Every profession has its unique challenges. The accounting industry is no different. Let’s look at the top 7 issues in accounting and how accountants can overcome them.
Are Accountants Still Relevant?
Yes, accountants are still relevant, but the profession is definitely changing. Precipitated by the increased use of cloud accounting technology, accounts are becoming even more technical. Today, the modern accountant is chiefly an advisor, which is the greatest value of this position. Because technology is making things like data entry, bank reconciliations, and billing way more streamlined, this means less focus on entering numbers.
Instead, automated accounting tools give accountants more to analyze and report these numbers. Accountants are actually going to be in higher demand for their value in helping companies make stronger, effective business decisions. Many accountants find success in three main career directions, which you can learn about in our recent webinar, but there are still challenges and issues accountants face. Staying relevant and powerful as an accountant requires adaptability.
Top Issues Facing the Accounting Industry in 2024
The biggest issues accountants face will range individually of course, but much of it will involve technology and growing competition.
Follow along for 7 of the biggest threats and issues to the accounting profession, as well as some insights on how you and your accounting department can best overcome these challenges.
1. Lack Of IT Literacy in the Accounting Field
If you’ve been following accounting current events, the role of an accountant has steadily grown more technical. So much so that failure to adapt to cloud technology could pose a serious threat to an accountant’s job security. Now more than ever, cloud-based accounting systems are being used both in the office and remotely. Finances are going fully digital. One of the biggest challenges accountants face is being able to use cloud accounting software and operate efficiently in a cloud environment. The importance of storing and analyzing financial data from multiple business applications is also playing an increased role. Defining which business tools need to be communicated to the accounting solution and what data needs to be monitored is critical for a complete financial picture of the business.
For more details on why IT implementations in accounting departments go poorly so regularly, read on in the Why Accounting IT Implementations Fail guide.
2. Accounting Automation
Related to technology, automation is going to be a challenge for accountants, but not in a way that will eliminate their profession. Automation and even AI will not replace but actually enhance the accountant’s role if they can successfully deploy and use these tools. One of the big challenges for financial experts is being able to harness more automated functions to enhance the value of accounting processes.
3. Changing Client Relations For CPAs And Accounting Firms
Competition is always a challenge for financial experts, whether they’re solo Certified Public Accountants (CPAs) or accounting firms. With companies’ resources stretched following the business setbacks of COVID-19, they need accurate accounting insight and a smooth experience.
Developing customer loyalty based on positive client experience is critical. Not only will this help accountants provide better, more effective service, it also strengthens the customer bonds. To overcome this, accountants will need accounting features that improve customer experience.
4. The Accounting Profession Has New Skill Requirements
In addition to new technology requirements and pure accounting knowledge, accountants are facing a much more interconnected world. This means wearing multiple hats to understand how the financial picture is drawn. Specifically, this means becoming more adept at understanding business requirements, processes, and even customer behavior. Today the accountant is less about bookkeeping and more about data analytics.
In an uncertain economy, businesses need accurate, informed financial insight to save money and make the best decisions possible. Financial forecasting, financial analysis, and cash flow projection proficiency are critical skills to have now. The more proficient accountants are in these skills, the more valuable they become. Additionally, being able to create dynamic financial and business reports that answer exactly what the company needs to achieve key objectives are important.
Learn more about how Financial Dashboards can help.
5. Tax Laws are Ever Changing
A constant challenge for accountants is keeping up with tax regulations. All levels of accountants and CPAs should be mindful of changes and be able to use accounting technology and tax management systems to handle taxes online. Digital tax requirements like the UK’s Making Tax Digital (MTD) are growing across the world. Therefore, it’s important for accountants to be familiar with the tech and strategies involved.
With tax accounting software, the software is built to be compliant, meaning you won’t need to spend time considering government regulations. You’ll also save time on calculating sales tax, as it is automatically as transactions are completed.
6. Rising Competition in the Accounting Field
Competition poses a threat to those in the accounting profession. Accounting departments in companies seem to be shrinking in favor of external accounting services. Many accounting agencies also concentrate on specialized accounting skills like financial analytics and nonprofit accounting.
To keep up with your competitors, consider using accounting software to automate workflows related to previously tedious tasks like billing customers and paying vendors. Freeing up time will allow you to focus on keeping your current clients happy, and growing your client list.
7. Keeping Financial Data Secure
Internal and external accounting system threats like ransomware attacks are very prominent and will only pose a more serious threat in the future. Significant hacking and fraud incidents have been steadily increasing, with spikes since the workforce went remote during the COVID-19 lockdowns. For accountants, the challenge is implementing processes and tools to protect data. Remember, accounting errors and data theft have caused many businesses to actually fail. However, while these digital challenges remain, the advantage for accountants is in knowing the features and internal controls needed to protect financial data.
To prevent having your accounting data stolen from cyberattacks, learn more about how cloud-based accounting software can ensure data security by exploringour Accounting Software Security Guide.
Get Ahead with the Right Accounting Platform
Whether you’re an individual accountant or an accounting firm, you will thrive or struggle based on your accounting system. When you search for a solution, really consider how it will let you collect, visualize, and analyze financial data. Your system should help them do your job without skipping a beat and be flexible in a way to help your function and draw financial insight however you need. Here are a few key considerations when looking for the best accounting system for accountants to utilize.
- Does the system provide an audit trail function to track specific information?
- Is the accounting platform easy to use and adaptable to business needs?
- How efficient are accounting processes?
- What’s the level of automation?
- How flexible and robust are the reporting features?
- Are there security features that fully protect the data?
Accounting Seed helps you stay on top of the accounting technology curve. We are an accounting solution built by and designed for accountants. Our accounting software is geared to help you improve workflow, expense management, and decision-making while keeping your data fully secure. Get ahead with automation, dashboards, and Salesforce integrations to help you tailor and maximize the customer experience.
Schedule a free demo today to explore how Accounting Seed can help you overcome any current accounting challenges you may be facing.
For more free accounting resources, read on:
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- Best Financial Dashboards for Making Business Decisions
- Benefits of Automating Accounting Processes
- Best Vendor Payment Processes
- What is Integrated Accounting Software? Everything to Know
- Small Business Accounting Tips: Improving Your Business’ Workflows
- Guide to Project Accounting: Everything You Need to Know
- Financial Management Options on Salesforce
- Balance Sheet Reporting: Everything You Need to Know
- How to Make Business Financial Statements
- Does My Accounting Software Meet DCAA Compliance
- 5 Steps for Annual Reporting
- SalesForce Financial Management Options
See Accounting Seed in action
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