Technology has always been associated with development. Technology drives innovation and change in business and transforms industries. Technology makes business operations more effective and efficient and accounting trends for 2020 will have everything to do with improving business efficiencies.
Current technologies like the cloud, artificial intelligence (AI) and blockchain are changing the entire financial services industry. These technological advances are allowing accountants to have an opportunity to advance their roles as trusted, value-added advisers and analysts – managing data and interpreting it, rather than just working on tracking it.
Automated Accounting Processes
In an ACCA study, more than 50% of C-level executives in the accounting industry expect expanded development of automated accounting systems. Automation will continue to have a very high impact on several industries, meaning accountants will be able to utilize data and optimize processes for both small and large enterprises. Accounting automation will also continue to help businesses make more informed, data-driven decisions quicker than ever before with the help of insights obtained by their finance departments.
We can expect to see the adoption of technologically-driven solutions in the accounting industry intensify in the next several years. As the demand for cloud accounting grows, accounting software companies will develop even more robust solutions. Software platforms will be designed to offer a range of functionalities that optimize processes and minimize manual tasks.
Businesses are looking to outsource their accounting functions. Outsourcing allows companies to their resources on their core business and increase efficiency by relying on experts in support areas rather than hiring internally. It saves on a lot of employment costs including onboarding, training, payroll, salaries, taxation and benefits. These benefits alone are making outsourcing a popular strategy to gain a competitive edge.
Outsourced accounting services are one of the fastest-growing areas in the accounting industry. Outsourcing is quickly becoming an increasingly important method for CPA firms to deliver efficient services and greater analysis of business operations to their clients.
Focus on Data Analytics
Technology makes certain accounting tasks much easier, freeing up time to allow the accounting industry to shift focus from pure number crunching to data analytics. The role of the accountant is shifting to that of an advisor with a unique skill sets for analyzing data. Analyzing financial results helps businesses gain valuable insights that can help to identify process improvements, increase efficiency and improve risk management strategies. This analysis is also broadening out to include non-financial data and it’s impact of real world results.
Analytics is not new to accounting, but is finally starting to become a strong focus for the industry.It presents financial performance in a new light to provide actionable insights. While this has often had a role within management accounting, CPA firms are now finding the need to bring more analysis to the table along with their core set of services.
Blockchain is a relatively new development in accounting but it is a technology that is transforming the financial sector. Blockchain technology is already being used to lower the costs of reconciliation and maintaining ledgers. Blockchain technology provides a whole new level of accuracy in terms of ownership, transactions and history of assets. Blockchain makes it possible for accountants to get an unobstructed view of a company’s obligations and available resources.
It is interesting that the Big 4 in the accounting industry have joined the blockchain trend by participating in distributed ledger laboratories. Their participation is based on a desire to learn more about the technology and a hope that immutable distributed ledgers become a reality even if it results in making auditing and accounting obsolete. Blockchain has the potential to completely transform the financial industry, and is a key technology to watch.