Top Challenges Accounting Firms Face – Blog Series Part 2 – Keeping up With Tech and Trends

An enormous technological revolution in the past few years has impacted various business operations. In today’s ever-evolving landscape, technology is transforming the way of doing accounting business. Now, you don’t need a pen or paper to do calculations and fill out forms; you just need to adopt the right technology and tools to get work done.

Technological advancement in any sector, whether accounting or other, comes with various challenges; to overcome those, you should know about them.

In the first blog of the series “Top Challenges Accounting Firms Face,” Ace Cloud covered why burnout impacts accounting firms and how they can tackle it.

Today, in this second blog post, we will explore the challenges accountants face while adopting new technology trends and how they can overcome them to succeed in this ever-changing landscape.

How Has Technology Revolutionized Finance and Accounting?

• 83% of accountants believe that keeping up with the pace of technology adoption is necessary to gain a competitive edge in the market. (Sage’s survey)
• 91% of accountants have reported that using accounting technology has significantly increased their productivity. (Sage’s survey)

Technology has changed how we conduct business meetings and transformed the data-handling tasks we used to perform in the finance and accounting industry. The technological revolution, such as cloud-based accounting systems, has brought substantial advancements in the accounting field, making it more efficient, accurate, and accessible.

Technology has revolutionized the finance and accounting sector for the better, but it has also come up with significant challenges, and to overcome them, you should first know which obstacles can hamper your overall work and productivity.

Major Challenges Accounting Firms Facing in Staying Up with Tech and Trends and Their Solution

Overcoming Resistance to Change

One of the biggest hurdles for accounting firms is overcoming resistance to change. Many employees may feel comfortable following traditional methods and hesitant to adopt new technologies or methods. Moreover, it has been seen that most old-age accountants prefer sticking with traditional techniques because they’re used to them and find them more comfortable than trying out new technologies.

However, adopting change is crucial for staying ahead in today’s competitive world. By promoting employee training, open communication, and highlighting the benefits of new technologies, accounting firms can help their teams overcome resistance challenges.

Automation and Accounting Software

Accounting firms have always struggled with manual tasks such as invoicing and project management, which lead to loss of billable hours and employee productivity. Manual tasks also present the risk of errors, mismanagement, and repetition of work.

Accounting software and automation tools are making it easier for accountants to automate such routine tasks, streamline the accounting process, and reduce manual intervention and costs.

However, technological advancements demand continuous learning and upskilling of accounting professionals. Adopting automation can simplify complex finance tasks but requires financial investments to ensure successful implementation.

Data Security and Privacy

Accounting and CPA firms handle sensitive client information, including names, identification documents, and bank account information, making them prime targets for cyberattacks.

As of 2023, over 72 percent of businesses worldwide were affected by ransomware attacks, according to a report from Statista.

Source: Statista

It shows how crucial it is for businesses to safeguard themselves from data breaches and cyber-attacks. Data security and privacy are the primary challenges for accounting firms seeking to adapt to new technologies and trends.

When companies integrate various accounting tools and platforms into their operations, they face the challenge of handling increasingly sensitive financial data. Ensuring robust security measures becomes more crucial to fight against cyber threats, unauthorized access, and potential breaches.

Moreover, compliance with strict regulatory frameworks such as CCPA and GDPR adds another complexity layer, demanding attention to handling data more securely. Keeping data security and privacy as primary concerns can help accounting firms navigate challenges posed by advancing technologies.

Systems Integration

Accounting processes involve integrating multiple software to complete tasks such as bookkeeping, payroll, and tax preparation. However, these integrations may not always work effectively with each other, resulting in data discrepancies and inefficiencies.

Attaining seamless integration requires careful planning, investment in adopting compatible technologies, and employee training to bring them on the same page.

Accounting firms should adopt the right tools that have integrations with other business applications.

For example, cloud-based QuickBooks supports integration with 200+ apps, giving you a workspace where you can have all apps in one place and run your business seamlessly.

These tools and technologies should meet future performance, reusability, and scalability requirements. This can help firms address the challenges, offering improved data accuracy and enhanced collaboration.

Adopting New Regulations and Norms

New regulations and norms come into existence whenever any law or rules get released in the financial sector. Moreover, modifications to existing processes, workflows, and software systems are necessary to comply with new regulations, and this ultimately comes with challenges as accountants need to update and upgrade their plans accordingly.

Accounting firms must focus on continuous learning and development so that their teams stay updated with the latest regulatory requirements and best practices. Following this can help you overcome this challenge.

Top Technology Trends Followed by Accounting Firms In 2024

Here are some 2024 technological trends that will shape the future of the accounting industry:

Artificial Intelligence

Most accounting executives (80%) believe AI can provide a competitive advantage, while 79% believe it can increase company productivity. (Journal of Accountancy)

Artificial Intelligence is transforming the way financial data is processed, analyzed, and reported. From data entry to financial analysis, AI automation can streamline processes and allow accountants to focus more on strategic work. Additionally, you can use AI-powered analytics tools to provide in-depth insights into financial data, allowing accountants to make the right decisions.

Cloud Computing

As per the Verified Market Reports, The Cloud Accounting Software market will reach an evaluated valuation of $4320 million in 2024.

Instead of relying on traditional on-premises software, cloud computing allows firms to access their data and applications from anywhere, anytime via the Internet. Cloud-based accounting solutions also offer scalability, allowing firms to modify their computing resources based on their needs. Moreover, with this technology, you can increase efficiency and improve productivity with real-time collaboration among team members.

Big Data

97.2% of enterprises are actively investing in big data and Artificial Intelligence. (G2)

With Big Data, a vast amount of information that previously was unimaginable can be analyzed. It allows accountants to make more informed decisions, recognize trends, and discover insights that drive business strategies. Additionally, with big data analytics tools, accounting firms can simplify processes, improve accuracy, and deliver more value-added services to their clients.

Wrapping Up

The rapid pace of technological evolution creates a gap between traditional practices and modern tools, leading to an increased scope of challenges accountants face. Moreover, accounting firms also face substantial challenges in adopting technological advances and emerging trends.

However, by promoting a culture of innovation, investing in training and workshops can help accountants upgrade their technological skills and achieve success in the dynamic business environment.

In the next article in our series, we will explore the problems accounting firms face while moving to advisory roles and how they can succeed.