You may decide that you want to open your own firm instead of working for someone else.

Well how do you do that, first you need a lot of patience and determination then go from there.

It may be a great idea to look into a coaching service that could help you and your firm build the company you want. This would help better the experience not only for you but your clients as well. One of the recommended services would be the Practice Forward Membership through Thomas Reuters Tax & Accounting.

“Practice Forward provides proven methodology, guidance, and content solutions that accounting firms need to develop and implement an advisory services approach to engaging clients” (“How to Grow Your Accounting Firm”).

What this looks like:

• communicate your value confidently
• financial growth from payment for your value
• meaningful relationships with clients
• Do not give services away or undervalue them
• you control the firm’s directions and values
• fulfilling work for yourself and your employees if you have them

There are a lot of available resources out there to help you with building your own firm. While a coaching service may be great for some people others may decide they want to do it all by themselves, and that’s ok too.

Tyler S Clark has a really informative YouTube video about starting a firm from scratch. while the content of the video may be helpful keep in mind that it was created in October of 2022 so some things may have changed. You can find that video here, he also provides a few helpful links in his description.

In conclusion, there is no one set way to build your own firm but The Big 4 has a simple starting plan outline, which I provided below (“How to Start an Accounting Firm”). 

Steps to create/build your own Accounting Firm:

• Make a Business Plan
• Find a good Mentor/Advisor who is a CPA
• Identify Client base and target market
• Market yourself and your business
• Figure out the location of your firm
• Chose whether to hire employees or run it yourself
• Stay Ethical

Once you figure those things out you need to consider the cost to open such as supplies, utilities, etc. After that you are ready for business, you may have to change things up and adjust things here and there but that is typical with any business whether it’s new or old.

Good Luck with your new adventure and as always check out the references below for more detailed information.

References:

“How to Grow Your Accounting Firm.” Thomas Reuters Tax & Accounting, tax.thomsonreuters.com/us/en/cs-professional-suite/practice-forward?ef_id=a2beff38e7e416c4024d9a7a00a7291b:G:s&searchid=TRPPCTAX/Microsoft/TaxUS_AV_Advisory_Main_Search_NonBrand-All_US/Start-All&chl=ppc&cid=9035213&sfdccampaignid=7014Q000002SeP8QAK&s_kwcid=AL!7944!10!81776295305583!81776405229976&utm_source=bing&utm_medium=cpc&utm_campaign=TaxUS_AV_Advisory_Main_Search_NonBrand-All_US&utm_term=how%20to%20build%20an%20accounting%20firm&utm_content=Start-All&msclkid=a2beff38e7e416c4024d9a7a00a7291b. Accessed 1 Nov. 2023.

“How to Start an Accounting Firm.” The Big 4 Accounting Firms, 1 Nov. 2023, big4accountingfirms.org/start-your-own-firm/. Accessed 1 Nov. 2023.

Technology is advancing in everything we use and do so it’s only natural for it to expand into better accounting practices. In the past we had to complete all the calculations and reports by hand, very tedious work. Now work that would takes weeks to complete can be done within a few hours with automated systems and AI technology.

“Accounting companies want to stay competitive and must broaden beyond traditional bookkeeping and tax reparation services and offer advisory services”(Scott). Basically, they would advise businesses and individuals on how to best take advantage of technology to better solve problems. This not only helps your clients but allows certified public accountants (CPAs)  to expand their skill sets.

A few other advancements that are helpful to the future of accounting include:

• Cloud Computing
  • instant access to data and computing resources.
  • update information continuously
  • easier to make decisions and analyze data
  • Constant monitoring
• Blockchain Technology
  • ledger tech allows secure, transparent, and tamperproof transactions
  •  provides methods for reconciling accounts and recording cash flow (Scott)

“Accountants require using advanced analytics and forecasting techniques. Data analytics enables identifying operational inefficiencies and management risks” (Scott). Accounting companies however analyze their past to predict their future. Forecasting their future will help accounting firms to plan their future needs and requirements.

With all the advancements made to technology and automation in accounting it does leave one to wonder if the human element of accounting will eventually be obsolete. I personally think that there is always going to be some type of human involvement as technology can easily be hacked or malfunction, unlike a human.

Here are some questions to think about:

• What do you think the future of accounting looks like?
• Do you agree that the human element will always be a factor or do you think we can be replaced?

Reference: 

Scott, Aileen. “What Does the Future of Accounting Look Like?” TechTarget, 14 Feb. 2023, www.datasciencecentral.com/wha t-does-the-future-of-accounting-look-like/. Accessed 31 Oct. 2023.

“In 2023, accounting departments likely will face challenges in four areas: budget uncertainty, creating sound estimates in an uncertain environment, applying new accounting and financial reporting standards to comply with U.S. GAAP, and labor market uncertainty” (Simpson and Orrell). 

Budget Uncertainty:

As with anything it is hard to predict what will happen in the future the same can be said about the volatility of the economy. Right now it is extraordinarily high, but that can change at any given time. Accounting departments need to be able to plan ahead and budget for any possible scenario they could be swept into.

Significant Estimates:

“Cash flow forecasts are a critical input to a variety of a company’s accounting estimates, such as asset impairment assessments, fair value of assets, and going concern analyses” (Simpson and Orrell). Whether or not our economy ends up in a recession will play a big part in how estimates are made. 

