All Corporates will face similar accounting challenges in the future years. If you mishandle any of these challenges in the coming years like say, if you miss a deduction at tax time, if you leave your data at risk to hackers, or if you fail to use the right accounting software, then your business will lose money. If your business is losing money, your business is heading towards failure.
Biggest Accounting Challenges for Corporates Today
Let us know some of the top accounting challenges faced by corporates.
1.Changing Accounting Principles and Taxation Policies
All the regulations related to accounting and financial services, legal matters, and taxation differ from country to country, and proper knowledge of these can often influence the profitability of a business operating in different geographies. Regular changes to the tax regulations and financial reporting requirements dispense further complications. The need for chartered accountants to maintain themselves up to date is greater than ever.
Changes in accounting principles can influence global businesses in a large way. The following conveys how some corporate players were affected by the intersection of accounting standards, International Financial Reporting Standards (IFRS), and the Generally Accepted Accounting Principles (GAAP).
- Accounting Executives – Accounting company professionals are needed to learn the new internationally accepted accounting standards to ensure precision and consistency in accounting practices.
- Corporate Management –Corporate management will be able to uplift capital at lower interest rates and risk because of streamlined accounting and financial standards.
- Stock Market – There will mostly be larger global investment opportunities due to the reduction in costs linked with foreign exchanges
2.Integrating New Technology
As Blockchain, Artificial Intelligence, Mobile Finance, and Accounting continue to develop, great opportunities are accorded for the accounting industry. Improved analytics and automation will not only alter the way accountants execute their roles but also how small, and medium-sized firms can lock horns in new and different markets.
However, it is sometimes tough to understand the real-world inferences of things like blockchain or obtain clients on board with new technologies. Automation can take monotonous work off your hefty to-do list.
3.Tracking Expense Accounts
Expenses are the costs sustained to generate revenue. Expense accounts can be tough to manage, ranging from the cost of goods sold, delivery expenses, salary, rent expenses, depreciation expense, advertising expense, bank service charge, supplies expense, repair and maintenance, license fees and taxes, training, and development, and telecommunications expenses.
Advanced accounting software programs offer options to form expense categories, trace expenses, and associate them to line items on your tax forms. These programs minimize time spent on tax return preparation and can be utilized to develop profit-and-loss statements.
4.Managing the Accounting Process
Managing sustainability issues can chip in towards the long-term success of accounting companies. But, addressing these issues creates various challenges to managers, who may toil to develop an understanding of the connections between sustainability management and financial performance.
From a business perspective, accounting for sustainability provides organizations competitive advantage and amplifies their reputation, assisting them having the edge over the competition by converting the services they can bring to the table.
5.Cybersecurity is becoming a bigger priority.
As per the estimates, information security spending has exceeded $124 billion worldwide. Accounting information such as credit card details, bank account numbers, passwords are mainly a top target for hackers as it can be of high-value.
As a corporate leader or accounting professional, your responsibility to secure your data goes well beyond the walls of your own corporate data. This includes the information for all contacts in your system, comprising clients, employees, and service providers.
6.Greater client expectations
Accounting firms were only regarded as service providers earlier, but now, clients view them as consultants as well. They trust to get stellar services and valuable guidance from those accounting firms on how their businesses can grow.
Are you seeking guidance to ensure a seamless accounting process for your corporates? Get in touch with our JAXA experts, who have in-depth knowledge and skill in global accounting, and can assist you in overcoming the accounting challenges.
Contact us – we’d be delighted to help you.