4 Accounting Challenges Businesses Often Face
According to a 2017 survey by recruitment firm Robert Half Australia, technology is the single biggest factor that will impact the finance domain now and in the future.
1. CHANGING ACCOUNTING PRINCIPLES AND TAXATION POLICIES
Regulations related to accounting, legal matters, and taxation vary from country to country and proper understanding of these can often affect the profitability of a company operating in different geographies. Frequent changes to the tax regulations and financial reporting requirements presents further complications. The need for accountants to keep themselves up to date is greater than ever.
There is no universally accepted reporting standard, varying from IFRS, SFRS, US GAAP to Ind-AS, to name a few. And changes in accounting principles can impact global businesses in a large way. The following shows how some players in business were affected by the convergence of accounting standards International Financial Reporting Standards (IFRS) and the US Generally Accepted Accounting Principles (GAAP).
- Accounting Executives – accounting professionals are required to learn the new internationally accepted standards to ensure accuracy and consistency in accounting practices
- Corporate Management – due to streamlined standards, corporate management will be able to raise capital at lower interest rates and risk
- Stock Market – there will likely be more global investment opportunities due to reduction in costs associated with foreign exchanges
2. INTEGRATING NEW TECHNOLOGY
As artificial intelligence, blockchain, and mobile finance and accounting continue to evolve, great opportunities are presented for the accounting industry. Automation and improved analytics will not only change the way accountants perform their roles, but also how small- and medium-sized firms can compete in new and different markets. However, it is sometimes difficult to understand the real-world implications of things like blockchain or get clients onboard with new technologies. Check out this article by CEO Ragu Bhargava to learn more about technology’s role in finance and accounting.
3. TRACKING EXPENSE ACCOUNTS
Expenses are the costs incurred to generate revenue. Expense accounts can be difficult to manage, ranging from cost of goods sold, salary, delivery expense, rent expense, advertising expense, depreciation expense, bank service charge, repair and maintenance, supplies expense, license fees and taxes, telecommunications expenses, and training and development.
Advanced accounting software programs provide options to create expense categories, track expenses and link them to line items on your tax forms. These programs reduce time spend on tax return preparation and can be used to generate profit-and-loss statements.
4. MANAGING THE ACCOUNTING PROCESS
Managing sustainability issues can contribute towards the long-term success of companies. Yet, addressing these issues poses various challenges to managers, who may struggle to develop an understanding of the linkages between sustainability management and financial performance.
From a business perspective, accounting for sustainability gives organizations a competitive advantage and boosts their reputation, helping them have an edge over the competition by differentiating the services they can bring to the table.
Are you seeking assistance to ensure a seamless accounting process? Get in touch with our consultants who have in-depth knowledge and expertise in global accounting and can help you overcome the accounting challenges. Send us an email firstname.lastname@example.org or dial +1-408-913-9130 for more info.