1. Changing accounting principles and taxation policies
Regulations related to accounting, legal matters, and taxation vary from
country to country and proper understanding of these can often affect the
profitability of a company operating in different geographies. Frequent
changes to the tax regulations and financial reporting requirements presents
further complications. The need for accountants to keep themselves up to date
is greater than ever.
There is no universally accepted reporting standard, varying from IFRS, SFRS,
US GAAP to Ind-AS, to name a few. And changes in accounting principles can
impact global businesses in a large way. The following shows how some players
in business were affected by the convergence of accounting standards
International Financial Reporting Standards (IFRS) and the US Generally
Accepted Accounting Principles (GAAP).
- Accounting Executives – accounting professionals are required to learn the new internationally accepted standards to ensure accuracy and consistency in accounting practices
- Corporate Management – due to streamlined standards, corporate management will be able to raise capital at lower interest rates and risk
- Stock Market – there will likely be more global investment opportunities due to reduction in costs associated with foreign exchanges
2. INTEGRATING NEW TECHNOLOGY
As artificial intelligence, blockchain, and mobile finance and accounting
continue to evolve, great opportunities are presented for the accounting
industry. Automation and improved analytics will not only change the way
accountants perform their roles, but also how small- and medium-sized firms
can compete in new and different markets. However, it is sometimes difficult
to understand the real-world implications of things like blockchain or get
clients onboard with new technologies.
3. Tracking expense accounts
Expenses are the costs incurred to generate revenue. Expense accounts can be
difficult to manage, ranging from cost of goods sold, salary, delivery
expense, rent expense, advertising expense, depreciation expense, bank service
charge, repair and maintenance, supplies expense, license fees and taxes,
telecommunications expenses, and training and development.
Advanced accounting software programs provide options to create expense
categories, track expenses and link them to line items on your tax forms.
These programs reduce time spend on tax return preparation and can be used to
generate profit-and-loss statements.
4. Managing the accounting process
Managing sustainability issues can contribute towards the long-term success of
companies. Yet, addressing these issues poses various challenges to managers,
who may struggle to develop an understanding of the linkages between
sustainability management and financial performance.
From a business perspective, accounting for sustainability gives organizations
a competitive advantage and boosts their reputation, helping them have an edge
over the competition by differentiating the services they can bring to the
table.
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