Accounting Trends to Shape the Industry in 2020

In the past decade, the accounting industry has evolved tremendously.

Technologies like SaaS have prompted the industry to adopt cloud-based software and nowadays, the industry consists of teams empowered by technology.

This landscape is changing to a place where accountants and bookkeepers no longer need to manage data entry, but instead, they are performing roles of strategic business advisors.

In this article, we’re highlighting the key trends that will shape the industry in 2020, from emerging technologies to data-informed teams and the ever-changing roles of accountants and bookkeepers.

The Continuous Rise of Cloud-Accounting Software

According to Business Times, accounting is experiencing more disruption than ever before. Manual or repetitive tasks are starting to be replaced by automation and machine learning.

And with the rise of technological applications in the workplace, there is an increase in demand for talent who can bridge data, technology, and accounting functions.

It’s a fact that traditional accounting services will not go away anytime soon but they will continue to evolve as there are now more cloud accounting and bookkeeping apps than ever.

The trend we see is going towards implementing best-in-class solution to build a cost-effective and advanced decentralized accounting and operational infrastructure.

In the past, the limitation to this configuration used to be the integration part, but today, we see the need for companies to create seamless flows across the board — from tapping on business process automation to better integration between accounting systems, ERPs and other solutions.

By 2020, 78% of small businesses will rely solely on cloud technology. — Accountancy Age

The accounting software market will experience a higher level of growth in the years ahead, according to a report by Fortune Business Insights.

All over the world, there is a strong demand for software platforms to replace spreadsheets and have a better understanding of tax management.

FinancesOnline states that the adoption of modern technologies in the Asia Pacific will also drive the growth of accounting software companies.

Today, the Xero marketplace lists over 700 accounting apps, from reporting to bills and expense management, while the QuickBooks App Store highlights over 500 accounting and advisory apps on its system.

Building the right tech stack can have a great impact on your company. Whether strengthening relationships with clients or helping you grow your businesses with real-time data, your tech stack can be the ultimate toolkit.

The adoption of technologically-driven solutions in the accounting industry will intensify even more in the upcoming years. As the demand for digital accounting grows, accounting software companies will address this need with better solutions.

These software platforms possess a range of functionalities accountants value the most, such as optimizing processes and minimizing manual tasks.

Data-driven teams

As technology enables accounting tasks to become easier, the industry will continue to shift its focus to data analytics.

Today, it’s not uncommon for accountants to take on new roles as advisers, with unique skill sets that revolve around analysing data.

Analysing data helps businesses come up with valuable insights, which enables them to identify process improvements as well as increase efficiency and manage risks better.

Although analytics as part of accounting services is not entirely new, it is becoming now more powerful, presenting financial performance in a new light with better and actionable insights.

Larger accounting companies apply data analytics in tax, consulting, risk management, and auditing.

Meanwhile, accountants in organizations are utilizing the capabilities of topnotch data analytics solutions to support and solve industry-related requirements.

AI-Enabled

Artificial Intelligence (AI) is known to produce positive results in the accounting industry.

While automated and cognitive technologies such as Artificial Intelligence, robotics processing and predictive analytics will assume a growing portion of the manual work accountants perform, we’re still a long way from a day when robots analyse data with a logic structure similar to how humans draw conclusions.

But the importance of AI in accounting is growing more steadily as it optimizes admin tasks and accounting processes that result in various structural changes. AI provides vast opportunities for accountants and a new level of efficiency for workflows.

It also allows analysing large volumes of data at high speed, as well as increased productivity and generating more accurate data at a reduced cost.

The Sage Practice of Now 2019 report reveals that about 66% of accountants would invest in AI. Also, 55% of them see themselves using AI in the next three years.

These figures show that AI is transforming the industry. However, experts do not see AI replacing human roles entirely. Instead, AI will be assisting human decision-making and empowering more in-depth analyses.

Adopting Automation (While Staying Human)

As in many industries, automation also has the power to transform the way work is done in the accounting industry.

