One of the most important things that CPA firms do is to ensure a client’s financial security. To keep up with the ever-changing accounting atmosphere, where tax preparation services are constantly changing, and skilled professionals are hard to recruit, accountants must work tirelessly. Cybersecurity is one of those challenges that CPA firms face in this present business world, which makes it difficult for them to attract clients who have sensitive information. One reason why cybersecurity has become an important issue among CPA firms is that they deal with a lot of confidential data like bank statements, credit card numbers, and other personal information from their clients. The question now becomes: how can CPAs manage these risks?
Moreover, CPA firms are struggling to keep up with the advancement of technology. Because new technology gets rendered obsolete so quickly, it is hard for small firms to keep up with the demands. Alongside these more visible struggles, CPA firms are also faced with a truckload of other challenges.
Challenges of CPA Firms
Though great challenges have come in the accounting industry, they serve as an encouragement to grow and provide more for your clients. Accounting challenges are an opportunity to grow as a company. You just need to find the right solution for these challenges.
Challenge #1. Maintaining Regular Workflow
The modern business climate has many processes for efficiency, such as measuring and monitoring. Alongside the rapid growth of technology, today’s economy, accounting firms are turning to automation tools like SAP/Oracle/SharePoint/CRM to streamline their workflow. However, CPA firms cannot afford to have one, and every organization can’t make one. Due to the ever-changing nature of CPA firms, it is necessary for them to struggle to maintain effective workflow. They are struggling to keep up with the accelerating pace of changes in accounting and must resort to old-fashioned methods for managing their workflow.
Challenge #2. Cybersecurity and Privacy
Cybersecurity is a very hot topic in recent days, as it has been integrated into the business industry. The ever-changing nature of the accounting industry makes it difficult for practicing accountants to protect their data from hackers. As CPA firms are onboarding a new cloud based document management system for accounting to store their data, the security level has become a sea of worry. CPAs need to take defensive steps to protect themselves from new technology, such as using VPN or antivirus software. In order to protect their clients’ data, CPA firms cannot afford to remain stagnant.
Challenge #3. Expectation Oriented Solutions
Accountants were once seen as service providers, but now clients are looking for value-added services. These days, customers want their CPAs to provide multiple services for them like inventory management services, payroll processing services, tax preparation services, and so on. They don’t want to have to search for other service providers, so they want the accounting firm to provide a complete solution. Accounting firms are increasingly challenged to meet their clients’ expectations of all-inclusive accounting service.
Challenge #4. Survive in Competitive Environment
The accounting business industry is expanding steadily these days- which is a sign of economic prosperity. But, as more CPA firms enter the market, there is increased competition, and it is apparently difficult for these companies to survive in such a competitive environment. Established CPA firms are finding it difficult to maintain their dominance in the competitive environment of today. It is difficult to keep up with the rapid changes in technology-based systems and accounts.
Challenge #5. Shine out & Make the Change
There are plenty of different accounting firms present in the market; each firm is different from the others. We have all spent years perfecting our business in order to provide an exceptional experience. But, it isn’t easy for new firms to stand out. It is difficult for the accounting professionals who join these new firms to find their place in such an established market and creative industry. Creating a recognizable corporate identity for new accounting firms is becoming increasingly difficult to do.
Challenge #6. Retaining Good Employees
The biggest asset of the accounting industry is its talented and skilled employees. The challenge of retaining qualified employees and recruiting new ones is a major concern for every CPA staking these days. Even though CPA firms are constantly trying to catch up with the ever-changing accounting environment, hiring skilled professionals has become increasingly difficult.
Challenge #7. Being Cost-Effective
The price reduction has been a major challenge for business development. With the blessings of technology, accounting firms are on a constant treadmill as they try to keep up with the swiftly changing tax preparation market. The high competition is making people change the way they do their job. They are using new technology to stay in business. In addition to this, firms must invest in digital marketing, office space, setting up infrastructure, recruiting new employees, and still incur daily expenses. CPA firms spend a significant amount of money in order to updates and change their systems, so the accounting industry is costly.
Here you can read how outsourcing
tax preparation services have saved over 70% of CPA firms cost?
Just One Solution
It’s understandable that with all the current problems facing accounting firms, one solution is outsourcing. By outsourcing their tax season workload to professionals who are trained in full-time status, CPA firms can better manage the influx of new regulations and staffing shortages. As these firms are adapting to the fast-paced environment, the goal is simple: Client expectations should be met.