Accounting is a systematic recording of business financial statements or transactions on a day-to-day basis. The accounting process includes analysing, summarising, interpreting, and reporting financial information. Accounting can be done by an individual or team depending upon the size of the business. It plays a vital role in running a business as it helps track incomes and expenditures while ensuring statutory compliance. Accounting also provides the necessary quantitative financial information to investors, management, and the government, which can be used as a base while making business decisions.
While accounting has contributed to the efficient running of the business, the recent developments in accounting have made it necessary for businesses to use several accounting tools and adapt to new accounting trends.
In this blog, we’ll discuss some of the modern accounting trends that every business should know.
Accounting Trends You Should Know
1. Automated Accounting Processes: Automating accounting processes has become a key trend in the industry as it eliminates/minimises errors. Since the process relies heavily on modern technology, it reduces the risk of data inaccuracies while providing superior data safety.
According to a study conducted by ACCA, over 50% of C-level executives in the accounting industry expect the evolution of automated accounting systems. In the coming years, it is believed to have the highest impact across several industries, enabling accountants to utilise data and optimise processes efficiently. Accounting automation also looks out to guide businesses in arriving at data-driven decisions faster than ever before.
2. Cloud-based Accounting Software: Cloud computing has become a popular platform for accounting services. Companies and firms can have access to their system anytime with cloud-based accounting systems; something that has worked well in favour of teams that have shifted to a remote work setup since the COVID-19 pandemic. Here, data access also includes tracking inventory, sales, and expenses. Plus, cloud-based solutions allow for the creation of workflows, which makes working simpler, saving businesses’ valuable time. Such benefits have successfully driven businesses to make the shift to cloud-based accounting systems.
With changing times, many companies are adopting cloud-based solutions for project management and client communication. This transformation could be related to the rise in the demand for advanced technological solutions from various industries; with the accounting industry being one among them.
3. Outsourcing Accounting Functions: Outsourcing has become a common phenomenon in various businesses. Outsourcing lets companies focus more on their resources and improvise their core areas, increasing profitability and efficiency. It also helps them save on employment costs like payroll, taxation, salaries, benefits, and training expenses. Hence, outsourcing accounting functions has gradually earned a valuable spot to become a popular accounting trend.
4. Blockchain: Blockchain technology needs to be understood by accounting industries for improvement and growth. The technology has already started to change the accounting sector by lowering reconciliation costs and maintaining ledgers. It also provides the needed accuracy concerning ownership and the history of assets. Blockchain technology enables accountants to gain a clear view of the available resources and obligations of the organisation. Hence, there is no surprise that several blockchain wallets are created monthly, a huge chunk of which belong to companies.
5. Cryptocurrency: In recent times, cryptocurrency has consolidated its position as a real alternative to fiat money, eventually becoming a legal tender that has brought in new opportunities globally. As digital currency begins to get more widely accepted, more people will need the assistance of crypto service providers to help them guide through the highs and lows of the market. Expertise in the field of cryptocurrency is a niche, so there’s a market gap that can be taken advantage of. Accountants must now offer support to new or existing clients who have the intention of participating in the phenomenon of cryptocurrency or are striving to understand the future implications of the trend.
6. Artificial Intelligence (AI) and Robotic Process Automation (RPA): Though Artificial Intelligence and Robotic Process Automation are different, they have many common aspects. Robotic Process Automation (RPA) is used to perform tedious, monotonous processes and enhance the efficiency of such operations. Artificial Intelligence (AI), on the other hand, is responsible for advanced analysis with logic-based techniques to understand and interpret problems and build relevant algorithms to provide solutions.
AI is said to be producing positive results in the accounting industry, especially in modern accounting. It is so because it allows analysing of large volumes of data at high speed. This helps boost productivity and generate more accurate data at a reduced cost.
7. Rise of Accounting Software Solutions: The adoption of accounting technologies is intensifying. Why? Because the demand for computerised accounting has seen a rise after the onset of the pandemic. Hence, modern accounting software today feature a range of functionalities that are highly valued by accountants, such as optimising processes and reducing manual tasks.
Further Reading: A Troubleshooter for the Chartered Accountants
8. Advisory Services and Data Analytics: The role of accounting and accountants has evolved over the years. Nowadays, financial service providers have the added responsibility of guiding businesses. They advise the business on investments, expansion, implementation of new and innovative ideas to improve efficiency, among others. The data that these financial departments handle is enormous and highly sensitive. This data needs careful handling with proper analysis and correct interpretation for the benefit of the business. Compliances and auditing are crucial here for the growth and long-lasting survival of the business.
9. Social Media Influencing: The power of social media is known by all. It is the best source to create brand awareness. The accounting services haven’t missed out on these opportunities either. They are also seizing the potential of social media to make their clients aware of their existence and the different services they offer. Besides creating awareness, social media also makes it possible to understand the competitors and ongoing industry trends.
10. Remote Work Setting: Employers these days face a tough time when it comes to finding top talents in accounting and finance. Therefore, it is more important to broaden their area of candidate search and hiring requirements. Today, candidates get to dictate certain terms of their employment, including flexible working hours and a remote work setting. Remote work culture is steadily being adopted by accounting leaders. With technological developments and the inception of computerised accounting systems, accountants working from home can produce excellent results, similar to those in office settings.
Further Reading: 5 Ways to Remotely Access Tally
Technological transformation is vital for every industry, and its effects have been noted in even the smallest business. The accounting industry is no different. The constant changes and trends in the accounting industry are needed to keep it stable and going. Hence, it is wise to embrace them.