The accounting profession is shaped by changes in landscapes, technology, and other market forces. In what ways is the accounting industry changing? As a result of lightning-fast technological advances, the change is rapid and occurring at an accelerated pace. The pandemic has in many ways accelerated this adoption. A move toward automation and artificial intelligence, for instance, as well as the adoption of cloud-based accounting software. Read more to find out about the trends in accounting and accounting services for small business.
Technology and Automation
Is there anything new in the world of accounting? A trend toward automating repetitive accounting tasks is one of the most exciting developments in the accounting industry. In addition to approval workflows, bank reconciliation, journal entries, inter-company consolidation, revenue recognition, lease accounting, and depreciation, some processes are being automated.
Despite the fact that many accounting functions can be automated, a lack of understanding of the technologies and a lack of resources prevents their implementation. The benefits are being reaped by those who take the plunge. More than 70 percent of companies with automated accounting functions report moderate or substantial returns.
Role of Artificial Intelligence (AI)
It is widely agreed that AI can and will have a significant impact on finance and accounting across industries. Artificial intelligence (AI) and robotic process automation (RPA) are allowing companies to automate mundane, highly repeatable tasks, freeing accountants to focus on higher value activities. In an effort to simplify the process of capturing information quickly on commencement date, amount to be paid, termination or renewal options on lease contracts, EY, for example, applies artificial intelligence to lease contracts. As a result, finance professionals spend less time searching for data and more time making decisions.
In order for RPA to be successful, transactional data needs to be standardized and merged from multiple sources in multiple formats. An integrated system can combine structured, semi-structured, and unstructured data. To be effective, AI requires a large amount of data. All enabling technologies must, above all, be trusted by accountants. Software for accounting can help with that.
Cloud-based accounting solutions are expected to be implemented by 36% of companies in the near future. Accounting software and financial data can be integrated with other important areas of your business, such as supply chain, order and production management. By integrating these different areas of your business, an integrated ERP platform gives you a more actionable view of your operation.
Data Analytics and Forecasting Tools
Increasing the use of budgeting, forecasting, and planning software, as well as data analytics and visualization tools is one of the most effective accounting tips for small businesses and larger companies. The accounting and finance department is becoming more analytical, relying on technology to move from a reactionary and transactional to a proactive and analytical approach. Recently, the IMA introduced a Certificate in Data Analytics & Visualization Fundamentals to meet the demand for increasingly analytical and tech-savvy accountants. In order to meet business strategy objectives, the program equips accounting and finance professionals with strong critical thinking, problem-solving, and technology skills.
Accounting and finance teams have been at the forefront of transforming organizations’ business practices faster than perhaps ever before with the aid of digital technology. As a result, they have developed processes to account for new revenue streams from subscription models, new channels, and new physical and digital product offerings. The most pressing accounting challenge is to leverage technology to support the business strategy and adapt to changing conditions.
In addition to being a popular perk provided by employers, workplace wellness programs can also be complex to manage for accountants. For example, payroll managers and accountants must ensure wellness program discounts are calculated correctly as withholdings in employees’ paychecks. It is also important for accountants to take note of changes in tax laws that impact how wellness program items qualify for tax deductions. Wellness programs can be useful tools for employee engagement as well as boosting employee health. A high rate of burnout and stress is reported among accountants due to too many responsibilities, and they should use programs whenever possible to mitigate these issues.
Online Collaboration and Remote Workforce
With the trend of remote working, cloud-based software enables teams that are physically dispersed to collaborate and accomplish critical financial processes, such as month-end close, from anywhere with an internet connection. Collaboration tools for e-signature and cloud-based file sharing will be needed in accounting, such as Zoom, Fort, and functional collaboration tools like Fort.
Evolution of the Accountant Role
Accounting’s transactional work will become increasingly automated, and accountants will be seen as leaders and decision-makers. It is becoming increasingly necessary for accountants to possess soft skills, leadership qualities, and other traits related to emotional intelligence. The combination of these skills and training to leverage insights from data analysis and financial expertise will make for successful careers in the future.
There are more data breaches than ever, and finance departments are among the most vulnerable. Spoofing is when emails are disguised to appear to come from a trustworthy source, which can lead to identity theft and credit card fraud. Accounting teams, who are already skilled at reviewing details and spotting anomalies, will continue to benefit from training on recognizing potentially harmful emails and spotting attacks. In your organization, the accounting team can share the importance of cybersecurity and become champions.
Changes in Tax Policy
Accounting professionals have their work cut out for them with nearly 6,000 pages in the latest Consolidated Appropriations Act. It’s the latest in a string of changes to tax policy and regulation, including tax extenders, PPP expense deductions, second-draw PPP loans, and simplified procedures for PPP loans under $150,000. Understanding tax policy changes is essential for navigating shifting trade and tariff policies and understanding total tax liability.