Challenges of financial accounting service firms have been plenty over the years. And there are more to come.
Most of these financial accounting challenges can be attributed to significant changes in the industry.
For instance, technological advancements are demanding that accountants and financial firms become predominantly advisors and consultants.
At the same time, changes in the regulatory space and technological advancements are keeping accountants on their toes as they try to keep up.
Add to that the usual busy action of tax season.
Despite these financial accounting challenges, financial services providers need to move forward.
You need to continue innovating and finding ways to circumvent these hurdles, find growth opportunities, and gain a competitive advantage that leads to business growth.
So, let’s understand these challenges in detail so that you can overcome them.
8 Main Challenges of Financial Accounting Firms
In no particular order, here are the top 8 challenges of financial accounting firms.
According to the 2021 Global Threat Intelligence Report, business and professional services were the industries facing the most challenges of cyberattacks followed by finance.
This explains why cybersecurity is one of the biggest challenges of financial accounting service providers.
Here is another sad statistic about this challenge.
According to a survey done by Ponemon Institute and reported by IBM, the average cost of a data breach of the surveyed industries was $4.24 million. This is a 10% increase from 2020. The U.S. had the highest cost with $9.05 million.
Firms in the financial accounting field carry a stack of sensitive financial information like bank account numbers, credit card details, and social security numbers that are of high value to cybercriminals.
Small businesses, in particular, are an attractive target.
This is because most small businesses lack the resources to invest in the advanced cybersecurity systems that enterprises use.
How can you tell if you’ve been a victim of a data breach?
- Unexplained activity in clients’ accounts. For instance, clients who haven’t filed tax returns receive authentication letters from the IRS. Clients who haven’t filed returns receive refunds or tax transcripts that they haven’t requested.
- The returns filed under your EFIN exceed the number of customers you have.
- A client responding to emails that you did not send.
- Network computers that are slower than usual or lockout tax practitioners, movement of cursors without touching the keyboard, and other technical glitches.
As an accounting and financial services provider, it’s your responsibility to ensure your clients’, employees’, and other service providers’ data is protected and this is a challenge in itself.
Here are some internal controls you can apply to mitigate the challenge.
Begin by applying the recommendations the IRS and other security experts have provided financial accounting professionals with regard to data security.
Here are a few examples:
1. Train Your Employees to Recognize Phishing Emails
Your employees regularly receive emails that contain attachments and links. The emails can be easy targets for cyberattackers to sneak malicious links into your financial accounting workflow.
Talk to your employees and explain this challenge. Communicate about why it’s important to avoid opening attachments or links from suspicious emails. Explain to them that these could be scammers masquerading as the IRS e-services, cloud storage provider, or other trusted entities.
Even as you train your employees to identify phishing emails, consider investing in anti-phishing software solutions.
These solutions identify and block or warn you about suspected phishing content.
2. Protect Your Devices
Ensure all your devices have anti-malware or antivirus software. Update the software regularly or set it to auto-update.
These updates fix security vulnerabilities with new technology. They add more sophisticated features to secure your data better and thwart cybersecurity challenges.
3. Have a Strong Password Policy
Ensure all wireless devices have password protection enabled.
Here are a few tips to create a strong password policy:
- Use strong and unique passwords, preferably long phrases that contain characters, alphabets, and numbers
- Use different passwords for each device or account in your system
- Change your passwords periodically
- Where a login ID is needed, advise your staff not to use an email address
- Where possible, always use two-factor authentication
4. Encrypt Your Data
Ensure that sensitive financial accounting information, client data, and systems are only accessible by those authorized. Develop data encryption policies where sensitive files and emails are always encrypted. You should also have access control policies in place to ensure only the right people get access to particular data.
Using VPNs is an excellent choice for online security to overcome the challenge.
They come with end-to-end encryption. This encryption keeps hackers from viewing the content, especially personal identifiable information that you share with your financial accounting clients over the network.
5. Develop a Strong Data Backup Strategy
Have a robust backup system for your data. It ensures that your financial accounting business continues even when you lose your data to a cyberattack or face other challenges.
Data backup means having duplicate copies of your data in a secondary location.
