Accounting Challenges to Look Out for this 2021

What are the most pressing accounting challenges today? Aside from following the trend towards digitalization, accounting firms got their work cut out for them for 2021 as the pandemic continues to take its toll in the industry.

Finance and accounting companies are finding ways to keep up with the drastic changes since the previous business year, where organizations from all verticals experienced a steep decline in operations. In an attempt to bounce back this year, they are reinventing ways to resolve the accounting challenges they might encounter while recuperating. 

What are the Accounting Issues today? 

Workforce 

• Employees with right expertise 

This has been an urgent concern through the years, but is intensified because of the crisis. The pandemic became the push firms and businesses needed to migrate to cloud-based platforms, which then demanded the technical expertise of employees to maximize the programs. 

Hiring professionals who can both proficiently navigate cloud accounting software and possess the right accounting knowledge rose as a challenge for organizations today. While it is imperative that accountants have analytical and bookkeeping skills, professionals who have the technological initiatives essentially help you embed digitalization to the business. 

• Acquiring new skills

There is a pressure among accountants to upgrade their skillset. 

As new technology and tools are introduced to augment their bean-counting skills, they are still to learn how to stay competitive so as not to be obsolete in the industry. 

Soft skills are as important as technical abilities. But given the fast pace of accounting’s digitalization, accountants need to prepare themselves for the future that may not be too far ahead.

Read Next: Five Cool Career Opportunities in Accounting for Millennials

Operations

• Automation

The proliferation of automation gave birth to the technology revolutionizing the industry: the cloud, robotic accounting, artificial intelligence, and blockchain, among others. They make bookkeeping easier, streamlined, and faster than manual processes. 

Although automation comes with a full-suite of benefits, they also bring about a sense of threat to the accounting profession itself. 

Yes, automation changes the accounting landscape but as it advances, they also reshape the roles and functions of the accountants. Instead of working side-by-side with the technology, these professionals are threatened to soon be replaced by these machines. Needless to say, their relevance can possibly plummet depending on the advancement of automation. 

• Cybersecurity

Cloud accounting’s ultimate nemesis is data breach.

Housing your financial information into the cloud platforms gives a guarantee that your numbers and confidential documents are backed up and updated in real-time. You can collaborate and share them with your clients conveniently using mobile apps anytime, anywhere. 

However, upon using cloud-based channels, there are still risks of data breach around the corners. Though it can be from minimal to none, doubling your efforts for cybersecurity is still a way to go to ensure your numbers are safe.

Industry 

• Changing tax/accounting laws

In the US, the Financial Accounting Standards Board (FASB) is in charge of the reporting standard across business and nonprofit organizations. This governing agency functions as an implementer of  the regulations in accounting and makes the changes deemed necessary.

When tax rules are modified, the burden of adjusting goes to the accounting firms and bookkeepers. While the basic principles of bookkeeping remain, the laws passed makes them complex over time. Conformity, then becomes a challenge, especially that firms handle clients from different countries. 

Like most verticals, the industry is plagued with new accounting challenges this 2021. Identifying them as early as now gives you an edge to mitigate the risks and completely avoid them in the long run.

If you’re looking for a right hand in managing and overcoming these issues, here’s where we come in. D&V Philippines offers high-end assistance to CFOs like you and helps drive better business decisions. Get our Premium CFO Solutions today and know how we can help drive your business forward.