New Standards in Accounting and Financial Reporting:

Some of the changes made in recent years were to:

• Revenue recognition
• Lease standards
• Credit losses
• Significant lending activities
• Digital assets

Labor Market Uncertainty:

One of the biggest issues here is finding professionals who fully understand GAAP and can successfully close books and follow financial reporting standards. With the popularity of remote and hybrid jobs increasing, it also makes it difficult to hire professionals at firms.

With all that being said there are still opportunities for growth in Accounting.

“Data continues to be a significant theme for businesses across departments, and many companies are putting significant effort behind identifying valuable data streams and finding ways to harness data. Automating manual processes can reduce inefficiencies and allow workers to spend time on more dynamic, higher-value work – a win-win for employees and companies alike.” (Simpson and Orrell). 

Reference:

Simpson Mandi, and Orrell Kristin. “Challenges And Opportunities For Accounting Departments In 2023.” Forbes, 3 Jan. 2023, www.forbes.com/sites/crowe/2023 /01/03/challenges-and-opportunities-for- accounting-departments-in- 2023/?sh=45618af4575d. Accessed 31 Oct. 2023.

Every year more and more things get added or taken away to our taxes. This causes accountants to be asked to do more than normal, making a difficult balancing act to follow.

The issues that some firms might face could be different from others based on size and demand in their area of operations.

Here are some of the most common issues:

• Regulatory compliance
• Accounting standards
• Strained bandwidth and capabilities
• Shift to remote or hybrid work environments
• Artificial intelligence and up-skilling
• Payroll errors
• Accounting fraud
• Misapplication of GAAP standards
• Financial reporting errors
• Cash flow statement mistakes
• outdated accounting technology

“Firms must have the ability to quickly and efficiently conduct tax research and improve tax reporting efficiencies to stay competitive in today’s complex regulatory environment” (Reuters).  As far as accounting standards things are constantly improving and a few changes were made such as; the revenue recognition standard and the new release accounting standard.

Any issues or challenges/obstacles that an accountant can face can be categorized as an accounting issue. “Accountants can overcome these issues by developing new skills, staying updated on news and trends in the industry, encouraging feedback from colleagues, and taking a flexible approach”(Indeed). 

An issue that I have discovered personally through some of my coursework at Penn State is a mix-up in the numbers. For example, one of the lesson modules may list a limitation amount as 1600 when it is really supposed to be 160,000. So being sure to represent your numbers and commas accurately is very important. It may seem like a trivial thing to mention but I’m sure it has happened more than once, it is easy to make a mistake when in a hurry. So moral of the story slow down and take your time to ensure accuracy.

References:

Indeed, Editorial Team. “12 Common Accounting Issues (Plus Straightforward Solutions).” Indeed, 3 Feb. 2023, www.indeed.com/career-advice/career-development/accounting-issues. Accessed 1 Nov. 2023.

Reuters, Thomas. “Top Accounting Issues in 2023.” Thomas Reuters Tax and Accounting, 18 Apr. 2023, tax.thomsonreuters.com/blog/top-accounting-issues-in-2023/. Accessed 1 Nov. 2023.

There are always some changes in the world of accounting. So it is essential to pay attention and take note of those changes. As technology advances accounting practices must also advance to stay relevant and up to date.

What Are the Top Accounting Trends?

Automation:

There has been some development with automation for repetitive accounting tasks. “Some of the processes that are being automated include approval workflows, bank reconciliation, journal entries, inter-company consolidation, revenue recognition, lease accounting and depreciation”(Beaver).

About 70% of companies have reported roughly 1/4 of their accounting functions are automated.

Artificial Intelligence (AI):

“Companies are using AI and robotic process automation (RPA) to automate mundane, highly repeatable tasks, allowing accountants to focus their time on higher impact and higher value activities” (Beaver).

Accounting Software:

Bringing data together in a structured and semi-structured way can be difficult without the proper software.  About 36% of companies are trying to switch over to cloud-based solutions.

Analytics and Forecasting Tools:

Planning and budgeting software is very important for big and small businesses. Finance functions have become more complex so understanding the tools and how they work for your business is a must.

Online and Remote Workforce Collaboration:

Cloud-based technology makes it possible for people all over to perform much-needed accounting reports such as the month-end close from anywhere with an internet connection. Zoom interface makes meetings online a breeze to discuss reports and go over other accounting needs.

Security:

Breaches in data security are a huge risk with a lot of things being cloud-based and automated. Most companies train employees how to look for possible identity theft, stolen credit card data, and spoofing to try and keep tight security. Cybersecurity is a really big thing right now and even bigger in the future.

Change in Tax Policy:

It seems there is always something that changes a little in taxes, so it is best to stay updated on everything each year. An example of such a change would be during COVID people receive stimulus checks and that caused some new policies to be made and/or changed.

These are just a few things to keep in mind during the 2023 year in the accounting world.

References:

Beaver, Scott. “15 Accounting Trends to Pay Attention to in 2023.” Oracle Netsuite, 6 Sept. 2023, www.netsuite.com/portal/resource/articles/accounting/accounting-trends.shtml. Accessed 1 Nov. 2023.