This could be an external hard drive, removable media like USB drives, or other hardware storage. For added security, it’s best to have these storage systems away from your firm’s local network infrastructure.
You can also opt to use cloud services for data storage to overcome the challenge of backing up the data.
A cloud backup involves storing your duplicate data on off-site servers that are operated by cloud storage service providers.
Some cloud providers provide small firms with large data storage facilities at a fair price. And this data can be accessed pretty much from anywhere in the world, making it great for backing up.
For a successful data backup strategy:
- Identify the critical data that you need to back up.
- Set a schedule to back up your data regularly.
- Restrict access to data backups to authorized personnel only.
6. Develop Comprehensive IRS Policies
Create comprehensive guidelines for your staff regarding the handling of your clients’ IRS accounts. For instance, ask them to always review return information before e-filing.
Monitor your IRS e-Services account regularly to check the returns filed with EFIN.
In case of data theft or loss, report to the IRS Stakeholder Liaison immediately.
Avoid transferring your business EFIN or ETIN to another entity by either sale, loan, or any other method.
7. Don’t Hold On to Data and Devices You Don’t Use
Destroy old hard drives and printers that carry sensitive data. Also, delete business data you don’t need, such as details of clients who are no longer your customers. Securing them can be a challenge.
8. Have an Incidence Response Strategy
You could have robust cybersecurity measures and internal controls in place and still face a crippling attack.
When a data breach or any form of cyber-attack occurs, is your business prepared to respond immediately? Does your staff know what actions they should take to ensure fast recovery?
If your answer is no or you’re not sure, it’s time to develop an incident response plan.
Here are some tips to overcome this challenge:
- Test your incident response plan annually and update it based on new risks or changes in your business operations.
- Assign some employees to deal with incidences. They should be available 24/7 and have thorough training on incident response roles. Train them on their responsibilities in response to cyber-attacks, such as containment and eradication of the issue.
- Set up intrusion detection alerts.
- Launch mock cyberattacks to evaluate the strength of your incident response plan.
- If you experience a cyberattack, analyze and document everything about it to recognize the weaknesses in your cybersecurity system
Failure to properly manage your firm’s security can result in irreparable reputational and monetary damage. You could end up losing money in costly lawsuits from the affected clients.
#2. Technological Advancement
The rise in technological advancement is also one of the biggest challenges of financial accounting firms.
It’s hard for accounting and financial service firms to stay updated with new technology as they also try to stay on top of regulatory changes and tax laws, beat tax deadlines, and a lot more.
The changes in technology also mean financial accounting systems are becoming outdated fast, which is yet another challenge.
Financial accounting services firms have to constantly update or upgrade their accounting software to get the most advanced functionality in the industry and stay ahead of the competition.
Despite these financial accounting challenges, technology is a good thing in terms of:
- Increasing accuracy. It helps financial accounting professionals avoid tax penalties and other challenges that can result from errors.
- Making it easier to carry out highly organized and efficient audits.
- Enabling analysis of data in real-time. This is made possible by cloud computing, which allows access to data from any location.
- Making it possible to access financial accounting data and tools from mobile devices using financial accounting apps.
To beat these challenges and leverage technology in financial accounting, here’s what you can do.
1. Embrace Technology
The best bet to overcome this challenge is to become an IT-savvy business.
This starts by investing in up-to-date and future-ready financial accounting systems.
Sure, your staff may have mastered legacy financial accounting systems. But cloud-based IT infrastructure makes it easier to adapt quickly to advancements in technology such as AI, robotic process automation, and big data.
This is because cloud-based infrastructure is more flexible and more secure and scalable. It can accommodate large amounts of data compared to an on-premise IT setup.
The right infrastructure will help you leverage the power of automation in all departments, such as marketing. Marketing automation and artificial intelligence can help your firm:
- Target new and high-quality customers.
- Use highly personalized communication to build strong customer relationships and create customer loyalty.
- Enhance customer satisfaction by sending timely email newsletters and SMS reminders.
2. Stay Up-to-Date on the Latest Trending Technology
Try to stay on top of emerging technologies that are impacting the financial accounting industry as well as your clients’ industries to overcome the legacy tech challenge.
