Did you know, 90% of accountants feel that accountancy is undergoing a cultural shift? The shift is attributed to changes in marketing demands, technological adoption, regulations, and client preferences.
To stay a step ahead of competitors, firms need to match the pace of the rapidly changing accounting sphere. More and more leaders are discovering new strengths in using advanced solutions for accounting processes.
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Without further ado, let us have a look at the trends that are shaping the accounting industry.
1. Automated Accounting Processes
According to an ACCA study, 50% of C-level executives in the accounting industry believe that automated accounting systems will be the norm in coming years. They will have the highest impact across several industries and allow accountants to optimize processes for small and large enterprises. Moreover, it will also guide businesses in making data-driven decisions.
However, automated systems come with their fair share of risks. Since the accounting process relies heavily on computers, businesses are at a risk of falling victims to fraud and compromised security. This, in turn, will lead to an increased demand for internal auditors who will check the data for inaccuracies.
2. Rise of Accounting Software Solutions
The adoption of technology-driven solutions in the accounting industry will increase in the coming years. Moreover, the demand for computerized accounting will grow, and online accounting software companies will fulfill this need with robust solutions. Furthermore, these platforms will come with a host of integrations and help expedite day-to-day processes and minimize manual tasks.
There is a strong demand for platforms that can manage spreadsheets and have a sound understanding of tax management. Reports suggest that during the forecast period of 2019-2024, the accounting software is expected to grow at a CAGR of 8.5%. Furthermore, the adoption of modern technologies in the Asia Pacific region will drive the growth of accounting software firms.
3. Outsourcing Accounting Functions
More businesses are outsourcing their accounting functions and reaping their benefits. Outsourcing will help you focus on core business processes and increase profitability. It will also help you save time on employment costs like payroll taxation, salaries, training expenses, and benefits. This will also lead to a rise in the number of accounting service providers.
Outsourcing has become an essential part of CPA firms as it helps them deliver top-notch services to their clients. It also lets them analyze business operations and add more value to their business. Moreover, accountancy, especially in BPO companies, is becoming a highly sought-after career worldwide.
4. Cloud-Based Accounting
Did you know, 67% of accountants believe that cloud technology can make their roles easier?
As per a survey conducted by Sage, 53% of the respondents adopted cloud-based solutions for client communication and project management.
With cloud-based accounting systems, you can easily access your system at any given point in time. They can even track inventory, sales, expenses, and budget overflows.
Moreover, cloud-based solutions also let you create workflows and save time. Such benefits have urged businesses to make the shift towards cloud-based accounting systems.
5. Focus on Data Analytics
The advent of technology has made complex accounting tasks a lot easier. This has urged the accounting industry to shift its focus on data analytics. Accounting professionals are taking on new roles as advisors and developing skill sets that revolve around analyzing data.
Advanced reporting and analytics can help you come up with valuable insights and identify process improvements. Moreover, it will also help you increase efficiency and manage risks with ease.
While analytics is not a new addition to accounting services, it has now become more powerful. Moreover, it has provided an all-new dimension to measuring financial performance and made way for better actionable insights. Larger accounting firms use data analytics in consulting, risk management, tax filing, and auditing. On the other hand, CPAs are using data analytics capabilities to fulfill industry-specific needs.
The accounting industry is making a shift towards blockchain technology for the better. Blockchain is already altering the accounting sector by significantly reducing the costs of reconciling and maintaining ledgers.
Moreover, it also provides the needed accuracy in terms of asset history and terms of ownership. Blockchain technology can help your accountants gain a clear understanding of your organization’s goals and available resources.
The Big Four of the accounting industry- Deloitte, Ernst Young, Price Waterhouse, and KPMG have already joined the blockchain wagon. They have a dedicated resource pool working in distributed ledger laboratories. Furthermore, as per data published by Statista, blockchain-based projects saw exponential growth in the past years, acquiring $1 billion in investment.
Social media has helped several industries improve brand awareness, drive website traffic and increase sales. For accountants, it has become a powerful branding and sales tool. Moreover, it has helped several accountants demonstrate their expertise and learn more about their customers.
Social media sites like Twitter, LinkedIn, Facebook, and community forums can help you keep in touch with clients. Moreover, accounting firms can also benefit from monitoring industry trends and competitors. Interestingly, even in 2014, 77% of accountants used social media a part of their marketing and branding strategy.
8. Advisory Services
Experts predict that a hybrid approach will combine accounting technology and financial advisor input in the near future. This will allow accountants to focus more on decoding data and get access to deeper insights.
However, in accounting processes, decision-making will always be in the hands of humans and experts. Hence, complete automation in the accounting sector is not possible.
The inclusion of advanced technologies in the accounting industry will allow accounting firms to focus on the quality of their advisory services. Moreover, accountants will be free from performing manual and repetitive tasks. Thus, they will get more time to analyze data, provide insights, and advise their clients.
Furthermore, automating accounting processes means fewer errors. Thereby it will increase client confidence in data and improve the quality of advice given to them. Moreover, with robotic process automation (RPA), accountants can rely on AI to better understand client intent.
9. AI-based Data Analysis
Artificial Intelligence (AI) can help you analyze large volumes of data at high speed and increase productivity. Moreover, AI is growing more steadily as it optimizes administrative tasks and accounting processes. Accounting firms believe that it will bring in various structural changes.
As per reports, 55% of accountants see themselves using AI in the next three years. However, AI will not replace human roles. Instead, it will be assisting decision-making and supporting in-depth analysis.
10. Big Data in Accounting
Big data plays an important role across many industries. Interestingly, it has made a similar impact in the accounting industry. Effect of big data on accounting and financial services has helped several firms with expanded assessment methods.
With big data, accounting experts can transform key internal data sets into secure and in-depth data analysis. A growing number of firms are now eager to hire accountants who have extensive knowledge in analytics and data science.
This is a clear indication that the accounting industry is shifting from its reactive nature to adopting a proactive outlook. CPAs backed with big data can now focus more on analyzing processes, taking control, and forecasting problems before they can happen.
11. Remote Work Setting
Did you know, in August 2020, the unemployment rate of accounting and finance roles in the US was 8.4% and 5.7%? Employers these days have a tough time filling top roles in finance and accounting.
This is why accounting firms need to broaden candidate search and hiring requirements. Interestingly, candidates are now getting an opportunity to dictate their terms of employment. The top priority for them is having a flexible and remote work setting.
As per a 2020 survey published by Arizent, 85% of CPA firms will allow their employees to work from home even after the pandemic. With technological advancements and the rise in computerized accounting systems, accountants will be able to produce excellent results in remote work settings.
These were some of the benefits brought by the recent developments in the accounting sector. Among these are saving time, having more accurate analytics, and reducing costs.
Did we miss out on your favorite trend? Let us know in the comments below!