What’s in store for your accounting firm this year? That depends on what’s in store for your accounting firm’s clients. And in 2022, there are a lot of changes taking place.
Fortunately, accounting firms can play an important, critical advisor role to clients and small businesses navigating rapid industry changes, technological advancements, and the aftermath of the global pandemic. But only if you can help them overcome the challenges ahead — and navigate your own, as well.
Here’s a look at a few of the challenges accounting firms must face today, both for the health of their own businesses and the work they do for clients — and how the right tools and technology can help.
Challenge No. 1: Outpacing the threat of technology
Tech-savvy clients expect their accountants to utilize technology and HR systems and are looking for a mix of services beyond the simple tasks that can be outsourced, like tax preparation. In fact, the “Future of Jobs” survey by the World Economic Forum Report found that 50% of complex and technical activities are expected to be fully automated by 2025, and 52% of Millennial business owners state that strategic insight and guidance are necessary from accounting firms.
This demand is leading many accounting firms to consider expanding their offerings beyond traditional tax preparation and adopting a full-service client accounting services (CAS) model by managing the range of tasks from bookkeeping to recruiting, hiring, payroll, benefits, and compliance.
In order to remain competitive, accounting firms must invest in systems that streamline data management so they can free up their employees and shift the focus to developing new skills. With the right technology in place, accounting firms can work with their customers to explain financial concepts, provide insight and analysis, and guide them as they navigate various complex situations.
Challenge No. 2: Digitally native clients distracted by DIY
Pew Research Center data shows that millennials are 35% of the U.S. workforce. As a generation that has grown up with technology, many millennials can have a do-it-yourself approach to handling finances and tax preparation. Only 21% of Millennials report utilizing a CPA firm for tax preparation, according to research by the University of South Florida’s Scholar Commons.
With the rise in cloud services in general, which according to Gartner, is forecast to increase more than 20% in 2022, and the availability of consumer cloud-based accounting software, accounting firms need to prioritize and invest in their own technology solutions in order to stay competitive and show just how much more competitive, accurate, and supportive their services are over the tech-focused competition.
Challenge No. 3: Securing data and avoiding data breaches
Accountants are entrusted with handling confidential client data and keeping that data secure. With the shift to cloud-based tools, it’s more important than ever to have suitable systems to minimize the threat of data breaches and keep client information safe.
Accounting firms that implement technology with encryption, permissions and access protocols, and offsite storage enable them to feel confident their information is safe and secure, offering peace of mind when it comes to sensitive financial matters.
Technology is on your side
While technology and tools cannot solve every problem professional services firms face today, putting the right resources in place can significantly reduce the impact of those challenges on your business.
For example, machine learning, blockchain technology, and streamlined processes in accounting can significantly reduce the time that is spent on accounting tasks. And the PwC Finance Benchmarking report shows that automation can provide time savings of up to 40%, allowing companies to increase productivity and grow their businesses by expanding their offerings and serving more clients without having to increase staff.
And that’s the first of several other ways technology is on your side:
- Streamlining key business operations allows your team to complete tasks faster while increasing accuracy and reducing costs.
- Artificial Intelligence (AI) systems with built-in predictive learning capabilities facilitate effective decision-making by gathering, sorting, and interpreting data in a fraction of the time.
- Cloud computing and mobile connectivity mean accountants can access data from anywhere, and at any time in order to provide better service to their customers.
- A single source of truth allows data to be exchanged seamlessly between accounting software and other systems, reduce manual data entry, and lower the chance for errors.
Providing professional accounting services isn’t quite as straightforward today as it was decades ago. But with the help of technologies like HR software, accounting firms can provide a true one-stop-shop approach to seamlessly managing hiring, benefits, payroll, and bookkeeping tasks, along with strategic insight and expert guidance to help them truly succeed.
A single HR, payroll, and accounting software can help streamline administrative functions like recruiting, benefits administration, and performance management while gathering valuable data and insights to help clients focus on people, productivity, and profit. And working with a provider can free up valuable time so that accounting firms can focus on other important tasks to ensure they are fully supporting both their clients and employees.
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