The COVID pandemic has influenced the lives of all of us irrespective of industry or occupation. Medicine workers were overwhelmed. Tech companies had to speedily offer innovative solutions to keep the boat afloat. Transport and tourism lay in shatters. Interestingly some people consider local accounting firms to have been immune to any pandemic difficulties. Sadly, this could not be further from the truth.
Here are the top three issues which small business accountants have as a direct result of the pandemic:
Sustaining, Updating And Growing The Accounting Practice
Even in normal market circumstances sustaining an accounting firm may be challenging. What accountants need to do is constantly upgrade their tax knowledge base, take care of routine business, manage employees, fight off competition, manage to price, … and yes – find new business. Luckily, losing clients used to be rare for accountants. But that was prior to COVID.
The pandemic had a different impact on different industries. Some small and medium businesses were fully devastated and went under. Guess what happened to the accounting firms who were servicing them. Losing clients is no longer rare for accounting companies. Pure sustainability becomes a difficult burden.
Finding, Recruiting And Keeping Talent
Having managed to survive, accounting firms face a new challenge – how to attract and keep talent? This talent used to be “nice to have” prior to the pandemic. Today, with markets following the US “big resignation” finding, recruiting and keeping talent has become a challenge. Business Insider reports that as much as 60% of Australia’s knowledge workers are ready to resign in 2022! The market is no longer the market of the employer. Today the employees have the leverage.
If finding and keeping talent is an issue, what will happen with all of the remaining staff? Yeah, right – burnout. This used to be the territory of brokers of financial assets and bankers. But with overwhelming work, caused by pandemic bottlenecks, burnout and low morale become common in the world of accounting and tax advice.
Digitalization, Automation & AI
If the “great resignation” following the pandemic is coming around and burnout is wrecking accountants the only solution seems to be the digitalization of more routine accounting tasks. Most business accountants and tax accountants have embraced the idea of full automation of their operations. Many are considering even embracing AI and machine learning in order to streamline their processes. The issues here are two. The first is finding the right tech solutions for the job. And the second – by going for full automation eventually rendering the whole accounting business obsolete. This may be as little as a decade away.
Following All Changes In Tax And Accounting Legislation
Financial Reporting And COVID Incentives
Being up to date with accounting and tax legislation was a burden even before the pandemic. What COVID brought were many Government benefits and incentives. Of course, all of these were greatly beneficial to businesses and individuals. However, for accountants, it just made the challenge of keeping abreast with legislation even more burdensome.
In the 2021-2022 Budget the Australian Treasury has provided a new AUD 41 billion stimulus package for “direct economic support”. With these, the total amount allocated to this endeavour from the beginning of the pandemic in 2020 exceeds AUD 291 billion. You probably see where this is heading. This support will require, as it always has, new financial reporting in order for beneficiaries to access their stimulus support. Accounting firms now not only have to provide management reporting for their clients but must provide whatever stimulus-related financial reporting is necessary.
New Accounting Standards, Tax Law Changes And Regulatory Changes
If stimulus reporting was not enough, new accounting standards, tax law changes and regulatory requirements all faced business and tax accountants. 2021 was a turbulent year, and 2022 promises even to exceed this. The new Australian Accounting Standards had a launch date of December 12, 2021. This, of course, means that 2022 will be a challenging year for all accountant experts with the new AAS in place.
Anticipating Changes And Being Prepared – Payroll Changes Coming Up
If all of the accounting, tax, regulatory and reporting changes were not enough, accountants now need to be prepared even for the changes which are already in the pipeline to come in 2022 and 2023. All Australian states and territories have introduced various payroll tax methods to support businesses hit by the pandemic.
This would mean that if your enterprise is operating in Melbourne, it would be best to use a local Melbourne accountant. This, of course, is yet another issue for the sustainability of accounting and tax businesses. They will either have to focus on a niche market or risk sustainability. Or they have to embrace multiplying the tax and legislation changes by the number of states and territories.
Keeping Up With All Tech Changes
If the above two big issues for accounting and tax businesses may be said to be in their, more or less, standard field of play, technology is an entirely new ball game. Up until just a few years ago having an off-the-shelf accounting program and a copy of Microsoft Office used to suffice for many an accountant. This is no longer the case. Accountants are pushed to accept technology changes at a pace never before experienced.
With an abundance of accounting apps and software solutions available for small businesses, especially bookkeeping and accounting firms, the challenge is figuring out which platforms best suit your needs
Cloud, AI, Cyber Security, Etc.
Working on the office server is no longer feasible. These days all, including accounting businesses, have to move to the cloud. Hardware is no longer purchased but received as a service (IaaS or infrastructure as a service). Storage, backup and disaster recovery are all in the cloud. Communication with clients is also achieved with cloud tools and platforms. If your accounting business is not yet cloud-based, you may as well just close shop.
… and the cloud is just but one of the many new technology solutions which have somehow grown on accounting firms.
Being an accountant used to be a cliché number cruncher in an overcrowded office. This is again old news. Knowledge workers (as the ones employed in accounting firms) demand to work remotely and with the overhanging “big resignations” employers need to comply. Now they face yet more IT and security issues.
Obviously, the tax and accounting businesses have not been spared from the various kinds of burdens brought about by the pandemic. What we can hope for is for the industry to survive and turn a new page in its development.