What could be the problem if the iPhone is not showing software update

The problem could be that your phone has been updated to the highest iOS version supported and can no longer be updated. If your phone is an iPhone 7 as it is showing in your profile line, you should be able to update to iOS 14 or next week, iOS 15. If you are asking about iOS 15, you have to wait until it is released next week.

Do you have an iPhone 7?

My iphone 7 using ios 14.2 is no longer showing system update at the system preference and factory reset( Erase data) also not showing.