The future is something that accountants of our times should be mindful of at all times. The numbers testify to that need when you consider that an overwhelming 83% of all accountants felt that clients were more demanding than five years back. The 2018 version of the Sage Practice of Now report further revealed that 67% of all accountants hold that the profession is now more competitive than any previous point in time. (Image Credit: Macrovector/Freepik)
To remain competitive as an accountant, you must know and observe the latest trends sweeping across the industry.
The top 5 global trends, according to experts for the general practice of accounting in 2020 are as follows:
Use Of Big Data And Analytics
Over time, data entry and recordkeeping software is becoming more vigorous than ever. Today’s businesses expect their accountants to provide enhanced levels of value by presenting Big Data insights and forecasts using predictive analytics. Big Data and analytics has been one of the major new trends seen over the last couple of years.
Big Data has the power to arm business leaders to a vast pool of information. Through analytics tools, this information can be leveraged for better and more informed decisions besides giving businesses a deeper understanding of their company’s financial health. Accountancy needs to keep up with the times and use advanced analytics as the basis of important decisions.
As per experts, the large accounting firms use data analytics for audits carried out for review and to facilitate better decisions. The accounting software’s available today makes it easy to interpret data and make better decisions based on that,
While things have not come to such a pass that computers make decisions on our behalf. Still, they indeed are facilitating them by organizing and presenting data accordingly. Data provided by businesses also lets accounting firms test audit information.
AI And Automation
Manual data entry, which used to be a staple part of accounting is on its way out, thanks to automation. AI is leading the wave of this automation, and together they are saving businesses several precious production hours. One should add that major accounting firms are already using AI to variable degrees.
The use of AI for accounting purposes is still undergoing development. However, many big firms have already invested significant amounts for crucial accounting tasks. Automation is making its presence felt in several aspects of accounting, like accounts payable even today, saving businesses $16 on every invoice they process.
The Sage report we mentioned earlier noted that 66% of accountants look forward to investing in AI tools. In comparison, a majority of 55% of all accountants intend to make use of AI in the following three years.
The value of AI and automation in streamlining and simplifying processes and operations in accounting, not to mention the time saved by AI, cannot be overlooked.
Smaller Businesses Welcome Cloud Accounting
The internet lets businesses enhance collaboration and share information in real-time. Cloud software works better at this than on-site hosted software. Cloud services are helping small businesses to scale with greater ease.
Cloud services let service providers access a large pool of data and suitable infrastructure at significantly reduced costs. This cost savings is particularly helpful for small businesses. In fact, by this year, it is predicted by the Accountancy Age that the overwhelming majority of 78% of small companies are going to depend solely on cloud technology.
To be quite honest, the prospect of on-site computing resources is more economical for the present moment for big firms. But considering the drastic changes we see, it wouldn’t take too much time for greater competitiveness and localization of the sector.
Through the outsourcing of accounting practices, businesses can concentrate more on the core area of their operations. By outsourcing the accounting-related tasks, companies stand to reduce costs and diminish the chances of fraud. Not only that, for small businesses, but outsourced accounting professionals remain accessible too.
The idea of outsourcing business-related activities is the better option for most small businesses out there that are not publicly traded. However, for mid-sized to large corporate houses, that is not ideal as they want data to be stored in-house and not shared with other entities unless required.
Using Social Media For HR and Customer Service Tasks
Like businesses, accounting firms need to reach out to potential clients through social media. Social media will give it access to a higher reach among potential clients. Of course, business transactions are unlikely to be conducted on social media. Still, for outreach and brand visibility, social media is a great option.
Not only clients but accounting firms also stand to benefit from the HR potential posed by social media.
The advanced technologies and other solutions arising in accounting are all for the better. Accounting itself stands to save time through them and make tasks in the field more efficient.