Accountants face many challenges, and these difficulties are evolving every year. In 2022, there are new obstacles that all financial professionals will encounter and need to overcome to remain profitable and hit growth projections.
The leading accountant challenges this year include:
No. 1 — Lack of IT Knowledge in Accounting
A lack of IT knowledge will continue hampering accounting firm growth, especially due to a shortage of financial professionals. One way to overcome the shortage in talent is through strong IT, such as:
- Tools and processes: If your firm lacks the right tools and processes, you may be doing more work than necessary. Review your current setup and make changes to improve productivity. Small changes, such as using customer relationship management (CRM) software or project management software, can make all the difference.
- Automation: Many processes that you complete can and should be automated. Turn to automation in 2022 to help in various ways, including using dashboards to request files, reminding clients of missing files and notifying you when all information is collected.
If you are like most accountants, you want to spend your time on actual accounting tasks and not IT. Thankfully, you can consult with professionals that will help you update your tools, processes, and automation to streamline as many processes as possible.
No. 2 — Growing Competition With No End in Sight
Competition is growing. Your firm has to stand apart from the competition. A few of the key ways to achieve this goal is to:
Improve your customer experience. Just like in the first section, the right IT can be used to create workflows and processes that can transform your customer experience.
Focus on response time. Unfortunately, accountants and financial professionals are not always the best communicators. You can change this by responding to questions quickly and reaching out to clients about new changes in laws and regulations or other pertinent information.
Consider becoming a one-stop shop, offering as many in-demand services as your clients demand. If you do not have the capacity to provide these services yourself, you can partner with other companies to help you begin offering them.
You also will want to consider the competition you face when it comes to attracting and retaining top talent. Everyone wants the best talent, so how can you ensure your firm is the place they desire to be?
No. 3 — Shifting Service Demands
Service demands are changing. In fact, 33% of accountants are considering adding in tax advisory services, and many firms are also moving into proactive advisory services.
Bookkeeping and taxes are becoming a commodity.
While these services may be the core of your business operations, it is time to consider branching out into new areas. For example, we are seeing the following proficiencies turning into must-have skills:
- Financial analysis
- Financial forecasting
- Cash flow projection
Advisory services are especially popular, and if you offer these services in conjunction with your current offerings, you can improve client retention, upsell existing clients, and remain competitive.
Convenience remains one of the most crucial aspects of choosing a financial professional. If you do not know what services are in demand among your current clients, look through requests they have made in the past year or two. Are there services that you’re not offering that clients keep requesting? Adding in these services can immediately add revenue to your business and move you closer to a one-stop operation.
If you still are at a loss as to what to add to your services, you can always run a survey and ask current clients what they would like to see added to your offerings.
No. 4 — Rising Data Security Threats
Data security and threats should be a major focus of your business’ operations already due to a rise in ransomware. One firm was hit with two ransomware attacks in a year, and one of the demands was $300,000 to remove the ransomware.
Data breaches can lead to significant damages, and a single breach can greatly harm your firm’s reputation.
If you haven’t already, it is time to begin focusing on cyber security. Working with a security expert is recommended, but a few steps to take today are:
- Storing client data and information in an encrypted database
- Creating strong protocols for opening email links, downloading files and accessing systems
- Creating access control systems to keep client data highly protectedIncorporating routine backup systems that are off-site
- Running audits and penetration tests on your current systems
- And much more…
You are likely not a cyber security expert, so you should work with someone who has experience to harden your current system’s security. Naturally, you shouldn’t trust your firm’s security with a non-security IT professional in your firm.
If you consider the challenges listed above and how to overcome them, you will strengthen your accounting firm going into 2022. Every industry is evolving and changing, and quick adaptation is crucial for accounting firms that want to continue growing in the new year and beyond.
Joseph Graziano, CFP® is VP and Wealth Management Partner at FFP Wealth Management. He and the team at FFP help manage more than $2.4 billion in assets. For the past 28-plus years, FFP Wealth Management has partnered with accountants and financial planners to provide premium services to clients. If you have questions about adding financial planning services to your firm or the challenges above, you can contact Joe here.