The accounting industry has been through many substantial changes and has challenged CPAs and accounting firms to change their business strategies and methodologies to stay on top. With these transitive changes in the industry and technology taking the front seat in this revolution, CPAs now have to constantly adapt in accordance with the ever-changing industry standards to survive and stay relevant at the same time. These challenges, however, have only made CPAs and their services more attuned to the modern times.
Here are 5 common problems that CPAs have to face nowadays.
1. Talent Retention and Acquisition
The demand for skilled employees is growing day by day, but experienced CPAs often tend to quit their firms in search of greener pastures, starting their own private practice or as a public accounting firm for a controller or as a chief financial officer position at a private company. It is also a herculean task nowadays to recruit new and relevant talent who will actually help grow the business. Discovering and retaining talented and skilled accountants is a great task as they need to be offered both growth opportunities as well as rewards for their willingness to adapt and bring long-term success.
2. Client Acquisition
In recent times, many accounting firms and CPAs have lamented on the fact that new client acquisition is becoming harder and requires more focus and hard work, while retention of existing clients gradually became the secondary objective. However, this is a good sign that the accounting industry has coped well with the great recession of 2009 and is now more focused to bring in new clients. But this at the same time, also poses great challenges for CPAs as they now have to prioritize both aspects equally.
3. Fraud Control
Currently, all financial activities are monitored and scrutinized by the government agencies as well as the clients to weed out any discrepancies and fraudulent practices. This has given rise to the demand for forensic accountants, who were generally consulted after an accounting malpractice was committed, but now organizations and accounting firms both seek their consultation to prevent fraudulent practices even before they occur. This makes CPAs put more effort into their work and ensure that their services adhere to all industry standards, guidelines, and rules.
4. Improper Utilization of Technology
Technology and its relentless advancement have also created many new challenges for established CPAs. Many of them are not technologically savvy enough to properly implement related technological advancements like cloud accounting , process automation, etc. If utilized properly, technology can offer huge benefits for both CPAs and their clients, but at the same time it also drives the CPAs fees down for competitive effectiveness in the industry, which is again a great challenge for them, as they now have to come up with add-on services to compliment and justify their fee.
5. Increased Expectations
With all the changes in the accounting industry, CPAs are now expected to step out of their pre-defined roles and act as both business consultants as well as financial overseers. Traditional accounting services and practices have become almost obsolete when compared to the current corporate and business trends and thus CPAs now have to re-think their services and roles to stay relevant in this highly competitive industry.
These are only but a few of the many challenges that CPAs and accounting firms have to face nowadays. But the sign of a skilled accountant or an outstanding accounting firm is their ability to take these challenges head-on to adapt and work-around them without breaking any rules or cutting corners on pre-determined guidelines. And it is this ability to adapt and overcome that makes CPAs highly relevant and an absolute necessity for businesses of all size and structure.