The 6 Biggest Challenges Facing the

Accounting Profession Today and How to

Solve Them
In late 2017, the Tax Cuts and Jobs Act (TCJA) passed. As of early 2019, the
Internal Revenue Service is still working on implementing the reform. The IRS
website ominously informs us that, “This major tax legislation will affect
individuals, businesses, tax exempt and government entities.”

Trying to determine exactly how the TCJA will affect small businesses like
yours is one of the biggest challenges facing the accounting profession today.

If you mishandle these challenges—for example, missing a deduction at tax

time, leaving your data vulnerable to hackers, or failing to use the right
accounting software—you’re causing your business to lose money. And if your
business is losing money, your business is headed for failure.
 The bad news: Navigating the Tax Cuts and Jobs Act is far from the only
challenge small-business accounting professionals will face in 2019.
The good news: All small-business accounting professionals will face
similar challenges in 2019, and by educating yourself and preparing to face
those challenges ahead of time, you can help minimize their negative impact
on your small business.

And, as G.I. Joe taught us, knowing is half the battle.

The biggest challenges facing accountants in 2019

Heading into 2019, the accounting profession faces some new challenges (the
increasing viability of AI and automation and new cybersecurity threats) and
some old ones (long hours and evolving laws and regulations).

But regardless of the challenges you come across in 2019, preparedness is

key. If you know what you’re up against before it becomes an issue, you’ll
have a head start on knowing how to respond.
Here are the 6 biggest challenges facing the accounting profession today, along with actions to
take to ensure the success of your small business in 2019:

1. The Tax Cuts and Jobs Act will change many things
2. Accounting duties are becoming more automated
3. Your responsibilities are ever-changing
4. There are still only 24 hours in the day
5. Cybersecurity is becoming a bigger threat
6. Small businesses are over-reliant on accounting software

1. The Tax Cuts and Jobs Act will change many things
Just when it seems like you have everything down, a new tax law or regulation
comes along to complicate things; it may seem like half of your time is spent
trying to keep up with all the new regulations.

The Tax Cuts and Jobs Act is shaping up to be the granddaddy of tax reforms,
and it will affect everything from meals and entertainment expenses to
depreciation. Unless you’re really, really into this kind of stuff, I would
recommend against attempting to read the entire, arcane, 186-page document
(though it is publicly accessible for anyone with a lot of time on their hands).
 An excerpt from the complete Tax Cuts and Jobs Act (Source)

A more palatable exercise would be to skim through this 86-page section-by-

section summary published by the Committee on Ways and Means.

Here are some of the biggest takeaways of the Tax Cuts and Jobs Act for
small businesses:

 Entertainment expenses (such as a sporting event or concert) are no

longer deductible, though business-related meals are still deductible.
 Pass-through entities (most small businesses are considered pass-
through entities, including S corporations and LLCs) can now deduct up
to 20% of qualified business income.
 Bonus depreciation allows businesses to deduct 100% of the
depreciation on business assets such as vehicles, computers, and other
equipment right away for the next three years.
  There is a new tax credit for employers that offer paid family and
medical leave to their employees.
 Many more small businesses (those with $25 million or less in annual
gross receipts instead of the old $5 million or less) are eligible to use
the cash method of accounting, which is typically simpler and less
expensive than accrual accounting.

The solution: Though it pays to know about the major changes that the Tax
Cuts and Jobs Act brings, the good news is that your accounting and tax
software will handle all of the new rates for you. In other words, you don’t
have to worry about whether you’re getting the full advantage of bonus
depreciation or if you’re getting a tax credit for offering paid family and medical
leave as long as you report your tax information accurately.

Still, knowing about these advantages can help small-business accounting

professionals with strategy and planning. Read up on the Tax Cuts and Jobs
Act and think of ways that your business can take advantage, such as cutting
down on entertainment expenses, investing in business assets during the next
three years, and offering paid family and medical leave to employees.

2. Accounting duties are becoming more automated

Fear not, robots are not coming to take away your job yet. But AI is becoming
more and more capable of handling complex accounting duties such as
collecting transactions and compiling them into financial statements and tax
returns.

“This is manual work that accountants do right now,” Xero head of accounting
James Solomons told GetApp. “But in the future, automation will complete
these components based on machine learning and AI.”

On one level, this should be good news: Automation is taking some work off of
your hefty to-do list. On another level, you need to know if your job is headed
the way of the telephone switchboard operator.

The solution: You could look at the fact that automation is taking over
repeatable tasks such as payroll and tax form preparation as a challenge, but
a healthier and more sustainable response is to look at this as an opportunity
for growth.
Humans will still be needed to double-check the work done by automation,
and the best accounting professionals can make themselves invaluable by
evolving into more of an advisory role, helping their businesses properly
implement new accounting automation technology as it becomes more
capable and more complex (which we’ll discuss in the next section).

