Technology is revolutionizing all industries, and the accounting sector is no exception. Accounting is an essential aspect of every business. It provides organizations with accurate data for making effective business decisions.
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However, manual accounting processes are prone to human errors, and therefore, not fit for the digital era. Thus, a lot of accounting firms are nowadays adapting to the latest technological transformations to stay relevant in the industry.
Only businesses that are prepared to embrace the latest accounting trends will succeed in gaining a competitive edge over others. Thus, if you do not want to fall behind your competitors, you should keep yourself abreast of the latest technological developments taking place in the accounting sector.
Top 9 Accounting Trends Shaping the Future of Accounting Technology
In this post, we intend to shed light on nine emerging accounting trends shaping the future of accounting technology. So here is a quick rundown of the major accounting trends that will dominate in 2020 and beyond.
1. Cloud-Enabled Accounting Tools Will Stay
Cloud technology will have the upper hand in the accounting industry this year. Currently, cloud-based accounting software, because of its advantages, is gaining immense popularity amongst forward-thinking accounting firms.
Cloud-enabled accounting tools eliminate the need for installing and maintaining accounting tools on each desktop your accountants use. Moreover, it enables accounting companies to have access to their accounting data anytime, anywhere, 24/7. These cloud accounting solutions also help organizations keep tabs on sales, expenses, and inventory. Last but not least, it offers multiple security layers to your confidential accounting data, thus protecting your data from hackers and cyberattacks.
Considering the benefits offered by cloud-enabled accounting software, more and more businesses are currently shifting to cloud accounting systems. It not only streamlines the accounting workflow but also simplifies the task of accountants. Even accounting course training providers are tweaking their training programs for creating accounting professionals that are adept at managing complex cloud environments in the times to come.
2. Automation and AI- the Future of Accounting
A study conducted by Forbes revealed that in the coming times, manual accounting chores such as audits, banking, and tax preparation would be completely automated. Thus, the industry will witness the automation of more and more accounting processes.
Since automation reduces the need for entering data manually, it leaves no room for human errors. Additionally, accounting automation also helps businesses make data-driven decisions efficiently.
Currently, accountants are relying heavily on AI-enabled accounting software for optimizing administrative tasks. AI helps accountants analyze huge volumes of data quickly and accurately besides enhancing their productivity. A report released by Sage Practice in 2019 states that almost 55 percent of accountants would prefer using AI-enabled accounting platforms by the year 2024.
Also, Read: Latest Accounting Software Trends to Watch Out
3. Outsourcing Accounting
Outsourcing helps accountants to focus more on the important aspects of their business. That’s why SMEs, as well as large corporations, are resorting to outsourcing their daily accounting functions to BPOs.
At the same time, some businesses are nowadays outsourcing their accounting tasks to third-party accounting service providers for utilizing their end-to-end accounting services. Outsourcing accounting services also give organizations access to highly proficient accountants that offer consistent and scalable services. The trend will continue to grow in the years to come.
4. Social Media Integration
The ever-increasing popularity of social media platforms, such as Facebook, Twitter, Linkedin, etc., will drive more and more accounting firms to leverage social media channels more actively in the future.
Social media acts as a robust sales and branding management software for accountants. Besides helping them interact with their peers, fans, and customers, social media also helps accountants stay updated on the latest accounting trends or political goings-on that may affect their work. What’s more, social media also acts as a great medium to help businesses keep tabs on their competitors. A results-driven social media strategy goes a long way towards enhancing the profitability of organizations significantly. That’s why, the highly advanced accounting software comes with social media management tools to help accountants grow their business.
Also known as Digital Ledger Technology (DLT), Blockchain is yet another trend that will revolutionize the future of accounting technology. Blockchain, known for its decentralized nature, is highly secure and offers a robust way of managing your finances and fund transfers.
