Accounting is an integral part of running a business. Without the accounting function, businesses will not be able to track and trace the company's financial stature, will not have access to sufficient data to make analysis and sound decisions and will not be able to confirm irregularities and course correct the actions. Therefore, accounting is a must for all businesses to realize all the business goals.
Accounting can be broadly defined as the process of recording all financial transactions on business operations. The accounting process involves analyzing and reporting the financial transactions, which provide appropriate oversight to company management, Government agencies, financial regulators, and tax collection departments. The main stakeholders involving the accounting process are:
- Company Finance Manager
- Government Accountant
- Certified Public Accountant (CPA)/Chartered Accountant
- Internal & External Auditors
- Accounts Payable Specialist
- Tax Accountant
- Forensic Accountant
- Public Accountant
- Budget Analyst
Challenges Face by Accounting Professionals in the UAE
As with other contemporary professions, accounting professionals also face challenges daily on many fronts. The following are a few of the challenges faced by accounting professionals:
Changes in Tax Law
Frequent changes in tax laws are a general concern for accounting teams. The accounting team should be up to date with all the recent changes. The tax changes can involve especially understanding total tax liability and shifting trade and tariff policies across products. Effectively understanding and navigating the changes can help companies allocate more funds to weather any other business challenges ahead.
Regulatory Changes & New Accounting Standards
Accounting teams are required to maintain good practice throughout. It will help the company during the internal and external audits. The more organized records will lead to hassle-free audits. It is pivotal for the accounting department to date on day-to-day changes in the Accounting and Auditing standards (can be IFRS and ISA).
Technology is an instrument with transformation potential, and it can empower and become a powerful force multiplier by automating processes and cost-effectively obtaining efficiency. The accounting department must be aware of the latest accounting tools like SAP, Oracle, and Spreadsheets used for error-free accounting. A certain level of proficiency can help leverage these tools for great results. Digitized, organized, and easy-to-access records with accounting software will make a complex tax year more manageable.
Accounting professionals should be familiar with the advanced features—like data analytics and forecasting provided by the latest Accounting Software to better interpret and translate the increasingly complex data into meaningful, actionable advice. Failing to understand and adapt to these technologies can result in accountants staying behind while the world moves forward.
Accountants have ample opportunities to leverage additional information and data analytics with their customers. It is reinforced again by the Journal of Accountancy which predicts that accountants who ignore data analytics may be forced out of their business in the longer run. Data analytics is a sophisticated process of gathering and analyzing raw data and using it to make better decisions.
The prevailing problem is many accountants are not trained in data analytics. The regular training and experience have strictly focused on increasing the technical expertise in accounting rather than data analytics. Accountants and CPAs must upskill as there is more data available from various sources than ever before.
An eye for detail is one of the essential traits that need to be developed by accounting professionals. If an accounting professional does not possess the ability for details, it is imperative to develop a habit – to pore over details with enough patience and deep concentration for a detail-oriented approach.
A missed deadline date can result in strict actions to be borne by the clients. In addition, frequently missed deadlines may lose customers and negatively impact the client's revenue, which is not set out to be achieved as an accountant. Therefore, it is vital to understand and upskill to avoid delays and never miss deadlines.
Commoditization of Accounting Services
With the recent interest in DIY tax and accounting software and related automation, entrepreneurs and companies now look at tax and bookkeeping services as a commodity. Customers demand low prices as they don't understand the value their accountants provide. The approach is such that tax returns and audits are considered additional costs of doing business which has led to opting for the least expensive options instead of a wholesome approach to avail long term benefits. To avoid these scenarios, the accountants must take advantage of technology to automate work, collect data and provide necessary analytical insights to their customers.
Jaxa Chartered Accountants are experienced financial consultants with offices all over the UAE. Our clientele includes many local and international companies operating in various industries across the UAE. Our services include bookkeeping, accounting, auditing and tax-related filing etc. Please Contact Us for any queries regarding our services. We'd be happy to help!