Get your info from trusted voices in the tech industry. CNET, TechCrunch, and Wired are some of the top blogs for tech news across all industries.
Attend financial accounting industry conferences as well, such as the AICPA & CIMA ENGAGE and Boomer Technology Circles™ Summit.
3. Join Peer Network Groups
Peer networks are communities of like-minded professionals where you can learn from the collective experiences of your peers in the financial accounting field.
You get to discover new tools that are worth investing in. Additionally, you get to learn how other firms are leveraging new technology, find solutions to your financial accounting challenges by learning about their challenges, and a lot more.
Actively participating in these groups will help you make more informed technology decisions. You’ll get more confidence to try out new financial accounting software and tools that can help your business save money in the long run.
4. Invest in Upskilling
Your financial accounting firm needs professionals who are IT-savvy to keep up with the evolving marketplace standards.
It’s not just about being an expert in spreadsheets and calculations anymore, you need employees who are adept in all matters of technology.
An easy way to get the specialized skill set you need is to boost the skills of your existing workforce by upskilling them.
Upskilling is cheaper than hiring new talent.
The fact that these employees are already familiar with your firm’s financial accounting processes and industry specifics is also an added advantage.
Since most repetitive services can be replaced with financial accounting automation, you can use the free time created to teach your staff new skills.
For instance, with the advancements in technology, financial accounting firms have more data than ever from plenty of sources. That makes it important to train employees to use their expertise to carry out predictive and prescriptive data analytics of this big data.
You can enroll them in training programs like the Data Analytics Certificate Program by AICPA.
Don’t just focus on tech skills and data analytics. Train your employees on related soft skills, such as adapting to change and developing a growth mindset.
Research indicates that continuously developing your employee’s hard and soft skills also has the benefit of increasing loyalty and reducing the churn rate.
#3. Commoditization of Services
There are plenty of automated accounting and financial service software solutions out there. Users only need to import transactions from their payment services or bank accounts and the financial accounting software provides automatic financial reports.
It has led to one of the biggest challenges accountants face—the commoditization of services.
Clients are seeing bookkeeping services as a commodity because they fail to see the value that accounting and financial services firms provide.
They see price tags as the only thing distinguishing rival financial accounting firms. And this causes them to go for financial accounting firms with the lowest-priced services.
It causes downward pressure on prices as financial accounting businesses compete to attract clients.
This downward price pressure on your services is one of the financial accounting challenges you can easily manage with these 3 actions:
1. Package Your Services
Providing services like rules-based financial statements, an accurate financial accounting process, and tax returns is no longer satisfactory.
You’ve got to add more value to your financial accounting services to distinguish your business from rival firms.
How do you overcome this challenge?
You can achieve it by providing financial data analytics and actionable advice.
You can use a bundled pricing strategy that packages technology and analytical services together.
Automate any repetitive and low-value financial accounting process.
Financial accounting automation frees up time and increases your capacity to offer advisory and consulting services to your clients.
Here are some other services you can provide:
- Interpret and translate data to provide strategic advice
- Use data to provide accurate financial forecasts
- Leverage your financial expertise to provide your clients with new ideas and business strategies that will bring them closer to their business goals
- Guide your clients to raise equity and expand to new markets
- Help your clients go public
- Provide estate planning services and gifting strategies
- Assist your clients with mergers and acquisitions
- Provide financial risk management services
- Help your clients develop effective pricing strategies
- Guide them on how they can create a financial plan
2. Narrow Down on a Niche
Narrowing your target audience to a specific niche will help you build the reputation of your financial accounting firm as a specialist as opposed to a generalist.
It’ll grow your authority in this niche market, making it easier to charge a premium price that clients will happily pay. This will help you overcome the challenge of being labeled a generalist.
Specializing in a niche may feel like you’re casting a narrow net. But the good news is that most buyers are turning to digital channels for answers related to their businesses.
It creates an opportunity to direct your marketing efforts using digital channels like email marketing, content marketing, and social media. And with a targeted market, there’s less competition. At the same time, you’ll be able to craft laser-sharp messaging for your audience too.
