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Accounting is the only profession that has changed drastically in the last decade, and the intensity of change has increased immensely. If we are not up to date, the risk in this business is as such it could let you be away from the accounting domain. Though the accounting profession looks like traditional and stable, the growing phase of change will shuffle its stability in a wide range of areas.
However, the major responsibility for this drastic positive and negative changes in technology. An accounting firm can get done a lot more work each day with the professional software programs available now. Some boring, repetitive jobs are easily done with this software and this helps to account firms/professionals to transfer their time on many important tasks.
2020’s technology can make any accounting process much easier for you like finding new employees for your Top Accounting firms in India and the qualified personnel who have already been vetted. At the same time, there are multiple challenges to be faced with the growth of technology in the accounting and financial domain. And, these challenges can be turned into a serious effect if not concentrated. The following are some of the challenges to be faced by an accounting firm in 2020.
1. Client retention issues
In the past accounting system, the help of an accountant was pivotal to businesses that wanted to ensure full compliance. Most accounting firms generated their revenue by compiling tax returns, but like Rob Nixon pointed in his book “Remaining Relevant: The Future of the Accounting Profession is challenging from now on. Repetitiveness breeds systemization and hence the commoditization.
Cloud services in accounting are increasingly making it possible for businesses and individuals to stack their information in an orderly format, with the accountants just to do a few final quick checks before sending returns. E-filing, on the other hand, will allow the clients to send information in just a couple of clicks away from a mouse.
In fact, these simplifications are a better thing, but the accounting profession will need to adapt its techniques in business to carry out the goals. Compliance aid will soon be the least of your tasks. That makes the accountant’s work more interesting, but also a lot more challenging, because the ease with routine income stream is dwelling through the disruptive adaptation technologies.
2. Staffing challenges in an aging professional talent pool
The Annual Accounting Operations and Technology Survey found a worrying trend. Around the world, over 60% of practices reporting that keeping and finding an apt talent in an accounting domain was becoming a challenge. For the last 10-15 years, the accounting graduates demand has exceeded supply, and even statistics show that 2 in 3 qualified accountants are in the retirement phase in the next 20 years.
There has been written much about challenges inherent in engaging or attracting and keeping quality employees, the generation that has the potential to fill this gap. In brief, the adoption of the latest technologies and office time reduction could bring importance in business. In addition to this, personal and professional development opportunities through learning as well as mentorship would pay a role in the future, so a clear career path & input into decision-making; management.
An extra issue raised by some commentators is the image of accounting as a professional choice. To a third person, it may look harden, and in requirement of an outlook to bond young talent who seeks interesting, meaningful, and challenging in work. With the actual changes in the accounting professional environment, this might be an effortless process to achieve than it seems on the hustle surface. No matter how it goes in the future, the role of an accountant is set to change in multiple quirky ways.
A few years ago, the idea of marketing accounting services was different. Whenever marketing initiatives were undertaken, it was solely about the company instead of the client.
Some of the statements like We are reliable, or We are experienced, or We are connected to the best specialists in the field assured some potential clients of the reputed accounting firms. But now, every potential client and their mindsets have changed. They are literally interested in reputations, specialized knowledge, and affordability, but all these only after they have ascertained what you can are capable of doing for them. And, if you are repeatedly following the same things that each firm does, then you can expect only mediocre results.
Maintaining and developing differentiations will supply firms a competitive edge over others. The affirmation is not just “What you can offer for me?” and also “How does this service differ from what I could get from anywhere else?” Many successful entrepreneurs in accounting said, “ Specialization is the key.”
A CCH survey found that around 66 % of firms said that specialization in a particular area of practice would be relevant to future growth. In this pristine environment, alliances forming with another professional becomes extremely important in proposing new business opportunities. In fact, half of the survey respondents said that they either existing to a specialized or internal network or to join within the next three to four years.
4. Revenue from business services becomes a major stream
The ability to flex your financial needs on behalf of your clients’ businesses by offering immense professional advice is not just a value-add but also contributes to becoming your core business.
In the past days, compliance requirements went with accounting practices in routine crunching numbers, but there were projections of business advice services up to 70 to 80 % of accounting practices’ revenue. The compliance commoditization does not need to be the bad news every day. And, now you can use deliberately that saving time to become the trusted advisor who gives your clients the financial management solution they required to achieve the business or individual goals.
Several businesses lack sound fiscal management skills and so they cannot afford the full-time services of a well-qualified person. The abilities and experience could sometimes add value to their success while making sure that you build and keep the trusted status that you deserve.
In the due course, having the advantage of financial advice from an expert who already knows the client and his or her business interests makes client’s less likely to “jump from one ship to another” in favor of one of the several “cheap” accounting services that are grooming everywhere now around the city. By constructing a reputation for your personal financial advice, you can also gain referrals and new business, aiding you to build your best practice in a constantly changing business environment.
5. Leveraging technology & artificial intelligence
On further days, more than 90 % of your practice management will be based on the cloud. Hard drives will be still available yet obsolete with compact technical support when you need it. The employees will be working on when they travel or even, they will work from home, and you will be needing to be able to supply access information no matter where you are. On moving to the cloud, if you have not used it so or have done already, it should be your next priority to lift the business. It will aid you to construct your advisory role, as you can get access to real-time financial monitoring.
Automated data analytics and capturing techniques are already in the queue, supplying you with an excellent way to realize the efficiencies without added extra input. Of course, that means running ahead with the latest technologies, and you can well find that your IT consultant becomes as pivotal to your business as your consulting services are to your clients. Artificial intelligence will be just as needed as your personal intelligence in keeping your intelligent practice running. It takes care of the routine activities in business and you can take care of the aspects that require more creative & conceptual thinking.
The 2020 Generation Accountant Project found that CFO’s consider technological ability as the top-most important skill in the accounting industry post financial expertise. More than 52 percent of the CFOs surveyed said that technical training for accounting & financial staffs would be in a high priority within the next couple of years; It makes sense as well. Clients shall also be asking for technical solutions to some old-fashioned accounting problems. They will literally expect your firm to have the expertise to advise them what to do and what not to do in their decision making.
6. The growth of global outsourcing
Global outsourcing is rapidly changing the competitive landscape in the accounting domain. Highly competent people in developing countries with weak currency to dollar ratio are willing and able to take on old-fashioned accounting tasks for a fraction of what they would cost locally. In addition to this, we see price-cutting accounting services springing up the globe. There may be some local agents here and there, but much of the work is done offshore.
Fortunately, price or currency is not the only competitive advantage that can be leveraged in the business; your constructive practice is better in developing in-person relationships with clients, second stage clients and because you are not only focusing on driving fees down as low as you can with your technical expertise but also you can focus on leveraging the driving value up as high as possible.
At the same time, the practice you adopt will be under the scanner to preserve the net local jobs. More than 72 % of CFOs said that they see the local employment preservation as a lumpsum challenge, and they are already expecting to confront in the mere future. Hence, your ability to a prescribed accounting task will depend on the competitive edge practice and marketing your milestone works effectively via digital mediums.