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Did you know the accounting services industry has been growing by over 3% per year since 2017? In 2022, IBISWorld, an industry research company, forecasts a 6.3% growth.
If you run an accounting practice, this is good news. Strong industry growth means your firm has a good chance of increasing its revenues.
However, it’s not all rosy. There are various challenges the accounting industry faces as a whole. Accounting firms have to find solutions to these challenges if they’re to thrive.
In this article, we’re digging into some of the biggest challenges and telling you what you can do to overcome them.
Loosen up your tie and read on!
1. Remote Workforce Management
Traditionally, accounting firms have always required their employees to work from the office. However, when the COVID-19 pandemic hit, many firms had no choice but to allow and facilitate remote work for their employees. Although the pandemic is easing and people are returning to the office, an overwhelming number of workers want to stay remote.
This presents a big challenge for accounting firms. Managing a remote workforce isn’t as easy as it sounds on paper. Enforcing organizational policies and maintaining workplace culture can be difficult. And without up-close supervision, productivity can take a nosedive.
With time, organizations will obviously get better at managing remote teams. For now, however, having the right technology tools for working remotely and hiring an experienced remote team manager will go a long way.
You can also introduce a hybrid work model. This allows your employees to come to the office a few days a week.
2. A Competitive Market
The accounting services industry is on a growth path, yes, but competition is also getting fiercer. The big firms dominate most markets. Plus, many businesses are opting for accounting software instead of hiring accounting firms.
How can your accounting business stay afloat in such a competitive market?
One, you need a proper online marketing strategy that will make your firm stand out from the crowd. Hire professional marketers to do this for you.
Two, ensure you’re offering your clients the best possible experience. For instance, do you have a portal that enables clients to keep track of their projects? If not, check out this accounting client portal software.
Three, consider specializing your practice. You might think offering a wide range of accounting services exposes your firm to a broader market, but that’s not quite the case. Most clients are looking for specialized providers.
3. A Thin Labor Market
There’s a shrinking supply of accountants in the labor market. In 2021, there was a 17% drop in the number of employed accountants. This mostly arises from the fact that the number of accounting graduates has been on the decline.
Yet, running an accounting business requires you to have a strong team of bookkeepers, CPAs, and auditors. In a thin labor market, only firms with a strong-employer brand are able to attract and retain the best talent.
As such, take steps to build your reputation as an employer. Besides offering attractive compensation packages, build a positive workplace culture.
Don’t Let Accounting Industry Challenges Bring Your Firm Down
You’ve made a smart decision to open an accounting practice. However, your biggest task is to build it into a thriving firm. There are many challenges that await you in the accounting industry, but you can overcome them.
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