For instance, it’s easier to rank higher on search engines for the keyword “law practice bookkeeper” than “bookkeeper”. The reason is that the former is more focused while the latter is pretty generic.
It makes your high-value and specialized expertise more visible in the marketplace, which attracts lots of qualified prospects.
3. Define and Promote Your Value
It’s not enough to just specialize in a niche and provide advisory services. Let potential customers know about them.
Create a message that defines the value your financial accounting firm brings to the table and promote it.
Your messaging, from the way you interact with clients on phone to your email newsletter and social media, should have your value proposition at the core.
Here are a few tips to help you create a value proposition that gives you a competitive advantage and attracts conversions.
- Understand your customer and the challenge they’re facing and what they hope to gain from working with your financial accounting business
- Describe the features of your services that will prove to be most useful for your client
- Keep your value proposition simple and easy to understand
#4. Managing Remote Workers
Employees across all industries are seeking work environments that offer more flexibility on when, where, and how they work.
It supports their work-life balance, which is a priority now.
Image via LinkedIn
Most employees are also ready to walk away from employers who don’t provide this flexibility.
The report also indicates that employees who get this flexibility are 2.6 times happier.
However, providing flexible working hours is one of the business challenges of financial accounting firms for several reasons.
Remote Working Challenge #1: Makes it Tricky to Collaborate on Tasks
Accounting and financial services firms have, for decades, spent long nights in the office brainstorming and collaborating on month-end closes.
When faced with the challenge of carrying out the same tasks using a dispersed workforce, it becomes difficult.
Remote Working Challenge #2: Risk of Cyberattacks
Accounting and financial services firms with remote teams are also more prone to cyberattacks as the devices that remote workers use could be vulnerable.
This makes cybersecurity a major challenge for firms. Without the constant scrutiny of the IT department, most employees tend to be less thorough with cybersecurity practices while at home than in the office.
For instance, they could move company data to their personal email accounts, making it easy for cyber attackers to exploit it.
Remote Working Challenge #3: Hard to Maintain a Strong Company Culture
Businesses are expected to deliver an equitable experience to employees working remotely and those working on-site.
This, as well, can be a major challenge for the business.
So, what can you do to overcome these financial accounting challenges? Here are 5 tips.
1. Use Cloud-Based Financial Accounting Software
A cloud-based financial accounting system helps you overcome remote working challenges by helping employees work from remote locations. It’s also moresecure as it comes with enterprise-grade security.
They only need to sign in to their account from any location and they can access the data they need.
Cloud computing also supports task collaboration. This makes it possible for your team to work from anywhere together in real-time.
2. Encourage Social Bonding
Open up avenues for non-work communication and social bonding to create a good work culture.
You can set up a video chat game night, virtual wellness activities like yoga, celebrate birthdays, and work anniversaries.
Find activities that’ll build harmony in your accounting team.
3. Encourage Open Communication
Set up policies regarding routine check-ins, communication methods, acceptable response time, and other practices that’ll make communication easier and more intentional.
4. Communicate Your Company Values
Share your company values with the accounting team. Find ways to make the team refer to these values on a regular basis.
For instance, add them to your firm’s website or create a weekly email where your employees share how they incorporated these values into the accounting process.
5. Set Performance Standards
Typically, performance standards are guidelines given to new hires to help them understand their role in the business.
Use performance standards to remind team members in a remote work environment what is expected of them. Remind them how they are expected to act even in a remote setting, and the goals you expect them to achieve for the business.
It’s important to also use the performance standards to evaluate team members periodically.
#5. Keeping Up with Tax Law Changes
The ever-changing regulatory environment, such as the Tax Cuts and Jobs Act, is also one of the top business challenges of financial accounting firms.
Accounting and financial services firms have to keep track of changes in property, income, luxury, excise, and corporate taxes and their complexities to get accurate total tax liabilities for their clients.
You also have to keep track of legal procedures that govern the way federal, state, as well as local governments calculate taxes.
If you’re feeling overwhelmed by these ever-evolving complex laws and policies, here are a few tips to guide you:
1. Use IRS as a Reliable Source of Information
Don’t rely on third parties to read about current laws and updates. Use the source of these laws to avoid confusion or omitting important sections.
