How quickly life and business are evolving! The Boomer era is indeed in the rearview mirror, so it’s time for accounting professionals to brush up on what’s happening now — and what’s beyond the horizon — that will affect their practices and business clients. From societal shifts to high-tech developments, Here are some things to consider as you navigate the changing business landscape.
Seven Changes and Trends to Watch in 2022
1. Marketing Trends
An online presence in this current environment has become essential for accounting professionals. An estimated 78 percent of businesses that use social media to market themselves and gain referrals perform better than their peers. Also, video marketing and live video streaming have gained ground as two of the most effective ways to raise awareness, establish credibility, and convert target audiences. Accounting firms may want to explore ways to use video marketing (e.g., video tutorials on YouTube or live question and answer sessions on Facebook Live) to demonstrate their expertise and expand their online following.
2. Remote Collaboration
The COVID-19 pandemic changed how businesses in nearly every industry serve their customers. For some accounting firms, it resulted in temporarily shifting from having staff in the office to managing a remote workforce. Client collaboration went from predominantly face-to-face to virtually meeting via video meeting apps. While some semblance of “business as usual” has returned, many of these pivots have become permanent. Like other types of companies, accounting firms must continue to adapt to the “new normal” for working with staff and clients. “Flexibility” will increasingly become the operative word for attracting talent and collaborating with customers.
3. The Demand for Speed, Efficiency and Availability
Like customers of other types of businesses, accounting clients expect fast answers to questions, prompt action on requests, and quick resolutions to issues. Cloud-based accounting and payroll platforms that update data in real-time across devices and give 24/7 on-demand access to reports and analytics empower accountants to satisfy those needs.
As more industries move to systems in the cloud, accounting professionals are likely to see client expectations grow for extended support hours and nearly instantaneous response times. How will you manage those expectations? What tools will you use to help satisfy them?
4. Cryptocurrency
Blockchain networks and the cryptocurrencies (digital currencies) they manage and monitor seem like the stuff of sci-fi films. However, they’re here in the real world with people across the globe using cryptocurrency for buying and selling goods and services. Unlike traditional forms of money, cryptocurrencies are digital assets not controlled by a central regulating authority like the government or a bank. Instead, a decentralized distributed ledger, managed by a peer-to-peer computer network, records transactions between parties.
The IRS has established some rules for how cryptocurrency and other virtual currency should be reported for federal income tax purposes. As virtual currency technologies become more mainstream, IRS and state tax authorities’ rules for reporting cryptocurrency exchanges may evolve. Accounting professionals should stay on top of any changes that may affect their clients.
5. Non-Fungible Tokens
Non-fungible tokens (NFTs) are also blockchain-based assets. But rather than representing currency, they represent unique assets such as pieces of art, media, or digital content. An NFT is a financial security that serves as a digital certificate of ownership of a distinctive digital or physical asset. Each NFT is a unit of data stored in a digital ledger (the blockchain), from where it can be sold or traded.
While the IRS hasn’t issued specific NFT tax treatment guidance yet, some experts anticipate the agency will eventually require them to be reported and taxed as intangible assets. However, the tax implications may vary depending on the circumstances. With many questions and few answers at this point, accounting firms will need to watch for updates.
6. Cybercrime
The threats of data breaches, identity theft, phishing scams, ransomware, and extortion emails have escalated to alarming levels. According to a 2021 survey by Accenture, businesses experienced an average of 270 cyber attacks last year — a 31 percent increase over cyber attacks in 2020.
Accounting firms deal with an enormous amount of sensitive information. Moreover, much of the information exchanged between accounting professionals and clients now happens over the cloud. Now more than ever, it’s critical to put safeguards in place to lessen the risks of digital security breaches and the devastating effects they can cause.
7. Desire for a Single Source to Satisfy Multiple Business Needs
Entrepreneurs have more on their plates than ever before. Many find it cumbersome and time-consuming to go to multiple sources for answers to their questions and business-related needs. One way accounting firms can capitalize on this trend is to expand their breadth of services (in alignment with what their licensure legally allows, of course). For example, CorpNet’s Partner Program enables accountants to provide a one-stop shop to clients for their accounting and business formation and compliance filing needs. Firms that simplify life for their clients by preparing business filings on their behalf (or referring them to a trusted partner) can differentiate themselves in the market, increase their revenue and strengthen customer loyalty.
“Change is inevitable. Growth is optional.” – John C. Maxwell
Although we cannot predict the future, one thing is certain: more changes and challenges lie ahead. No one can fully prepare for what’s to come. However, you can help your business stay ahead of the curve by watching the trajectory of trends like these. The more you know and understand about their current and future impact, the better you can assess what you must do to survive and thrive in the evolving environment they shape.
