Biggest challenges in accounting industry in 2023

Post Covid19 pandemic and induction of work-from-home culture: like every other industry, the accounting industry has changed dramatically because of technological advances and compliance requirements. Understanding the biggest challenges in accounting can help you overcome obstacles as an entrepreneur and as an accountant.

Work From Home or Work from Office?

After COVID, the preference comparison in the corporate world is work from the office or work from home. Which environment gives more potential to the worker is one of the major facts in this analysis for every employer. Employees may have their own reasons for preferring both. Both methods have their merits and demerits. I personally prefer a balance between both methods as an employer. You have to choose wisely based on the requirements to get better results.

Online or Offline software?

I believe that there is no need for a discussion regarding manual accounting or computerised accounting this time. It's time to discuss what kind of computerised accounting is suitable for you. The selection is based on your reporting requirements, geographical locations, and budget. Most of the online software is user-friendly, but the cost is comparatively high as they charge per user per month or annually. In order to build a career in accounting, understanding various online and offline software programmes is crucial.

Data Storage & Security

As like we say in auditing, there should be a reasonable assurance that data is secured; we cannot guarantee 100% data security. We have different data storage options available both in offline and online modes; the choice is, like said earlier, based on individual aspects. Insuring the data assets is vital, considering the cost-benefit analysis. In managing access to data, we have to address both physical and logical access and access control mechanisms.

Audit Trails Applicability

The MCA, vide its notification dated March 24, 2021, introduced the concept of audit trails by inserting a proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014. Every company that uses accounting software for maintaining its books of account shall use only such accounting software that has the feature of recording an audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made, and ensuring that the audit trail cannot be disabled." After 2 years of deferment, with effect from April 1, 2023, all accounting software used by Indian Companies must have an audit trail feature. Various challenges such as location and volume needed for storage, access controls, storage and deletion timelines, and storage cost issues.

Qualified & Trained Manpower

The biggest hurdle is the lack of training facilities and academic courses. Ind AS (Indian Accounting Standards), the converged standards for International Financial Reporting Standards (IFRS), were implemented in the accounting year 2016–17. Implementation started in a phased manner, but it is observed that there is a shortage of trained manpower. The Institute of Chartered Accountants of India (ICAI) has started Ind AS as part of its curriculum for its members and students. However, in 2023, there will also be a large gap between the number of trained professionals required and the number of trained professionals available. Universities providing commerce graduation and postgraduate degrees have yet to include these standards in their curricula. These will be one of the major challenges in the coming years when more companies come under Ind As applicability.

Automation and Artificial Intelligence?

With traditional accounting and bookkeeping, mistakes can, and often do, get overlooked.?Artificial intelligence has the ability to learn.?This means it can become aware of how the business operates and then instantly find problems and adjust as necessary to ensure all documents are indeed exactly right. Implementing AI and Automation is a challenge for every enterprise at this time.

Want a Help to solve these challenges?

I believe that Businesses must fluctuate according to the changing conditions in the world of digitization. You can outsource all or most of your finance and accounting functions, so you can focus more on your business and less on your back office. I can help deliver the timely and relevant information you need that can help you make better, faster decisions to make your organisation more profitable and efficient. You can hire a virtual CFO from me who works part-time. Engaging a Virtual CFO with extensive experience in senior corporate finance and compliance roles.

“When you change the way you look at things, the things you look at change.”

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