. Accounting professionals play a vital role in any organization by managing financial transactions, analyzing financial data, and ensuring compliance. However, despite their critical role, accounting professionals often face various challenges in their work. It include staying up-to-date with changes in regulations, managing financial data, and keeping up with technological advancements.
Whether you are an accounting professional looking to enhance your skills or a business owner seeking to support your accounting team better, our main aim is to provide valuable insights into the challenges and solutions in the accounting profession.
Accounting professionals’ challenges and practical solutions to them
Managing data security and privacy
Data security and privacy are of the utmost importance for accounting professionals because of the sensitive nature of the financial information they handle. Hackers and cybercriminals are continually developing new tactics to access and steal confidential data. Human error, lack of cybersecurity expertise, and regulatory compliance are some of the major reasons as to why managing data and security is difficult.
In order to prevent unauthorized access to sensitive financial information, accountants can protect it by putting in place safeguards such as encryption, access controls, and firewalls. In addition to this, they are able to perform routine security audits in order to identify and address any vulnerabilities.
Effective communication is essential in accounting, as professionals must communicate complex financial information to clients, stakeholders, and other departments. However, communication can be a challenge, particularly when dealing with non-financial professionals who may not understand accounting function and its concepts. To overcome this challenge, accounting professionals can develop their communication skills and focus on explaining financial information in terms that are easy to understand. They can also use visual aids, such as graphs and charts, to help convey complex information.
Staffing is another challenge faced by accounting professionals. Many businesses struggle to attract and retain qualified accounting professionals, particularly in a competitive job market. To overcome this challenge, businesses can invest in training and development programs to help staff members develop their skills and advance in their careers. They can also offer competitive salaries and benefits packages to attract top talent.
I faced a great challenge during the pandemic hit. Our team worked remotely, and it was difficult to collaborate while working on many financial factors like cash flows, new tax changes, and regulatory laws. Many of my colleagues struggled to adapt to the existing working ambiance.
As accounting professionals, we maintain documents and firm figure details in large quantities. Whenever we connect, our team interrupts the company server for daily tasks.
Moreover, we faced backlogs in the cash flow due to the unexpected downturn in business operations.
With less adequate cash flow, we continued to support the business processing by figuring out flexible plans to feed the cash requirements. As a team, we revised the salary figures and started to pay installments to our suppliers. Ensured the cash flow was sufficient to survive amidst the deadly financial crisis.
In the post-pandemic, the economic state of our firm resumed to standard figures reducing the challenges as an accounting professional.
Keeping up with the competition in terms of technology
The accounting profession is rapidly being transformed by technology, and accounting professionals need to keep pace with these changes to maintain their competitive edge.
Accounting professionals can handle this difficulty by investing in training and development to ensure they are current on the most recent tools and platforms and by leveraging technology to automate repetitive operations, boost efficiency, and deliver real-time insights to clients.
For instance, using artificial intelligence (AI) and machine learning (ML) can assist accounting professionals in automating data input, reconciliation, and fraud detection while presenting clients with more accurate and up-to-date insights.
5. Tom, Chartered Financial Analyst (CFA) at The Guaranteed Loans
Rapidly changing ecosystem
Technology is changing rapidly everywhere, and it has become almost impossible to maintain pace with it. The accounting profession is such that it takes time to assimilate new trends. By the time we adjust to the changes, new trends start emerging, bringing us back to Ground Zero.
The best solution to the changing trends is to go for automation as much as possible. Automating repetitive tasks can help this industry and make it more comfortable for accountants, especially those who have worked in the manual and semi-automatic age. In addition, automation helps assimilate and analyze data better. Thus, it reduces the time taken to compile the reports and enhances the accuracy, as well.
Maintaining client relationships
The attention span of the customer has shrunk considerably. So, it has become a challenge to maintain effective customer relationships. It adversely affects customer experience and is one of the major issues plaguing accountants.
The best aspect of technological advances is that tools are available to cater to all customer requests. These tools make the system flexible and increase automation. Therefore, customer billing, data tracking, following customer email responses, and ensuring data privacy become convenient. It helps build an excellent rapport with the customer to increase overall efficiency.
Evolving tax regulations
Taxation is another area that accountants take time to adjust. The lawmakers are responsible for formulating taxes that suit every section of society. In the process, it becomes challenging for accounting professionals to keep pace with the changes in tax management systems.
Accountants can use modern tax management software to handle taxes online. It helps automate various tasks and makes them comfortable for accountants. However, one must update the cloud-based software regularly to include the latest changes in the taxation systems.
6. Katrina Nacci, Transactional Accounting Advisor
I recently joined a community focused on remote solopreneurs and another for accounting firm owners wishing to scale their practices – and to me, the biggest hurdle is deploying technology correctly in order to have iterative projects, appropriate resource planning, and scalable service offerings.
The following are the solutions that I have been implementing are:
- Using knowledge management software (such as Notion) to easily maintain a database of technical accounting research, best practices, and lessons learned from past projects & tag them to relevant ongoing projects.
- Project management software – accounting firms shouldn’t be using Excel to lay out their project timelines, tasks, and deliverables either for internal or client-facing use. Using a more appropriate tool (like Asana or Trello) removes friction with the project team & client contacts by allowing everyone real-time access to status and bottlenecks.
- Replace calls with technology – since I do a lot of cross-border work, it’s impossible to work in the same time zones as my clients. I have adapted to working with international teams by making more work asynchronous; something accounting firms still need to roll out at scale. Most meetings can be replaced by having the right project management software in place (no need for constant status meetings) or doing async file walk-throughs. I use Loom to walk through client deliverables or to talk through my questions to a staff member on their work. If a meeting is necessary, I use Otter to record & transcribe it.
- Scalable service offerings – the only way to create a scalable service in accounting is to productize your work, which cannot be done by charging an hourly rate. Rolling out a 3-tiered pricing option for my advisory services allows me to tailor to each client circumstance (by adding or subtracting value to meet their budget). I can more easily replicate the process for each project by following this approach while still having the creative space within each process to tailor my accounting advice to individual company circumstances.
Traditional payment model
The client-facing challenge is one of educating clients that we are charging for our knowledge and not for our time. For many years, accountants charged by the hour. This makes no sense for someone like me, who has 25 years of experience and works quickly. I will make LESS money than a new account with less experience who has to do a lot of research and work slowlyI educate my prospects and clients that they are paying for my knowledge, so I do not have an hourly rate. I have no idea even to calculate that! Rather, I run my business like a business. How much REVENUE do I want to earn, and how many clients do I want to serve?
Then I divide the numbers out, and that is what clients will pay to work with me. On the professional side, staying current with the quickly changing laws and especially as clients are now countrywide, keeping up with all the different state-related issues is getting harder and harder. I am finding myself niching down to be able to truly keep up.
Accounting Professionals can Transform the Way you Operate
Accounting professionals face several challenges, but solutions exist to address them. Continuous education and training, using advanced software and tools, regularly upgrading technology, implementing strict quality control measures, and proper workload management can all help overcome these challenges. By addressing these challenges and implementing the solutions, accounting professionals can better serve their clients and contribute to the success of their organizations.
Moreover, outsourcing accounting services can be a game-changer for professionals of accounting agencies, allowing them to focus on high-value tasks while leaving the time-consuming work to a trusted partner like Accounting To Taxes. Our team of experienced professionals provides various accounting and bookkeeping services, including accounts payable and receivable management, financial statement preparation, and tax preparation.