The future of accounting is already here, and it certainly is not static. The fact of the matter is that technology in accounting has led to the financial transformation that businesses so desperately need to take a hold of if they wish to remain relevant and competitive. This being said, technology is ever-evolving and expanding, which means that emerging accounting technology should remain at the top of your mind as a leader in your business.
The reality is that there have been many changes in recent years regarding how people interact with technology in general. For example, mobile devices are now used more than desktop computers by more than half of all adults in America; this figure is even higher among children under 18 years old. Meanwhile, it’s estimated that over half of all Internet users will access their accounts through their mobile devices by 2020! In addition to this trend towards mobile usage being driven by consumers themselves, businesses are also embracing mobile technology—especially when it comes to accounting software solutions like Xero and QuickBooks Online (QBO).
These days it’s becoming increasingly common for business owners and managers to be using smartphones or tablets as their primary computing devices instead of laptops or desktops because they’re convenient.
Accounting Trends Affecting the Future
Automation software, data analytics, and other advances in accounting technology have helped to eliminate the need for manual and repetitive tasks that were previously time-consuming for accounting teams.
As a result of this shift, CPAs and finance departments have taken on greater roles that require knowledge, skill, and foresight to assist in key business decisions.
Here are some of the major trends to be aware of:
Big data is a powerful tool for financial analysis, but it used to be costly to securely store. On-premise databases were expensive and required a lot of maintenance. Now that cloud computing has come along, businesses can leverage the power of big data without having to purchase and maintain personal servers.
Furthermore, working in the cloud grants immediate access to important information and resources exactly when someone needs them. Cloud computing lends itself to continuous access to information so financial analysis can be performed on an as-needed basis without ever having to skip a beat or suffer from downtime in being able to access pivotal data.
Automation has become a powerful tool to help drive efficiency, reduce errors and free up your team’s time. Accounting automation can be applied to banking, payroll, and tax preparation, as well as account reconciliation and audits.
For example, you may have received a notice from your bank that they will no longer accept paper checks. To prevent the loss of customers and an increase in fraud, banks are now requiring that all payments be made electronically. This means that you must keep track of all checks being written by employees or customers and deposit them into your account electronically instead of writing them out yourself and depositing them at the bank branch.
This is where accounting automation comes in handy! The software tool can automatically calculate which checks need to be deposited into your account by scanning through each employee’s checkbook register or by matching deposits to invoices paid via electronic payment methods such as PayPal or SquareCash.
When you think of blockchain, you probably think of cryptocurrency and the buzz that surrounds it in mainstream media. But blockchain has so much more to offer than just cryptocurrency. Blockchain is a new way of storing information and verifying transactions that can help businesses keep their ledgers up to date without the risk of corruption.
Blockchain uses cryptography to store data in a way that’s secure, yet accessible for everyone who needs access to it at any given time. This means that accounting firms don’t have to wait for clients or employees to enter information into their ledgers; they can quickly access it from anywhere in the world through an internet connection.
Understanding is required when dealing with big data (insights). Data analytics is the practice of cleaning, transforming, inspecting, and modeling data in order to derive conclusions. These conclusions are then used to make the best business decisions possible based on the available information.
With massive amounts of data flowing into a business at any given time, it is critical to use software solutions capable of collecting and transforming data into useful dashboards and reports in a timely manner to provide more and clearer insights across the business.
This allows key decision-makers to leverage relevant information and review data in order to take more informed actions.
If you are an accounting leader, embrace the technological changes or for accounting services happening in the industry, and use solutions that give your finance teams more information and control to do their jobs better each day. Start with an overall audit of your current processes and search for simple ways to optimize both workflows and reporting. Bringing in new technologies can be exciting and humbling at the same time, but it’s essential to remain focused on why you brought them into the office in the first place—to empower your team to do more with less.