After a rather tough 2020 for everyone, some businesses and industries are still not out of the woods quite yet. Here are some tough challenges that accountants will be faced with this year and how they can tackle them.
Managing cash flow
Whenever there’s an economic downfall, or signs of one looming, businesses will implement cost containment and defer any of their planned investments.
This means that the cash flow between companies will differ massively, causing accountants to try to pick up the pieces and make fast calculations.
With this, accountants and their firms should be regularly checking the stock market and getting daily insights to how the cash flow is moving. This way, they can keep ahead of the movement and predict when they might be expected to take on more work so that they can be prepared for it.
Firms should also consider investing in professional indemnity insurance in the event a breach should happen, as this will reduce the amount of risk unto them.
Hiring and retaining staff
Although there might be demand for accountants, it can be hard for accountancy firms to take on new workers as they might be afraid that they’ll have to let them go if things were to take a turn for the worst.
If, suddenly, there is a decline in the need for accountants, firms will have no choice put to release some of these staff members to keep their own cash flow and revenue positive.
To avoid this, accountancy firms should only hire when they really need to and aim to only hire one or two employees at a time. These employees will need to feel valued and secure within the company, so they should be protected from any budget cuts and any downsizing of the company should be done fairly based on skill, rather than on a ‘last in, first out’ method.
Automation
As we move into an ever increasingly digital world, accountancy jobs are becoming automatised with the help of artificial intelligence and appropriate software. One in five law firms have indicated that they plan on using AI and automated software to take on a few of the labour-intensive tasks and deliver more accurate data and insights.
This could result in some people within the firm, such as typists and admin workers, having no real purpose in the workplace any more as their job can be done much quicker and much more efficiently by a computer database.
To offset this, accountants will need to develop their skills to apply their expert knowledge with the data that has been found from these new methods. They’ll also need to familiarise themselves with this new accounting software as well as some data analytics so that they can win over clients and build on what they are already providing.
Cybersecurity
As more things become digitalised and more reports are being shared online rather than as paper documents, the risk of this information getting into the wrong hands or being ‘leaked’ becomes increased.
Without cybersecurity, businesses can have their personal data breached and accessed by unlawful parties and it can cause damage to not only the client but the business, too. Accounting firms that do have a security breach will be less trusted by future clients to keep their information safe.
For accounting firms to avoid this, they will need to have a strong and secure network as well as performing regular testing against their employees to see how they respond to things like phishing emails and whether they can spot a data breach.
Employees who work from home and not on the office network should be encouraged to use a VPN so that their activity cant be traced or tampered with by unruly sources.
