The Accounting industry is facing huge challenges. The growing presence of technology and foreign investments makes accounting firms lose their position. This has pushed the big Firms to develop new strategies to regain their popularity and survival. Technology has really affected the operations of accounting firms.
New systems and procedures are now replacing manual bookkeeping. There has been a need to revamp the entire professional body, especially in how they interact with clients, operate, and communicate better with people involved in writing checks and maintaining accounts.
So, let’s discuss the major challenges in detail.
Technology
It’s not easy being an accounting firm these days. Technology has changed more than just the way we shop, date, and manage our finances. It’s also brought whole new challenges to the accounting industry. In the olden days, companies had to manually keep track of their money and figures, but today accounting firms have to contend with digital ledger systems and artificial intelligence (AI). This means that accountants have to spend more time looking for critical information in a sea of data rather than just adding up numbers on paper.
Cybersecurity is another huge issue facing accountants. With all of their client’s financial information, they’re a prime target for hackers, especially since it’s so difficult to protect against attacks like phishing scams. It can be difficult to even know if they’ve been hacked since many cyber-attacks are completely invisible.
Finally, machine learning algorithms are making it possible for AI programs like Siri, Alexa, and Cortana to learn about you based on your behaviour and preferences. They can anticipate your needs before you even ask and respond accordingly. In the near future, AI may be able to do everything from managing your finances to helping you find your next romantic partner—and maybe even doing your taxes.
Thinning Margins due to Competition
The accounting industry has been dealing with a number of challenges over the past few years, including thinning margins due to competition. The increased demand for online services and software has led to more competition in the industry. Companies have been struggling to adapt as they have had to cut costs and expenses.
Companies have seen a decline in the demand for accounting services in recent years, as many smaller businesses are outsourcing their accounting needs while larger companies are using software to handle their books. This is one of the significant challenges the accounting industry faces right now, along with fraud and poor ethics.
Compliance
The accounting industry is facing many challenges that affect the way they do business. Changes to the regulatory framework, tax landscapes, and accounting standards created most of these challenges. Regulatory changes are happening all the time, making it hard to keep up with everything that’s happening. And tax landscapes can be tricky because they change from year-to-year and from state to state.
Then there are accounting standards—they can be difficult to keep track of primarily because every company has different preferences or needs that might not line up with what’s in the standard. The most recent example is IFRS19 which has left the banking industry begrudged and caused unnecessary pain to the accountants.
Training and Capability Building
Accounting is one of the oldest professions in the world. Naturally, the field has undergone some changes over the years, but by and large, it’s still a profession that relies heavily on traditional business practices and tools.
We all know accounting is the language of business but it’s also a pretty complex and difficult field to break into. From employee training and capability building to attraction, motivation, and retention, here are some of the accounting industry’s challenges today. This lack of trained professionals has been one of the biggest hindrances for accounting firms growth and attracted the proliferation of “quack firms”. As a result, there’s a growing need for accounting professionals to help lower the barrier to entry and make the career more accessible to everyone.
Final Words
Overall, accounting firms face huge challenges in the industry due to various factors such as the proper implementation of technology, etc. Still, accounting firms can overcome these challenges and regain their position. Accounting firms should wisely use technology to streamline their operations and invest in other areas to attract and retain modern ideas and technological competence.
