provide more consulting services.

Also, professionals are adapting to the considerable changes brought about by the SECURE Act and the Tax Cuts and Jobs Act of 2017. They are also dealing with the impact of COVID-19 and assisting clients in navigating the CARES Act, forgiveness applications, and the Paycheck Protection Program loans. On top of this are the ever-changing standard requirements of the tax and audit season.

Other challenges accountants face include staffing, cybersecurity, seemingly unending mergers, and the demand for more diversity and inclusion. However, they claim these issues pale compared to the challenges of innovative technology and the capacity to adjust to these rapid developments.

Let’s take a look at some of the biggest issues affecting the accounting sector today.

What are the challenges accountants face?

1. Technological developments

Accountants understand that there is a need for enhancing their skill sets to work better with evolving technology. The ability to learn new skills and work alongside computers is vital to their existence.

It may be worrisome that the rapid changes occurring may leave some less tech-savvy accountants behind when it comes to implementing new technologies. However, some, like Rick Telberg, the CEO of Trendlines, stated that no matter what tech evolves, businesses will always need live accountants. Companies will have to strike a balance between utilizing technology and working with accountants to provide proactive analysis, insights, and guidance.

2. Cybersecurity

Hackers are particularly attracted to accounting firms because of the treasure trove of sensitive information they keep. These include bank account numbers, Social Security Numbers, and credit card information. Cybercriminals like to target small businesses because their cybersecurity defenses are not as complex as those of big firms.

The Internal Revenue Service has always warned tax professionals and small accounting firms about the dangers of cybercrimes. Accountants are responsible for securing client information. The IRS recommends the following:

• Make sure that all employees are trained on what phishing is and how to spot it.
• Carry out stringent password policies.
• Examine the firm’s internal checks around data security, including installing antivirus and anti-malware software on all devices and keep the software up to date.
• Encode all critical files and emails.
• Properly destroy old computers, hard drives, printers, and laptops that might contain sensitive client information.

3. Diversity and inclusion

Diversity and inclusion have become a hot issue over the last decade. The general public now wants to see companies have more inclusive teams than ever. Several accounting firms have developed their own initiatives, though there still is plenty of room for improvement.

Creating and maintaining a more diverse and inclusive profession can help companies become more productive. A study by McKinsey found that companies with ethnic, cultural, and gender diversity are more likely to perform better in profitability than those without.

Accounting firms can improve on diversity and inclusion initiatives by following these best practices.

• Develop a diverse talent pipeline

If you see the same type of candidates each time you are hiring, then maybe it is time to re-evaluate your recruitment process. Try to expand your hiring efforts to include more diverse schools and work with professional associations to announce job openings.

• Track KPIs surrounding diversity

By tracking where your company stands today in terms of diversity, you can make improvements and evaluate the effectiveness of your diversity and inclusion initiatives.

• Require unconscious bias training

Unconscious bias training refers to a type of diversity training that concentrates on the hidden causes of racism. Decision-makers in the company should undergo this kind of training to remove biases during the recruitment process.

4. Upskilling

Businesses are becoming more dependent on the use of data to make sound business decisions. The Journal of Accountancy even went as far as to say that accountants who do not use data analytics may be left behind.

While accountants have always used data, there is more data from various sources today. Most school trainings did not include data analytics. Thankfully, there are several resources available online that accountants can use to upgrade their skills.

5. Competition

Freelance accountants and outsourcing companies are popping up all the time. There is definitely more competition right now. In addition, online reviews make it easier for clients to compare accounting firms before hiring one.

That only means that accounting firms need to raise the quality of their services and exceed client expectations.

Some services that can add value for clients are:

• Gifting strategies and estate planning
• Helping clients expand into new markets, go public, or raise equity
• Strategic planning
• M & A
• Succession planning
• Technology consulting

6. Commoditization of accounting services

The rise of accounting software and do-it-yourself accounting has made it appear like tax and bookkeeping are just commodities for clients. Consumers are demanding lower fees for accounting services because they may not understand the full value of the services provided.

To avoid lowball offers, accountants can take advantage of technology for automation or outsource repetitive work. With more time on their hands, accountants can work on being true advisors, providing valuable consultancy for their clients.

Conclusion

There is a myriad of issues hounding the accounting sector today. Both outsourcing accounting companies and independent contractors are working diligently to remedy these problems. Recognizing the challenges facing accountants today can help plan for the future. Taking action now can help gain control over how these pressures impact the opportunities they will create in the market and their business.