Congress passes tax bills. But the Internal Revenue Service (IRS) is the one responsible for enforcing them. The IRS website is always updated with a handy summary of changes in tax law that are in effect.
Image via IRS
The IRS website also contains comprehensive guidance on all tax-related topics and has plenty of resources for accounting and financial services firms.
2. Confirm the State Tax Laws
State governments also alter their tax regulations based on the business type, the state’s business environment, and other factors.
Use the website of the concerned state government to track the current tax laws and policies that are in effect.
Here’s an example of Alaska’s tax information.
Image via Alaska
You’ll also get general tax information and guidelines that apply to businesses operating in the state.
3. Subscribe to the Association of International Certified Professional Accountants (AICPA)
The AICPA provides plenty of resources, tools, and guidance to accountants on taxes and financial reporting requirements.
Members also get newsletters that contain tax law changes that are in effect and the effect that these changes will have and other important changes that affect the industry.
4. Keep Your Tax Software Updated
Most tax software solutions incorporate federal and state tax codes. But you need to update the software regularly to get the edition with the current tax code.
It prevents the confusion that comes with having to update the software manually, which can result in errors and confusion.
5. Follow up on Staff’s Continuing Professional Education (CPE)
Accountants are required to continuously get training. It helps them stay up-to-date with changes in tax regulations, financial reporting requirements, and other aspects necessary to provide accurate tax and accounting services.
Ensure your staff is getting the minimum hours required. AICPA members, for instance, are required to have a total of 120 CPE hours in three years to keep them competent to provide professional services.
6. Hold Training Sessions with Your Staff
Train your staff or hold meetings where you brainstorm the new tax laws and regulation changes.
Address any questions on how these changes will affect how your accounting business provides its services and ensure everyone is on the same page.
Remember that your clients are also relying on you to inform them of tax law changes and help them avoid penalties from IRS.
Discuss with your staff how your business can educate clients on these changes in a way they can understand and adapt seamlessly.
7. Read, Read, and Read Some More
Read regularly to stay aware of the tax laws that are being proposed and how these laws will affect your industry and your clients’ businesses.
Make sure you read financial literature, finance and business periodicals, state and national business journals and publications, and more.
8. Connect with Other Accounting Professionals
Associating with other finance and accounting professionals is an excellent way to stay updated on changes in the tax arena that you may not know about.
You’ll learn from other experts in tax matters, discover tricks that’ll sharpen your skills, and get insights from business leaders that’ll help you deliver better services to your clients.
There are plenty of organizations you can join, such as the National Society of Tax Professionals (NSTP) and the National Association of Tax Professionals (NATP).
You can also stay in the loop by attending IRS webinars. These webinars will help update your tax knowledge and skills.
Image via IRS
9. Don’t Ignore Your Clients
Many business owners understand the impact of tax regulations on their business operations and have a deep interest in the topic.
For this reason, they follow tax laws directly affecting their industry in a way you probably cannot. By paying attention to what they know, you can get insights into areas you need to research.
#6. Shortage of Top Talent
Accounting and financial services firms are also finding it hard to hire and retain the best talent in positions like accounts receivable, collections, billing, and others.
With competition for this top talent being fierce, it’s become increasingly challenging to recruit new employees. However, the ever-increasing workloads mean that your current employees could experience burnout.
This makes it hard for many businesses to retain their most valued talent.
Heavy workloads have been a perennial challenge for accounting and financial firms, and the workload is not getting any smaller.
But despite this challenge, there are several ways through which you can hire and gain the loyalty of top talent in the accounting industry:
1. Automate Tasks
As we mentioned, the onward march of technology has made it possible to automate most transactional tasks and data entry work.
Invest in these accounting automation tools to give your employees some time to breathe. It can also reduce manual errors.
2. Encourage Professional Development
Provide comprehensive and individualized training to your employees. Help them succeed by paying for courses related to their area of expertise.
Showing employees that you’re invested in their professional development keeps them motivated and loyal.
3. Hunt for Top Talent Aggressively
Small accounting and financial services firms have to compete against established firms for the same talents.
