Accountancy as a profession has always been subject to change, from the invention of book-keeping to the introduction of calculators and computers. In the past decade, however, the rate of change has accelerated, with a proliferation of new technologies having a significant impact on the sector. Competing in this modern, technology-driven climate, accountants and accountancy firms must adapt to survive.
Accounting challenges faced by accountancy practices
Accountancy practices supporting medium-to-large sized businesses face a number of challenges. In addition to a technological revolution, political, legal and economic influences are all creating hurdles that accountancy practices will need to overcome.
Adopting new technology
The onward march of technology is inevitable, and for today’s accountancy practices, sophisticated cloud-based software is required in order to meet the demands of clients. Many accounting firms will face the practical challenge of choosing and implementing new software. They will need to have one eye on the future in order to select the accounting system that will serve them best, and plan carefully in order to project manage the changeover to a new system.
Finding new talent
With an ageing population of senior finance professionals fast approaching retirement, accountancy practices urgently need to recruit new talent in order to avoid a skills shortage. They may need to offer more attractive packages to promising new recruits, and provide on-the-job training to help younger employees to develop their skills.
There is currently a huge amount of uncertainty surrounding the tax and other financial implications post-Brexit, and firms can expect the impact on their clients to have a knock-on effect on their own businesses. While some effects of Brexit may be negative, accountancy practices may also see a surge in demand for financial forecasting services and other expert advice.
Problems faced by accountants
Day-to-day accounting challenges look very different from even ten or twenty years ago. New technologies have raised client expectations, and with the changing technological and financial landscape, accountants must keep up with new developments in order to compete.
With accounting software becoming increasingly sophisticated, there are a growing number of accountancy tasks that can now be done automatically with cloud accounting software, without the need for input from a human being. To avoid becoming redundant, accountants now need to adapt their role, marketing themselves as expert advisors rather than simply doing the books and producing reports.
With the rise of cloud-based accounting, life will be easier in many ways. It’s vital, however, for accountants to realise their responsibility for keeping financial data secure in the cloud. They will need to reassure clients that their accounts are protected behind a firewall, backed up regularly and that their software is up-to-date with the latest security patches.
We’ve seen that the world of accounting technology is changing. There’s no reason to suspect that this will stop, so accountants cannot afford to rest on their laurels. They must ensure that their skills are kept up-to-date, so that they are equipped to deal with the latest challenges, such as digital tax and VAT returns.