The accounting industry has been grappling with a shortage of qualified professionals for over a decade, and the problem will continue to affect businesses in
As a result, companies face significant challenges: The month-end close is an important process for businesses as it involves reconciling financial accounts and preparing financial statements. And without the expertise of accountants, there would be no accountability or rules.
How is the shortage of accountants impacting the month-end close and what can businesses do about it?
Delayed reporting
If there are not enough accountants to reconcile accounts and prepare financial statements, organizations will have to face delays and setbacks in their operations.
To address this issue, businesses can consider outsourcing their accounting functions to third-party providers. As these providers offer flexible staffing options, they can ensure the month-end close is completed on time, enabling companies to do timely regulatory filings.
Increased errors
The accountant shortage increases the number of errors. Tackling this problem is critical since accurate financial reporting is key to preventing unreliable statements, lost business opportunities, and regulatory noncompliance.
Therefore, implementing automated accounting tools can be a game-changing step. These solutions can help reduce the risk of errors by automating the reconciliation process and providing real-time visibility into financial data.
Higher costs
To attract and retain qualified accountants, businesses may need to offer more competitive salaries, which puts a financial burden, especially on small and medium-sized companies.
Enterprises can consider outsourcing their accounting functions to third-party providers offering flexible staffing options and experienced accountants at a more affordable cost.
Decreased productivity
Being understaffed to manage the month-end close process would require other employees to take on additional responsibilities. Due to their lack of skills and experience, these employees might not be able to perform accounting tasks efficiently, leading to a decrease in productivity.
Businesses can explore innovative ways to remedy this issue. Automated accounting tools, for instance, can help reduce the time employees spend on manual tasks and allow them to analyze financial data, identify trends, and make timely decisions.
Reduced compliance
Without the right staffing levels, businesses may struggle to comply with regulatory requirements, which leads to fines and other penalties that can cause financial strain for businesses.
One potential solution is outsourcing. As third-party providers offer experienced accountants who are familiar with regulations, it becomes easier for businesses to comply with regulatory requirements.
The shortage of accountants can have a significant impact on the month-end close process, from delayed reporting and increased errors to higher costs and decreased productivity. By investing in automated accounting solutions or outsourcing their accounting functions, businesses can ensure the month-end close process is completed efficiently and accurately.