Normally, financial transfers are carried out through banks with an agent in between. Blockchain technology eliminates the need for agents and lets you carry out financial transactions directly. Thus, it helps minimize costs, besides providing you with enhanced security. Moreover, DLT is also transparent as it stores transaction-related data on countless servers across the world. Since anyone having access to the blockchain network is capable of seeing modifications (if any) in real-time, this makes it impossible for hackers and cybercriminals to gain absolute control over the network.
Though Blockchain technology is still in a nascent stage, it will take some time for businesses to adopt it. Despite this, it is advisable to keep an eye on this innovative concept.
6. Mobile Computing
With the advent of mobile technology, the use of smartphones and other internet-based handheld devices such as iPad, tablet, etc., have also increased dramatically. The groundbreaking innovations in mobile technology have led to the development of innovative mobile apps to help users access important data and do their tasks on the go.
Considering the immense benefits offered by mobile technology, accounting experts are also taking measures to leverage mobile-optimized accounting tools for managing accounting tasks such as invoice creation, cash flow management, expense management, etc. right from their mobile devices on the go.
Moreover, with the proliferation of mobile banking applications, the demand for integrated banking technology is also picking up steam. Nowadays, banking and accounting are treated as interconnected entities. Thus, a lot of nextgen accounting systems are offering bank account integration tools to simplify and accelerate the process account reconciliation. The popularity of mobile banking apps will continue multiplying as more mobile accounting apps will be integrated with mobile banking applications, thus enabling business owners to carry out their day-to-day banking tasks right from their mobile devices.
7. Big Data
Data analysis will continue playing a major role in the accounting industry. Thus accounting professionals should make the most out of big data analytics for boosting the efficiency of their work.
Big data has transformed many sectors across the world, including the accounting sector. It helps accountants collect valuable data from social media platforms and other digital channels for deriving actionable insights. Since the significance of Big Data cannot be overlooked, a lot of accounting firms are nowadays looking out for accountants that are well-versed in data analytics.
When certified public accountants (CPAs) are backed by big data, they can plan better and concentrate more on evaluating accounting processes seamlessly. What’s more, predictive big data analytics also help CPAs to identify frauds and predict disasters in advance.
8. Machine Learning for Fraud Detection
In this digital era, accounting firms are prone to cyberattacks, hacking, phishing, and banking frauds, which, if not detected in advance, can prove catastrophic to your business. The most sophisticated accounting systems come with robust tools capable of filtering duplicate documents, thus keeping frauds at bay.
Many accounting firms also count on accounting tools with Machine Learning (ML) algorithms for evaluating financial data and detecting potential frauds. Unlike conventional data analysis processes, ML enables accounting companies to deal with financial mismanagement more accurately. This emerging technology is capable of scanning huge volumes of data in a fraction of seconds and eliminating suspicious files.
Though ML is known for its efficiency, it is still in its incipient stage. Once it is adopted completely by organizations for combating accounting scams, it will make a significant impact on financial accounting fraud detection.
9. Digital Collaboration Tools for Remote Work
In this digital era, the success of your organization depends on how fast you embrace the emerging technologies to get things done without the least error. As we are entering a new era of remote work, accounting firms are embracing software with remote collaboration tools to help you connect with your in-house accounting team as well as remote employees. Online collaboration tools enable you to give your accounting team access to your accounting data so that they can take care of your organization’s accounting procedures from any corner of the globe. What’s more, these tools also help you complete projects quickly, thus helping you save a great deal of time.
Will accounting technology replace human roles in accounting?
Though advanced technologies such as AI and machine learning provide immense opportunities for accountants, they won’t replace human roles. These groundbreaking technologies will empower accountants and help them make informed data-driven decisions.
The Bottom Line
So these are the nine trends that will drive the future of accounting technology. Considering the trends highlighted above, we can conclude that the future of accounting technology looks positive and bright.
In an ever-evolving business environment, keeping pace with the latest accounting technology trends will not only help you make the best business decisions but take your business to the next level. Thus, organizations should not refrain from embracing the latest accounting trends that are shaping the future of the accounting sector worldwide.