Challenges facing the accounting profession in 2021

10th Feb 2021
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Challenging to move

It would be nice to think that with 2020 behind us, we can move on and start to think about new challenges and opportunities this year – but, as we all know, COVID-19 will continue to be the main concern on people’s minds for the foreseeable future. 

January alone held plenty of challenges for accountants, including coping with self-assessment season under lockdown, quickly responding to Government policy announcements, and supporting clients with new rules following the end of the Brexit transition period.

With more changes to come, and businesses feeling the pressure of lockdown restrictions, accountants continue to be a vital source of information and support. 

Here are some of the main challenges to prepare your firm for this year.

Client cashflow concerns

A survey by Senta at the end of last year found that client cashflow struggles were the top concern for accountants, beating all other issues such as meeting tax payments and keeping up with Government policy.

That sentiment is backed up by our upcoming research report, as 43% of the small businesses we surveyed said cashflow was “extremely” or “very” challenging – more than any other issue they faced. (Look out for the full report, which will be published on our Insight page later this year.)

For many businesses, existing cashflow problems could get worse as national lockdowns take their toll. 

This year, accountants will need to provide continued support with monitoring and improving cashflow, as well as building their clients’ resilience against any future shocks. 

This is one topic you could produce content around to promote your firm’s expertise and complement your work. For example, a set of tips to improve cashflow, a guide for a sector you specialise in, or some software recommendations could get your clients and other small businesses thinking about their cashflow before they contact you directly.
 

Policy changes

HMRC has introduced various relaxations to tax policies in response to the pandemic, including allowing COVID-19 as a “reasonable excuse” for tax deferrals and penalty appeals, and waiving late-filing penalties for self-assessment returns as long as they’re filed before 28 February. 

That’s good news for anyone struggling to meet their usual obligations, but it might make things complicated for accountants. 

This year is also likely to be an eventful one when it comes to economic policy, with many waiting to find out how the Government plans to balance the books after spending around £280 billion on its COVID-19 crisis response in 2020. 

A Budget date has been set for 3 March 2021, but there could be another major fiscal statement in autumn, especially if the Government holds off on tax rises for the first part of the year. 

Accountants will have the challenge of quickly getting to grips with any major changes that are announced, and communicating them clearly to their clients as soon as possible after the Budget takes place. 

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