Accountants and company executives of My Tax Team are still assessing the tax cuts and products and the best ways to maximize their client advantages. In the upcoming year, all firms will encounter similar accounting issues. If you manage any of these challenges improperly, — Your firm will lose money if, for example, you forget to claim a deduction at tax time, leave your data open to hackers, or employ the wrong accounting software. Additionally, if your company loses money, it will collapse.
You may reduce the risk these problems offer to your company and obtain a competitive edge by researching and preparing.
The Four Most Significant Issues Faced by CPA Firms Today
Here are the four main accounting issues faced by accounting services companies, along with solutions you can use to ensure your company is successful in 2022.
Tax Deductions:
While meals linked to business are still deductible, entertainment costs (such as tickets to athletic events or concerts) are no longer. Bonus depreciation lets companies immediately deduct all depreciation on company assets like cars, computers, and other equipment for the following three years (through 2022). The cash method of accounting, which is frequently more accessible and less expensive than accrual accounting, is now available to a lot more small firms (those with annual gross sales of $25 million or less as opposed to the last criterion of $5 million or less).
The Answer: Make sure your accounting software is kept up to date each month to handle the laborious work of calculating your new tax cut rates and deductions for you. Additionally, even though it has nothing to do with the tax cuts, be sure to account for virtual currencies in your tax preparation preparations if your company or clients do.
Automation and A. I are replacing more Traditional Accounting Tasks.
Do not worry; robots will not replace you in your position. However, A.I. is getting more and better at complicated accounting tasks like assembling transactions into financial statements and tax reports. In fact, according to Gartner, integrating robotic process automation may prevent up to 25,000 hours of unnecessary rework per year for a team of 40 accountants. It improves engagement and lowers worker turnover while freeing time for higher-value tasks like analysis and forecasting.
On the one hand, automation can help you cross off tiresome tasks from your lengthy to-do list. On the other hand, you need to be aware of whether your position will replace that of a phone switchboard operator.
The Answer: Consider automating repetitive processes (such as payroll and tax form processing) as a growth opportunity rather than a problem. Accounting automation is available to make your work more productive. Consider how it can help you save time to concentrate on strategic, non-repetitive duties like financial planning and analysis or financial risk management.
Accountants Must Broaden their Skill Sets.
The necessity for conventional, rule-based accounting abilities is declining while the demand for financial analysis and planning is rising. You’d need to employ some robust analytics tools if you didn’t major in financial forecasting or risk analysis in college to assist you in giving valuable information.
The answer: Learn as much as possible about the sophisticated capabilities that your accounting software offers, like forecasting and analytics, to analyze better and convert the ever-deeper data it gives into helpful guidance. According to different CPAs, accountants may start giving more strategic advice to their clients by simply surveying them about their challenges and company objectives, then delving into the data to uncover ideas on how to help them.
Cybersecurity is Getting More Attention.
According to CPAs, global investment in information security will top $124 billion in 2019. As a business owner or accounting professional, you must secure all of the data in your system, including that of your clients, workers, and service providers. This obligation extends well beyond the boundaries of only the data belonging to your organization.
The Answer: To keep data as safe as possible, Sage advises accounting professionals to adopt the following recommendations:
Whenever you receive a reminder to do so, update your accounting software immediately (these updates typically patch security vulnerabilities and add features).
Limit user access to authorized users exclusively for specific data and systems.
Transfer all data to the cloud for tax preparation. Contrary to popular belief, the cloud is already considerably more secure than conventional data centers, according to Gartner.
Bottom Line:
Accounting professionals in My Tax Team will be thinking about A.I. and cybersecurity as 2023 approaches, but traditional concerns like long hours and continuously changing tax rules won’t go away either. The trick is to be ready. Knowing what you’re up against before it becomes a problem can give you an advantage when dealing with it afterward.
