Navigating the Impact of Tariffs: The Critical Role of Accountants in Global Trade

By Giavanna Derrick and Skylar Myers

How Are Accountants and Finance Professionals Being Impacted by Tariffs?

Tariffs—taxes placed on imported goods—are more than just international trade tools. For accountants and financial professionals, they present daily challenges that ripple through financial systems, operations, and strategic decision-making. This article explores how tariffs impact accounting and finance professionals, what professionals can do to help manage these impacts, and the steps they can take to mitigate the effects in a constantly shifting global economy.

The Impact of Tariffs on Accountants and Finance Professionals

Tariffs directly influence how accountants do their jobs, affecting everything from tax compliance to cost tracking and financial forecasting. Accountants must stay up to date with evolving tariff regulations, adjusting reported business costs and ensuring accurate financial reporting. Since tariffs can impact supply chains and profit margins, accountants are central in helping businesses manage related financial risks and make informed decisions.

To help manage tariff-related costs, accountants often set up dedicated accounts such as “Tariff Expense” or “Import Duties” to clearly separate them from general operating expenses. In more complex operations, they utilize inventory systems that automatically factor in tariff costs, allowing those expenses to be passed into Cost of Goods Sold (COGS). By breaking down tariff costs by supplier or product, businesses can identify the areas most affected and make informed adjustments.

Tariffs affect global supply chains, with higher import taxes raising the cost of materials, components, and finished goods, forcing companies to either absorb the added cost—hurting margins—or increase prices for consumers. Tariffs can also disrupt the flow of goods through customs delays or force businesses to seek new suppliers, which can lead to stock shortages and affect customer satisfaction. Some companies may even need to revise their logistics strategies—changing shipping routes, warehousing, and distribution—to cut down costs or minimize delays.

Here are 10 ways tariffs will affect accountants and their responsibilities:

1. Cost Analysis & Budgeting – Accountants must reassess financial forecasts, adjust budgets, and analyze how increased import costs impact overall expenses.

2. Inventory Valuation Adjustments – Higher costs due to tariffs may require accountants to adjust inventory valuation methods, such as FIFO or LIFO, to reflect the true cost of goods.

3. Financial Reporting Changes – Accountants need to account for tariff-related cost increases in financial statements, ensuring transparency in earnings reports and disclosures.

4. Tax Compliance & Planning – Tariffs impact tax calculations, deductions, and potential credits, requiring accountants to adjust tax planning strategies to optimize liabilities.

5. Supply Chain Restructuring Support – Businesses may shift supply chains to avoid tariffs, and accountants play a role in analyzing the financial impact of sourcing changes.

6. Cash Flow Management – Accountants help businesses adjust cash flow projections to accommodate higher costs and potential delays in payments due to tariff fluctuations.

7. Customs & Trade Regulation Compliance – Accountants must ensure accurate customs documentation and compliance with international trade regulations to avoid penalties or legal issues.

8. Mergers & Acquisitions Considerations – Tariffs can influence company valuations, and accountants involved in M&A must account for tariff risks when assessing potential deals.

9. Strategic Advisory Role Expansion – Businesses rely on accountants to assess financial risks, model potential tariff impacts, and develop strategies to mitigate negative effects.

10. Cost-Pass-Through Pricing Analysis – Accountants help businesses determine whether to absorb increased costs, adjust pricing strategies, or pass tariff costs on to consumers.

What Can Accountants Do About These Impacts?

Accountants are uniquely positioned to respond proactively to tariff-related challenges. They are not only responsible for accurate tracking and compliance, but also for advising leadership on how to adapt to new economic realities. By analyzing the financial effects of tariffs and offering data-driven insights, as described above, accountants help businesses pivot strategies to remain competitive and resilient.

Steps to Mitigate the Effects of Tariffs

● Implement Specialized Accounting Categories: Use separate accounts for tariffs to monitor and manage costs efficiently.

● Leverage Automated Inventory Systems: Integrate tariffs into inventory valuations to reflect true product costs.

● Analyze Tariff Costs by Supplier or Product: Identify high-impact areas and explore alternative sourcing options.

● Work Closely with Supply Chain Teams: Evaluate supplier relationships and help reassess sourcing strategies.

● Monitor Regulatory Changes: Stay informed on trade policy shifts to ensure compliance and anticipate risks.

● Adjust Pricing Strategies: Factor in tariff costs to maintain profit margins without surprising customers.

● Reevaluate Logistics Operations: Find ways to optimize shipping routes and warehouse locations to reduce tariff-related delays and expenses.

Conclusion

Tariffs have reshaped the responsibilities of accountants and finance professionals, making their roles more strategic than ever. They are no longer just number crunchers but critical advisors in navigating the complexities of global trade. By tracking costs, staying compliant, and helping businesses adapt, accountants ensure that companies remain financially sound and operationally agile in the face of tariff pressures.