Technology has many stories to tell. The word itself is synonymous with development and, in much of today’s business landscape, it continues to reshape industries and businesses. It transforms systems and processes, converting manual tasks into automated functions. With technology, businesses operate more efficiently and effectively. And this is where the latest accounting trends mainly revolve around.
Developments like SaaS saw the industry add cloud-based subscriptions, along with on-premise solutions. Still, more technological disruptions are on the way for accounting. In this article, however, we’ll be presenting you with the top accounting trends that you need to know about.
Many accounting leaders and accountants are feeling the business impact of automation and high-tech systems. As a matter of fact, a Sage report reveals that about 90% of accountants feel that accountancy is undergoing a cultural shift that is leaning more toward technological adoption.
This cultural shift is driven by several factors. The report attributes it to marketing demands, regulations, generation change, and client demands, as well as investments that businesses make to keep pace with the accounting world. With such a transformation in the industry, more and more accounting leaders and professionals are discovering new strengths in utilizing advanced solutions for accounting processes.
Source: Sage (2018)
Most services in the accounting industry are vulnerable to disruptions. There is a need to reshape organizations given recent developments. These future trends in the accounting profession reflect these developments. Aspiring professionals in the field have to take to heart the emerging accounting trends and techniques to make inroads in the talent market.
In the following sections, we’ll dive into more comprehensive discussions of each accounting trend and technique in the accounting industry.
Automating more accounting processes is a key trend in the industry. Automation eliminates confusion and minimizes errors, which is why companies are more inclined to invest in automated solutions. Since the process relies heavily on computers, businesses face the risk of falling victims to fraud and compromised security. These led to an increased demand for internal auditors to check for any data inaccuracies. Thus, there is no need for in-house accounting services to worry about getting replaced by bots.
According to an ACCA Study, over 50% of C-level executives in the accounting industry expect the development of automated accounting systems. In the coming years, it will have the highest impact across several industries, allowing accountants to utilize data and optimize processes for both the best accounting software for small businesses and large enterprises. Accounting automation also seeks to guide businesses in arriving at data-driven decisions more quickly than ever before.
The adoption of technologically-driven solutions in the accounting industry will intensify in the coming years. As the demand for computerized accounting grows, accounting software companies will address this need with robust solutions. These software platforms possess a range of software functionalities accountants value the most, such as optimizing processes and minimizing manual tasks.
The accounting software market will experience a higher level of growth in the years ahead, according to a report by Fortune Business Insights. All over the world, there is a strong demand for software platforms to manage spreadsheets and have a better understanding of tax management. During the forecast period of 2019 to 2024, the market will grow at a CAGR of 8.5%, with North America seen at the forefront. The adoption of modern technologies in the Asia Pacific will also drive the growth of accounting software companies.
Source: Accounting Today (2018)Designed by
Businesses are now outsourcing accounting functions and reaping its many benefits. Outsourcing lets companies focus more on their limited resources, increasing profitability. It also saves them employment costs like payroll, taxation, salaries, benefits and training expenses. Hence, outsourcing accounting functions is becoming a popular strategy among many companies.
This gives rise to the number of outsourced accounting service providers. It is one of the fastest-growing areas in the accounting industry. Every year, businesses experience satisfaction in their outsourced accounting value and results. Outsourcing is now an increasingly important method for CPA firms to deliver efficient services to their clients, as well as analyze business operations and add more value to their business. Accountancy, especially in business processing outsourcing (BPO) companies, is also becoming a highly esteemed career all over the world.
The cloud is becoming a popular place for accounting services. With cloud-based accounting systems, companies and firms are able to have access to their system anytime. Data access also includes tracking inventory, sales, and expenses. Moreover, cloud-based solutions allow FOR the creation of workflows, saving businesses valuable time. Having such benefits are driving businesses to make the shift to cloud-based accounting systems.
As such, about 67% of accountants now believe that cloud technology can make their roles easier. This is according to a survey conducted by Sage, which also reveals that 53% of the respondents adopted cloud-based solutions for project management and client communication. This could be related to the rise in the demand for advanced technological solutions from various industries. Among them is the accounting industry, which is taking a major leap for more effective and comprehensive financial reporting and analytics.
Source: XeroDesigned by
As technology allows specific accounting tasks to become easier, the accounting industry shifts its focus to data analytics. Accountants are taking on new roles as advisors, with unique skill sets that revolve around analyzing data. Analyzing numbers helps businesses come up with valuable insights, which enables them to identify process improvements as well as increase efficiency and manage risks better.
Although analytics as part of accounting services is not entirely new, it is now more powerful, presenting financial performance in a new light for better actionable insights. Larger accounting firms apply data analytics in tax, consulting, risk management, and auditing. Meanwhile, CPAs in other organizations are utilizing the capabilities of the best data analytics solutions to support industry-specific needs.
