Despite talks of automation, accountants remain highly in demand in the digital; however, that demand is starting to shift, with the nature of accounting in the digital age is moving from a purely math-centred approach to the expectations of a more holistic approach that also accounts for human involvement.
That is why it is very important that accountants adopt best practices that set them apart from the competition and guarantee them a job. This article addresses some of the best practices that accountants should adopt.
Include accounting tools in your practice
The digital age has brought with it modern convenience and efficiency. Accounting tools make the job simple, manageable and fast. But that is not why accountants should make use of these tools. The current development model revolves around building tools that can be used by people who don’t have the background knowledge in a particular field. In this case, entrepreneurs can easily familiarize and use accounting tools easily, thereby eliminating the need for an accountant. Nevertheless, an accountant who makes use of these tools not only shows a commitment to quality and efficient service delivery but presents new ways of incorporating the tools into the system. Your fresh input on how to utilize these tools makes you expendable and goes a long way to guarantee your job security.
Invest in cybersecurity
Cybersecurity is a major concern for businesses worldwide. This is especially so after numerous attacks cost businesses billions of dollars in revenue in just 2017 alone. The target for most hackers is sensitive information such as trade secrets, identification and financial information, etc. Unfortunately for accountants, this puts them smack in the middle of the cyber war. Accountants deal with information that is highly sensitive, which makes them ideal targets for hacking. Trends indicate that cybercrime is shifting from hacking electronic systems to hacking people through organized social engineering, which presents an even more serious problem for accountants. This is why, as a necessity, cybersecurity should be at the core of best practices for accountants in the digital age.
Currently, cybersecurity is more than just installing security programs. It involves recognizing the extent and severity of the threat, understanding your risks and vulnerabilities and taking active measures to protect against these threats. For example, proactive investments in cybersecurity such as the investment in a VPN would have protected you from the WPA2 vulnerability. Although accountants should invest in security consultants, they should not leave all the responsibilities to these experts. Instead, they should remain apprised of the situation and any emerging issues in the cybersecurity world. Issues such as social engineering, for instance, should be well addressed and understood for better management and protection.
Guarantee high ethical standards
Again, this boils down to the sensitive nature of the information that accountants have to handle. For businesses to entrust you with the responsibility to handle all their financial information, you need to provide solid assurances. These assurances need to be based on a high ethical standard. People need to trust that their information will not be misused or sold for profit. Businesses are increasingly adopting Big Data into their operations, which means the collection of even more sensitive data from the client. This increases the stakes tremendously. Unfortunately, a CPA certification is not proof of an ethical standard and it is up to the accountant to ensure that he/she follows the ethics code to the letter. Information should remain confidential and measures should be taken to ensure that it remains that way.
Make use of decentralized systems
As an accountant, you often have to deal with many different and separate data sets at a time. For convenience and efficiency, you might find it easier to group all the information together into one repository. Unfortunately, this creates a huge security loophole that can be easily exploited. Such a centralized system would be a literal gold mine for hackers if they accessed it. One of the best practices that accountants need to implement in the digital age is the use of decentralized systems. For instance, each data set should be held in a different and secure repository. Each of these repositories should then be afforded the tightest security measures available, such as two-factor authentication logins, limiting admin access to only two different individuals, etc.
The worry for most accountants is that this kind of system would compromise the efficiency and convenience necessary for quality service delivery. But the beauty of using accounting software and tools is that they account for such occurrences. There is various accounting software in the market that consolidate data from multiple sources as long as the source of data is clearly defined. That means that you get to retain the high levels of efficiency while guaranteeing security.
Nevertheless, security is not the only benefit of decentralized systems. One other benefit is the ability to control and regulate the flow of information. With a decentralized system, it is easy to track who handles what and regulate that flow accordingly.
Insurance is yet another essential best practice for accountants in the digital age. There are various types of insurance available for accountants such as property insurance, professional liability insurance, errors and omissions insurance, cyber liability insurance, among others. Taking out insurance indicates that you appreciate the responsibility given to you by people and that you leave nothing to chance. More importantly, it provides you with the coverage you need to operate in a world where despite our best efforts, accidents and mistakes still happen. Even though you should take every active measure to guarantee that you conduct your business in an unquestionable manner, you should always include the possibility of being compromised in one way or the other. Insurance protects you just as much as it protects your clients.
Invest in lawyers
Like insurance, this is as much for your protection as it is for your clients. Having a lawyer on retainer allows you to get ahead of any conflicting legal situations that may arise. For instance, if the government orders you to disclose a client’s information, you should at least contest that order in court. Lawyers are a necessity in today’s financial times, especially to keep people in positions of authority from over-exercising that authority.
The interesting thing about the digital world that we live in is how fast things become obsolete. Technologies, software, tools, and operating methods are all subject to change. As part of the best practices for accountants, continuous learning provides you with a much-needed advantage in a world that seems to always be in flux. Learning allows you to grow as an accountant and develop effective strategies to handle emerging issues. I mentioned earlier that accounting has shifted from its math-centred approach to a more holistic one. That is why you shouldn’t restrict your learning experience to just accounting. Understanding business operations, for instance, allows you to model your services in a way that serves your clients better. For example, the growth of Big Data analytics in business has an impact on accounting just as much as it does on other aspects of the business such as marketing and sales.
Incorporate other fields into your firm
When you read through the accounting advice for businesses that’s available online, you notice a lot of recurring factors. One of these is the need for well-integrated accounting. Such accounting includes fields such as technical assistance and legal departments. As an accountant, you should make this part of your operating model. By incorporating other fields, you provide a fully integrated service for your clients, which eliminates the need for them to seek other firms. This is beneficial in a number of ways one of which is providing you with greater control over information and limiting leaks and other complications.
Another key benefit is that it increases efficiency since you don’t have to wait for the information to be processed by other firms. More so, you can handle problems more effectively. For instance, if you need system updates or new software, your tech team can easily manage that without compromising the operations of the whole firm.
Best practices for accountants improve service delivery while guaranteeing full protection to both the clients and accountants alike. In the digital age, the threats are far more sophisticated and dynamic, which forces the accountants to be flexible and adaptive. The adoption of best practices should, therefore, be set up in such a way that they don’t compromise this flexibility or adaptivity. You should be able to track and monitor these practices as well as evaluate their effectiveness in your practice.
For instance, what are your liabilities and how comprehensive a coverage do you have? Does the insurance cover all these liabilities or do you still need additional coverage? Such assessments should help you stay ahead of your competition and anyone else who would like to compromise your services, such as hackers.