You can win by being on the lookout for top talent continuously. Offer them an attractive salary and benefits package that gives you a competitive advantage.
4. Create Time to De-stress
Allow your employees time to step away from their computers.
For instance, create weekly social gatherings during office hours where employees can share refreshments and snacks, and chat.
Set aside time for offsite outings, company-wide games, and wellness programs. It’ll boost morale and engagement.
5. Receive and Give “Unofficial” Feedback
Don’t wait for year-end performance reviews to appreciate your staff when they excel or point out where they need to improve.
And don’t be too formal about it either. This feedback can be given in casual conversations.
It’ll make your employees more aware of the direction they should be taking with their work, which boosts morale. In the same way, be ready to receive and embrace employees’ ideas. It’ll make them feel recognized and valued.
6. Offer Effective Business Leadership
Share your firm’s vision and make employees feel like they’re a part of it. Ensure your supervisors have effective people skills and can motivate staff working under them.
Train your supervisors not to micromanage, command, or control their subordinates. This kind of behavior can cause anxiety in the workplace and top talent will quit.
#7. Client Satisfaction
In today’s world of social media platforms, it’s easier for clients to share the experiences they had with your accounting business with the world.
And these messages can affect how potential customers perceive your business and respond to your services.
A negative review can impact your conversions significantly.
Results from a survey done on U.S. online customers showed that 94% are more likely to use a business if it has positive reviews. When asked if negative reviews make them less likely to use a business, 92% agreed.
Image via Statista
And with plenty of independent accountants rising every day, clients have the opportunity to compare accounting firms and independent contractors before picking the one they’ll work with.
For these reasons, it’s important that you provide top-tier services to reduce the chances of negative reviews.
How do you improve the experiences your clients have with your business?
Here are 5 tips.
1. Communicate Regularly
Don’t make assumptions about what your clients need. Interact with them openly to know what they expect from the relationship.
Ask questions and understand their business as much as possible.
It’ll help you understand their requirements, develop a strategy that meets their goals, and deliver the right experience.
Be sure to provide regular updates and when the client reaches out, respond promptly.
2. Offer Your Services Proactively
Your aim should be to help clients move forward with their business and succeed. For this reason, it’s important to be proactive in offering your services and not go in the reactive direction.
Help them discover potential challenges in advance and let them know what you are doing to prevent them.
Also, inform them of the changes in tax regulations and policies and any other developments that affect them. It’ll improve satisfaction with your accounting services.
3. Focus on Client’s Needs
If you’re burdened with work, you’re likely to find yourself focusing more on getting tasks completed than meeting your clients’ business needs.
To avoid this, create multiple avenues where clients can provide feedback and raise their concerns. Be sure to respond to the feedback positively.
4. Vet Your Customers
Only accept accounting clients who fit your profile and business processes. They should understand your value and you should be able to meet their needs.
Working with clients who match your workflow will lead to fewer hiccups in your engagements and this, in turn, will lead to long-term relationships.
5. Work with the Right Accounting Team
If your employees do not care about their work, it’ll show in the way they interact with clients, address their challenges, and provide services.
You want an accounting team that takes ownership of their client relationship and truly cares about meeting their needs.
Now, if a client is unsatisfied with your services and shares their negative experience, here’s what you can do to prevent any further damage:
- Acknowledge the complaint and respond quickly
- Issue an apology and empathize with the client. Don’t argue
- Take responsibility for the issue. Getting defensive could worsen the situation
- Shift the discussion to a private platform
- Fix what you can. You can offer a free service or refund too
#8. Marketing Your Accounting Services
Marketing isn’t exactly the forte of a financial accounting business. So, if you’ve been trying to promote your portfolio, experience, and reputation, you need to stop right there.
Clients want to know what your firm can do for them. So, your campaigns have to be about them, and not you.
Don’t forget that these clients also know that they have plenty of options.
It’s important to show what makes your business different from the rest. And as we mentioned earlier, share your value proposition.
So, how do you get your ideal clients to know about your value proposition? Here are 5 ways.
1. Create an Attractive Website
Create an attractive website with a clean design. Use it to showcase your top-performing services to potential customers. It’s your virtual office, so make sure it’s decked up well.
