Luckin Coffee, a Chinese chain company, was caught in an accounting scandal. In 2019, they recognized $300M in fictitious revenue. When the news came out, the company’s shares fell to an all-time low. Fraud is only one of the issues accountants face. With scams on the rise and a volatile economy, accountants face new challenges. Keep reading to find out what are their top challenges for 2024.
Trustpair helps accountants face many of those challenges — scams, cybersecurity, and performance — thanks to intuitive fraud detection software. Request a demo to learn more!
Financial planning in uncertain times
No one — and certainly not accountants — needs to be reminded of the current economic climate. We are living through tough times, where unpredictability has become the norm.
There is no telling where the markets will be heading next, if there will be tax or regulatory changes, or how clients’ spending habits will change. As a consequence, treasury projections and financial decisions are harder to make. Accountants are under increased pressure and scrutiny to help businesses get through the storm thanks to detailed reporting and financial planning.
That’s even truer for international companies who deal with foreign currencies or clients, and therefore need to account for the global political landscape. Dealing with third parties and suppliers overseas means an increased risk of fraud, but also adds a variable to your liability management (read more about third-party monitoring right here). For example, governments might decide to add a tax on foreign firms to limit the cash leaving their country.
That’s where risk assessment, financial planning, and good treasury management come into play. It is the accountant’s (and treasurer’s) job to ensure the long-term financial health of the business, so it will keep on thriving. Companies rely more than ever on their accounting team to tackle these financial challenges.
The good news? It’s not all doom and gloom, and a data-driven financial strategy is what will set you apart from the competition. Look at your previous financial reports and analyze the data to see what’s worked best to bring cash in. That very empiric approach is the surest way to make sure you keep on thriving no matter what happens in other firms.
Rising fraud
Fraud is on the rise: in 2022, 56% of US firms were targeted by at least one fraud attempt.
And the current climate does nothing to lessen fraudsters’ motivation to get funds flowing their way.
If anything, it heightens the pressure on everyone. Hackers and employees alike will be more tempted to attempt scamming your business. That’s why investing in internal fraud prevention is now essential.
The issues accountants face regarding fraud are more complex than other departments. As they’re the ones handling the day-to-day financial operations of the business, they make a prime target for fraudsters.
Vendor fraud, invoice fraud, CEO fraud… All these scams are based on identity theft, where scammers impersonate someone to get you to transfer money to them. In reality, you will be sending money to fraudsters — who are sometimes your employees leveraging their knowledge of your business processes for their own gain.
They email or call pretending to be from a federal government office (an inspector general or an IRS employee for instance), asking for personal information like your social security number or personal phone number. Those frauds phonies scams steal personal information that will be used later for their scams.
Your social security number for instance can be used to retrieve a lost password so that they can access your cloud-based accounting software. The fraud challenge is a big one, especially since fraudsters use increasingly complex methods and are organized like legitimate businesses. They rely on cutting-edge technology and sophisticated software, making it virtually impossible to detect their attempts without the right tools.
The solution? Upping your security protocols. Think about redesigning your payment process to make it more secure, for example by:
- Segregating your duties for key operations,
- Using the 4-eye principle,
- Setting up multi-authentication for logins,
- Ensuring your anti-virus and anti-malware are always up to date,
- Giving out frequent fraud awareness training so your employees know the latest scams involving treasury and report fraud attempts to law enforcement ASAP.
You can also start using anti-fraud software like Trustpair! Our software solution uses automatic and ongoing checks before sending any fund transfers to your third parties. We secure your payment chain from end to end, providing top-of-the-range services against fraud. Services also include detailed reporting, real time workflows and warnings in case of risky transactions.
Learn all there is to know about B2B fraud in our latest fraud report!
Ever-changing compliance
One of the constant issues accountants face is to keep up with the ever-changing standards if you don’t want to risk IRS or other United States government sanctions. Companies are dealing with:
- Account validation rules (like the Nacha account validation rule) for both client and vendor,
- The SOX law,
- Tax laws in different states/countries.
In between federal, national, and international regulations, there is enough going on to guarantee accountant’s full employment for decades more to come.
Thanks to today’s technology for allowing us to create financial software that makes dealing with those easier! Most businesses now use accounting and tax software and various finance automation tools to help them with tasks like reporting, tax calculation, or managing the required data.
For account validation, you can use anti-fraud software like Trustpair. We provide ongoing and real-time account verification of your vendors, meaning you know you’re always compliant with the rules and regulatory changes.
Leveraging AI to be more efficient
Being understaffed and overworked is a reality for those in the industry. According to Netsuite, businesses have on average:
- 3 financial employees if they make less than $25M in annual revenue,
- 13 finance professionals for revenue between $100M and $499M.
With all the challenges and issues accountants face in 2024, there is one thing clear: they will need to be more efficient. Increasing work productivity in the treasury department benefits the whole business:
- Better treasury management,
- Time spent on strategic decisions (vs busy work),
- Improved relationships with third parties,
- Reducing bottlenecks with other departments and in case of IRS investigation.
It also helps with attracting more talent to the profession. The skills needed today have to do with finding creative solutions to tackle challenges that haven’t emerged yet, and setting up systems and workflows that make your firm run more smoothly.
So, how do we get there? By leveraging the powerful tools at our disposal.
Finance automation is not here to replace, but rather to support accountants in doing more work in less time. It’s about automating the time-consuming tasks of your day-to-day so you can focus on higher-value ones.
AI, far from being a simple buzzword, can do a lot to increase efficiency in your department treasury. From automatic reconciliation to fraud prevention, Artificial Intelligence and Machine Learning can boost accountants’ productivity.
For example, Trustpair, our anti-fraud software, uses AI and predictive modeling to spot fraudulent patterns in your third-party transactions. Fraud alerts are sent to you straight away if we detect anything suspicious. Relying on fraud prevention software means you’ll be 100% protected against third-party scams. Our solution offers detailed reporting, real-time risk monitoring, and workflows that adapt to all employees.
It also means you don’t have to do tedious (and inefficient) manual checks of your vendor’s credentials, and trust that you always know who you pay. Thanks to our solution, your financial department will have more time for high-added value missions and key decision-making.
In short, software automation helps save time to focus on the real issues accountants face. It allows finance professionals to be a part of the strategic planning in your company.
Get ahead of your accounting challenges with Trustpair, the best anti-fraud software.
Key Takeaways:
- Accountants face many problems: dealing with uncertain markets and taxes, protecting their organization from scams, and keeping up with compliance, all while being more efficient.
- Using today’s technology, Trustpair helps finance professionals leverage their time and focus on higher-value tasks, all while being 100% protected against third-party fraud. Our services include extensive reporting, cutting-edge technology and automation for increased payment security.