Accounting automation is here to help you do your job more efficiently. Rather
than looking at it as a threat, think about all the ways it can save you time so
you can focus instead on non-repetitive, strategic tasks such as financial
planning and analysis, and financial risk management.

3. Your responsibilities are ever-changing

Automation and AI are taking over some of the repetitive, rules-based
accounting tasks, and accounting professionals need to take on more
advisory and consulting roles to remain valuable to their business.

It’s great that you’re getting all of your core accounting duties done on time,
but what happens when the CEO asks you to help prepare a forecast for next
quarter, or asks for your analysis on a potential business investment?

Unless you studied financial forecasting and risk analysis in college, you’re
going to need to leverage some powerful analytics tools to help you provide
useful information.

The solution: Advanced accounting software cuts both ways. On one hand,
it will eventually reduce the need for traditional, entry-level accountants. On
the other hand, accounting professionals who master the latest accounting
software will be better equipped to navigate its complexities and interpret the
increasingly deep analytics it provides.

In other words, human accounting professionals will always be needed to

harness the accounting technology of the future and to turn the insights it
provides into actionable advice for decision-makers.

You can prepare yourself for this role by constantly learning about the new
features in your ever-changing accounting software. For example, here is a
guide from Accountex on the new features in QuickBooks for 2019.
4. There are still only 24 hours in the day
Bills have to get paid, invoices have to be sent, and paychecks have to be
issued, no matter how long it takes.

Telling your employees, “Sorry, I didn’t get around to running payroll this week
because I ran out of time” simply isn’t an option. Neither is telling a longtime
service provider that you’ll pay their bill next month when you have more time.

Still, time is a static limitation. You may find yourself working late from time to
time (especially during tax season) to make sure everything gets done, but
you owe it to yourself, your family, and your staff to make sure that isn’t the
norm.

The solution: To save yourself from working 12-hour days and 60-hour
weeks, make sure that you have the right staff in place to back you up and
that you’re using the right technology to make your job easier.

For example, expense management tools with receipt scanning can take on
some of the heavy lifting of expense reimbursements, and accounting
software can automatically compile earnings reports for tax time.

Attaching receipts from your mobile phone in QuickBooks Online (Source)

The Accounting Path recommends the following additional steps to avoid

burnout:

 Get your rest when you can. For example, right after tax season.
 Make sure that you have backup. Even if you rarely need to use it, it’s
vital that you have someone else at your organization that can fill in for
you if needed.
 Be honest about what you can handle. It’s better to hire more staff or
outsource accounting tasks than to try to take on everything yourself
and burn out.

5. Cybersecurity is becoming a bigger threat

Gartner estimates that information security spending will exceed $124 billion
worldwide in 2019.

As a small-business accounting professional, your responsibility to protect

your data goes well beyond the walls of your own company; it also includes
the data for all the other contacts in your system, including for clients,
employees, and service providers.

Accounting information is a hot target for hackers because it can lead to high-
value data such as credit card information and bank account numbers.

The solution: Sage recommends that small-business accounting

professionals abide by the following guidelines to keep data as secure as
possible:

 Always update your accounting software as soon as you get a

notification to do so.
 Restrict user access to only those who are authorized.
 Remove data you no longer need such as a tax return from five years
ago or the financial information of a client you are no longer working
with.
 Move everything to the cloud. It may seem counterintuitive,
but according to Gartner, the cloud is already significantly more secure
than traditional data centers.

6. Small businesses are over-reliant on accounting

software
Accounting software has improved by leaps and bounds since the early days
of the industry when it was basically a dressed-up spreadsheet. But one
impact of high-functioning accounting software is that it could lead small-
business accounting professionals to have a false sense of confidence that
the software has everything under control.

How would you feel if you got on your next flight only to see that the cockpit
was totally empty? Would you take the flight if the flight attendant told you that
the airplane didn’t need a human pilot because it was a self-flying plane?

Similarly, even the most advanced accounting software needs accounting

professionals behind it to double-check the numbers, investigate
abnormalities, and identify trends.

It is vitally important for small-business accounting professionals, especially

those who are learning as they go, to know when to say when and turn to a
professional.
 The solution: Treat your accounting software as a powerful tool that can
help your business in innumerable ways but that requires a learned,
experienced professional behind it. Do not treat your accounting software as a
service that runs the accounting for your business on autopilot.

Some of the biggest accounting platforms offer extensive training options to

help you master your accounting software so that you can feel confident
taking the controls when something goes wrong.

What are the biggest challenges you face as a small-

business accounting professional?
These are the biggest challenges facing small business accounting
professional in 2019 that I’m aware of, but I’d really like to hear the actual
challenges that you face on a daily basis.

Please share them in the comments, hit me up on

Twitter @AndrewJosConrad, or email me at aconrad@capterra.com.

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