The accounting industry needs to understand blockchain technology more and for good reasons. Blockchain is already changing the accounting sector by lowering the costs of reconciling and maintaining ledgers. It also provides the needed accuracy in terms of ownership and history of assets. With blockchain technology, accountants gain a more unobstructed view of their organization’s obligations and available resources.
The Big Four in the accounting industry—Deloitte, Price Waterhouse, Ernst Young, and KPMG—join the blockchain trend by having people work in distributed ledger laboratories. This is in the hopes that immutable distributed ledgers will become a reality. In that case, their audit and accounting divisions will most likely become obsolete. Blockchain-based projects saw exponential growth over the past few years, acquiring $1 billion in investment, according to data published by Statista.
The effects of social media encompass different industries. And the accounting industry is one of those. The use of social media in various industries helps improve brand awareness, increases sales, and drive website traffic. For accountants, it is quickly becoming a powerful branding and sales tool that boosts their exposure demonstrates their expertise and provides many opportunities to learn more about the industry.
An effective social media strategy can contribute to the profitability of a business. Social media sites like Facebook, Twitter, LinkedIn, blogs, and community forums help businesses keep in touch with clients. Accounting firms also benefit from monitoring competitors and industry trends. As far back as 2014, about 77% of accountants already use social media as part of their marketing and branding strategy. This figure is sure to grow in the coming years, as social media platforms help businesses establish reputable images.
Experts are predicting a hybrid approach that combines accounting technology and financial advisor input in the near future. This comes from the discovery of new solutions for analytics that allow accountants to focus more on decoding data for deeper insights. Unlike other tasks in accounting processes, decision-making will always fall into the hands of human professionals and experts. Hence, complete automation in the accounting sector cannot be possible.
The increasing introduction of more advanced technologies in the accounting industry allows accounting firms to focus on the quality of their advisory services. Services like growth profitability and strategies, as well as business intelligence, are becoming better and are growing in numbers. The elimination of manual and repetitive tasks opens opportunities for accounting firms to spend more time analyzing data, providing insights, and giving advice to their clients.
Artificial Intelligence (AI) is producing positive results in the accounting industry. It allows analyzing large volumes of data at high speed, as well as increasing productivity and generating more accurate data at a reduced cost. The importance of AI in accounting is growing more steadily as it optimizes administrative tasks and accounting processes that result in various structural changes. AI provides vast opportunities for accountants and a new level of efficiency for workflows.
The Sage Practice of Now 2018 report reveals that about 66% of accountants would invest in AI. Also, 55% of them see themselves using AI in the next three years. These figures only show that AI is transforming the industry. However, experts do not see AI replacing human roles. Instead, AI will be assisting human decision-making and empowering lucrative and in-depth analyses.
Just as big data plays a crucial role across many sectors, it fills the same significant role in the accounting industry. Big data supports companies and firms through expanded assessment methods, with accountants and finance experts working behind the scenes. Professionals identify which of the collected data are the most valuable and then turn them into actionable insights. This makes it crucial to understand what big data is in making business decisions.
With the use of big data, accountants and experts transform key internal data sets into secure, vigorous, and important data analyses. A growing number of firms are now prioritizing accountants who have extensive knowledge in analytics and data science. This shows that the accounting industry is shifting from its reactive nature to becoming more proactive. CPAs, backed by big data, can now focus more on planning, taking control, analyzing processes, and anticipating problems before they even happen.
Source: Dresner Advisory Services (2018)
During the third quarter of 2019, the latest report from the US Bureau of Labor Statistics (BLS) on Unemployment Rates by Occupation, has revealed that the accountant unemployment rate is at 2.0%. Employers these days are having a hard time finding top talents in finance and accounting. This is why it is more important for them to broaden candidate search and hiring requirements. And for the first time in history, candidates get to dictate certain terms of their employment, among which is having a flexible and remote work setting.
Accounting leaders are consequently adapting to the trend of allowing employees to engage in remote work. According to a 2018 survey published by Convergence Coaching, about 43% of CPA firms are offering their employees the chance to work from home on a regular basis. This would not have been possible in the past. Still, with technological advancements and the emergence of computerized accounting systems, accountants working from home are able to produce excellent results in their work as those in office settings.
Current accounting trends tell us one thing: digitization is as ubiquitous in the accounting sector as it is anywhere else, but human roles remain just as relevant. Another development that will define accounting practice in the future is the growing acceptance of remote work in the field. It’s already big in other industries and accounting will see more of it in the future.
There are benefits to mine from the advanced solutions brought by the recent developments in the accounting sector. Among these are saving time, making tasks more efficient, and having more accurate analytics. Other than these, however, reducing costs is one of the significant benefits that companies and accounting firms experience as they embrace the latest technologies to optimize processes.
If you’re looking for accounting platforms that fit your budget, you may want to check out the costs of top accounting solutions that are available in the market today.
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