Uploaded on March 1, 2017
“The accounting industry has been through plenty of changes over the last decade, and so far it has adapted well to the always changing landscape, to become more tech-savvy, efficient, and so much more.
As we step into a new year, it is vital for the accounting industry as a whole to yet again anticipate and plan accordingly to all the new policy and guideline changes to transform their practices to be in sync with the modern times.
Here are a few ways to help transform your practice in 2017.
1. Corporate & Business Tax Reform
Corporate and business tax reforms will be the biggest concern in 2017. There are unconfirmed reports that the corporate tax rate might just be reduced to an astounding 15 percent from the previous 35 percent. Some reports indicate that the rate could stabilize somewhere around 25 to 28 percent. With that being said, we could all expect significant corporate and business tax rate reductions in 2017.
If the previous reports of reduced tax rates are even a little bit true, and a unified business rate approach is applied, it would mean that existing business owners of pass-through organizations (S-level corporations, partnerships, and LLCs) could end up with the same tax rate of 15 percent. If compared to the current top tax rate which is stated to be 39.6 percent, the new reduced tax rate would spell a significant reduction in taxes.
Although, as most businesses and organizations recognize themselves as pass-through entities, this would mean that they now have to modify their approach, as the changes will also affect their clientele as well.
2. The Affordable Care Act
There is a great chance the Affordable Care Act will be replaced in 2017. But doing so, in reality, will be a time-consuming and daunting task. However, it is recommended for clients to act as if the act was still valid and functional until an official statement is released. Businesses with more than 50 full-time employees are obligated to provide healthcare insurance, defaulting which will result in a 2,000 USD fine for each employee (not including the first 30 full-time employees). It is however not that likely that the penalty will be enforced, but then again it’s a chance that your clients might or might not be ready to take.
If the Affordable Care Act is actually scrapped, the repealing and replacement process would easily take the entire year in time and may even extend up till 2018, simply because of all the complex legislative processes. It is highly recommended for CPAs and accounting practices to keep an eye on the proceeding to plan their practice accordingly in 2017 and 2018.
3. Client Relations & Experience
Every business client has their own agenda and mindset of accounting practices and it is not surprising if your clients are a bit pushy when it comes to tax filings. Most businesses when availing accounting services and solutions usually expect creative solutions to maximize tax savings and improve the business’s financial standing.
As a CPA, one should always consider the expectations of their clients while staying well within the numerous policies and best practices. Many businesses also expect their accountants to come up with capital financing solutions to either improve their financial conditions or ways to put their money to work.
Client relations and experience will surely take on a more critical position in 2017 as accounting services and solutions become more customer-centric, delivering more business value than before. And with the numerous legislative changes in 2017, clients will turn to their accountants or accounting firms to provide not just financial management, but also guidance and guarantees for all things financial in 2017.
4. Changes in Auditing
Auditing processes and strategies in 2017 are expected to become more technologically assisted. This will bring along a whole lot of new opportunities for continuous auditing programs. This will help accountants, auditors, and their clients gain access to perpetual control and risk management contingencies.
It also brings to the table real-time error reporting and notifications for data and system issues. As expected, the auditing process will become more streamlined with the help of technological and software tools, delivering more business critical data and information.
5. Changes in Tax-Filing Strategies
With so many changes in the annual tax compliance policies, accountants and accounting practices will have to make room for major changes in the future. With the advent of accounting software tools and cloud accounting solutions offering real-time data sharing, businesses have somewhat become self-reliant when it comes to accounting. With that being said, accounting firms and CPAs now have to find new ways to add value to their services and deliver greater business value to their clients.
Compared to general tax consultations and financial advisory support, accounting firms and CPAs in the future have to concentrate on expanding their knowledge and service base to find more niche opportunities to expand their business and practice.
6. Financial Supervision
With so many policy changes in 2017, it would also be wise to expect considerably more oversight from financial and tax regulatory bodies. Experts have anticipated both auditing services and newer financial consulting programs to be critically reviewed by the Public Company Accounting Oversight Board and the US Securities and Exchange Commission’s enforcement department.
They also foresee smaller accounting firms discontinuing their auditing services in favor of more promising business growth opportunities. This will give rise to competitor review systems to help practices and firms improve their service and knowledge base.
7. Bundled Service Packages
Accounting services in the future need to become more comprehensive to the general public, who has little to no accounting knowledge. With all the recent and upcoming changes in the accounting industry, CPAs and accounting firms will need to deliver their services in bundled packages that are specifically designed for their clients and their requirements. This will allow for a more diverse service base with cost-effective pricing for businesses of all sorts and sizes.
Accounting experts all over the world are predicting that the numerous changes to accounting policies and guidelines will start affecting accounting practices sooner than expected. And to stay above the competition, CPAs and accounting firms now need to be even more flexible and embrace these changes to better adapt their services and practices to derive the maximum benefit for both themselves and their clients.”