The accounting industry is always a challenging sector. Finance is always the backbone of the enterprise journey; thus, the challenges in management accounting have been mammoth to deal with. Moreover, social and economic changes significantly impact the accounting industry. In this, accounting firms need to prepare themselves for upcoming business challenges that the twisted economy is going through their way.
So, the finance leaders are moving towards 2023 with caution and optimism, well, the challenges that lie ahead. But, with this challenge, there are various opportunities and solution comes.
Accounting Challenges and Solutions
The accounting team leverage technologies are better able to adapt the changes and challenges like some unexpected contingencies and revenue interruptions. So, in today’s time, chartered management accountants are facing various challenges.
1. Payroll Errors
Suppose any small business decides to calculate its payroll, taxes, and benefits; possibly, payment errors and accounting problems will occur. Thus, payroll issues like miscalculating paychecks, salary expenses, and hourly wages will hurt employees’ morale and productivity.
So, the solution is to avail services from a payroll-experienced company. With the correct number of information provided, payment and taxes withheld are accurately calculated and compliant with tax laws. For the professional, you can expect accurate reports, and businesses can make tax remittances on time.
2. Not Enough Financial Analysis
An accounting team without enough accounting systems is spending too much time closing the books and leaving time for value-added work. The financial analysis adds value by calculating ratios, finding and streamlining business trends, and offering decision support for new opportunities.
The solution is to use a cloud-based ERP system and third-party add-on software with–built artificial intelligence that will automate accounting and financial processes.
3. Manage with Cyber Security
With advanced digital transformation, it becomes difficult to secure business-sensitive data. Accounting information like bank details, credit card, and e-wallet passwords are the main target of hackers. If your accounting data includes all this information, it becomes a real issue for accounting businesses to safeguard their data banks.
So, to protect the client’s accounting information, virtual accounting services abide to follow these precautionary steps:
- Use a cloud storage server to back up all your virtual data.
- Keep your software updated with the latest one.
- Provide limited access to employees
4. Regulatory Changes and New Accounting Standards
New revenue recognition standards, CECL accounting standards, and standards for lease accounting have been a great challenge for the accounting team over the past years. The different phases of standards implementations are delayed due to the pandemic and remain horizon.
So, the solution is to pay attention to the announcement. Get knowledge about a date with new regulations around PPP loans and changes related to current and future Covid stimulus packages.
5. Financial Reporting
Managing financial disclosures continues to be a concern for public and multinational companies affected by SEC requirements. The finance leaders are concerned with following reporting requirements from Covid related government stimulus programs and ensuring proper documentation, recording, and reporting audits.
So, the changes around disclosure requirements for environmental, social, and governance are likely ahead, and accounting teams should be mindful of changing regulatory landscape.
6. Diversified Accounting Skills
With online accounting services set up, traditional rule-based accounting skills are not sufficient. Currently, it is challenging for accounting firms to find competent employees with technical and accounting knowledge. So, having an employee who is an expert in using tools and software or sticking to financial rules is hard.
Knowing advanced features like forecasting and analytics is great in the current scenario. Also, it would be excellent if you updated your employees with new technologies.
7. Automation and Artificial Intelligence
Only 2% of large companies implemented machine learning and AI in their business. AI implementation enables us to solve various problems like labor shortages, automate labor-intensive tasks and provide insightful data.
As many business transactions are automated, an accountant needs to enhance their skills by applying expertise to the information and data produced by new technology. The business in accounting can use automation technologies like cloud-based accounting, forecasting, visualization, and much other software available.
Read More: Robotic Process Automation in Accounting
8. Remote Work
Like any other software company, accounting professionals desire flexible and remote work. According to research, 77% of professionals are likely to continue to work remotely. But the remote work brings challenges to accounting teams and has the risk of cyberattacks.
So, the focus is on making established financial controls work with a dispersed workforce. For most businesses, cloud-based accounting software offers apparent benefits in reporting accounting teams.
9. Advanced Marketing Strategies
With increasing marketing competition among the business, it is always a challenge for your business to sell products. Today, companies are implementing new strategies and entering the market. So, if your businesses still use traditional approaches, it will be tough for you to gain new clients.
To stay ahead of the competition, you have to revamp your business marketing strategies to grow in the future. Besides traditional marketing strategies, you have to adopt digital marketing skills.
10. Cash Flow Statement
Cash flow statements include classification errors like misclassifying the activity type for interest and dividends received and paid. A dividend received is an operating activity, and dividends paid are financing activities in the cash flow statement.
To understand the fundamentals, cash flow statement problem solving requires updation with the latest date with FASB and training topics related to cash flow statements.
On the surface, the leading accounting challenge includes people, skills, and productivity. But the common denominator at the heart of the pain point is to automate accounting tasks. Without advanced technology, businesses never realize its importance, and accounting and finance careers bring many rewarding opportunities
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