One thing that small business owners don’t always have is time. Part of the reason is that they’re busy following up on late invoices that haven’t been paid and other manual processes that need to be dealt with.

Accounting automation platforms allow accountants to skip the mundane tasks of accounting such as dealing with invoices and bill charges. With more accounting tasks being automated, accountants will find it easier to access and utilise data from technology and apply it to real businesses decision with more speed than ever.

Understanding how to save time is useful for accountants to understand so they can keep up with customer and business demands.

What’s more, with automation, manual tasks within accounting will be greatly reduced. Besides having a high level of efficiency, automation technologies can complete a variety of accounting tasks on time.

The best thing about automation as a feature is that it brings a variety of opportunities to accountants and other professionals.

According to Quartz, “Not only haven’t we reached our full potential, but AI can help us reach higher. The debate between artificial intelligence (machines replace us) vs intelligence augmentation (machines help us) has been raging for decades. One side wants to engineer humans out of the equation, while the other thinks the role of machines is to help people perform better.”

Taking the most basic accounting aspect as an example — bookkeeping time can be reduced to half as most cloud-based accounting applications automate 80–90% of transactions.

By 2020, labor-intensive tasks such as tax preparation, audits, and banking will be fully automated according to a Forbes Study

So if you are still running your accounting company following traditional accounting practices, now is the time to improve how things are done.

The Changing Roles of the Accountants

The accountants’ roles are rapidly transforming partially due to the productivity optimization available through new technologies.

Today’s accountants should no longer be burdened with manual tasks.

Instead, thanks to accounting software and automated software for processing documents, the role of the accountant is changing to that of a business advisor.

What’s more, the modern accountant will always become more of a business advisor who requires new skill sets, including critical thinking and professional skepticism.

For instance, communication skills are now as necessary as computer
operating skills because clients expect accountants to act as consultants as well. This is reflected in an array of accounting courses that are available to upgrade your skills.

These skills are a high priority to accounting companies when looking at new candidates. While the profession is rapidly changing due to new technologies, the need for these types of soft skills is constant.

The following four key areas need to be mastered to enable organizational success and ensure growth and influence in accounting.

•Data — Accountants can tap on data more and create models beyond the traditional financial accounting models. Such models allow the monetary impacts of strategies, tactics, and decisions to be analysed and adjusted in real time.

•Technology — Accountants need to be tech-savvy and invest time to learn using technology and digital tools, ensuring that projects are implemented rapidly and effectively across the board.

•Skills — Accountants require a broader range of knowledge, skills and experience to improve business partnering and become more hands on with the operational resources and processes. The future will place an increasing premium on diverse experience, interpersonal and leadership skills, as well as technology, analytical, and data skills. Developing these skills will require changes to recruiting and career paths in finance.

•Mindset— Accountants can gain new perspectives when the leadership allows, facilitates, and encourages change.

Some Statistics from G2

• 70% of small-business accountants see their advisory roles
  becoming more strategic.
• 67% of accountants prefer cloud accounting (Sage Practice of Now 2018)
• Technology has transformed several aspects of the accounting business, training modules, and majorly the traditional image of an accountant.
• Technological advancements in the accounting industry are
  making the profession more precise, reliable, secure, and cost-effective.
• 66% of accountants would invest in artificial intelligence (Sage Practice of Now 2018)

Final Notes

Old mindsets associated with internal control and financial reporting, and auditing can’t completely disappear, but new mindsets focused on collaboration, innovation, and creativity must be actively encouraged and rewarded.

The lines between accounting and technology are overlapping so it’s not surprising that organisations are looking for people who are not just skilled in accounting but also have technical skills — or at least a certain level of drive and curiosity about working closely with technology.

Showing a willingness to learn new solutions and help others do the same is critical.

How to get started? Make time for training that is offered even when it seems to interfere with your daily tasks. Learning new skills may save you time in the long run.

The facts are real: accounting can have a positive impact on the financial health of your company, save you plenty of time and improve your processes and cash flow.

So to stay competitive, bookkeepers need to be aware of how the space is rapidly changing to adapt to new technologies.