2. Leverage Search Engine Optimization (SEO)
Maximize the number of people visiting your website by using SEO techniques to help your website rank higher for search terms related to the services you provide.
3. Create a Blog Section on Your Website
A regularly updated blog sets you apart as a thought leader in the accounting and financial space.
Use it to share your knowledge on topics that are relevant to your clients. A blog will also support your SEO efforts if you:
- Incorporate the right keywords
- Leverage SEO best practices
- Create valuable content
- Publish regularly
4. Develop a Social Media Marketing Strategy
Build your social media presence. You’ll find a lot of professionals and business owners on LinkedIn. You can also become active on Twitter, Facebook, Instagram, and other platforms.
Post valuable content and initiate conversations with your followers on these platforms to get the attention of your audience.
5. Give Email Marketing a Try
Collect your leads’ email addresses and send eye-catching content regularly. Share financial tips, business strategies, and tax updates.
Include a teaser or CTA with a hyperlink that leads back to your website where they can reach out to you for your financial accounting services.
1. What is the biggest challenge facing the accounting industry today?
The top challenges of financial accounting companies include:
- Technological advancement
- Commoditization of services
- Managing a remote team
- Changes in tax laws and financial reporting requirements
- Hiring and retaining top talent
- Client satisfaction
- Marketing your business
2. What are the major challenges of financial accounting information systems?
The major challenge with accounting information systems is data loss due to cyberattacks.
The rapid technological advancements also mean that accounting and financial services firms need to constantly update their systems to get the most advanced security features and provide the best accounting services.
3. What accounting challenges do you see affecting the industry in the future?
Future challenges of financial accounting firms include:
- Technology continues to match forward. Accounting and financial services firms will need to continuously adapt to these changes now and in the future.
- Robotic process automation and artificial intelligence, as well as other technologies, would make it difficult to find the right employees.
- The upward progression of tech means a rise in cybersecurity threats as well.
4. What challenges do accounting & financial services firms solve?
Financial and accounting services firms prepare, review, and audit financial statements. They are tax preparers and also offer consulting services on matters of accounting systems, mergers and acquisitions, and capital raising.
5. What are threats to accounting firms?
The main challenge to accounting firms is the threat of cyberattacks. Loss or breach of data can prove to be costly for them.
6. What are the potential security breaches for online accounting software?
The main challenges of online or cloud accounting software include:
- Security of the infrastructure. The cloud-service provider hosts all the servers, meaning the accounting business cannot control the security of this hardware or have physical access to it
- Users with weak passwords make it easy for hackers to hijack accounts
- Cloud accounting software supports easy sharing, which carries a high risk of accidental data exposure
7. How safe is cloud-based accounting software?
Although it’s not 100% foolproof, cloud-based accounting software is safer than traditional software as it comes with enterprise-grade protection.
8. What are cloud-based accounting systems?
A cloud-based accounting system is a web-based software that follows the software as a service (SaaS) business model.
It’s hosted on remote servers, unlike traditional accounting software that is hosted on your business premise.
9. Is the accounting profession still relevant?
Yes, even though automation has led to a lot of processes becoming streamlined, it only helps free up your time as an accountant. Accounting as a profession is still very much in demand as you need to know how to work with automation too.
10. What are the biggest accounting challenges and opportunities that the finance professional faces today?
One of the biggest challenges of financial accounting professionals is automation. However, it creates an opportunity for professionals to take on advisory roles, which are still very much in demand.
What are the Biggest Accounting Challenges You’ve Faced in Your Business?
The challenges of financial accounting firms are numerous. But with each challenge, lies an opportunity for financial accounting professionals to evolve.
Keep learning and maintain an open mind. It’ll ensure that you’re on top of technology advancements and changes in tax regulations.
It’ll help you provide more efficient and accurate services to your clients.
Don’t be afraid to take on roles outside the traditional accounting responsibilities. Become your clients’ business advisor and turn the accounting data you gather into actionable insights that’ll help their business grow.
Gather the best team, without paying attention to geographical boundaries, and create a productive remote working environment.
Over to you.
Which accounting challenges have you faced in your business? How have they helped you grow? Share in the comments below.