The always developing technologies and the advent of innovations in the world are boosting economic growth at a global level. Accounting trends, too, plays an important role in any business as well-organized accounting operations can provide accurate, relevant, and valuable financial information, leading to better business decisions and desired growth.
As ‘change,’ in this modern & technology-driven business world, has become essential for growth, CPA firms also need to become aware of the latest accounting trends, especially the firms that often reshape their business model and processes. Now, let’s get straight to the accounting trends that are emerging in the industry.
7 Digital Accounting Trends:
1. Switching to Cloud-based Software
Cloud computing has already made its place prominent in accounting. By adopting this impressively trending technology, you can establish your firm as a leading brand that provides up to the mark CPA accounting services. QuickBooks Online, FreshBooks, Xero, and Kashoo are some accounting applications
that are commonly used worldwide. 67 percent of accountants prefer cloud accounting (Sage Practice of Now 2018 report
It only requires a subscription agreement that allows you to store & access data, utilize inbuilt tools and features from anywhere. Asset management, expense claims, purchase orders, payroll, multi-currency accounting, etc. are some of the tasks you can easily handle with the help of cloud-based accounting applications.
The cloud technology allows your clients and employees (as per authorized subscriptions) to access data, resolving issues related to collaboration and exchange of information. Most importantly, you can increase or cut down subscriptions according to your business requirements, resulting in reduced maintenance costs. By 2020, 78 percent of small businesses will rely solely on cloud technology (Accountancy Age
2. The Adoption of Automation
Other accounting trends can be found with modern automation, which can transform the way work is done in the industry. With the involvement of automation, manual accounting practices are rarely found. As having a highly commendable level of efficiency, the 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 accounting professionals. 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.
AP automation can save $16 per invoice or more, depending on the size of your company (Vanguard Systems AP shocking stats). Accounts payable professionals who automate invoice capture and payments save an average of one hour per day (MineralTree). By 2020, labor-intensive tasks like tax preparation, audits, and banking will be fully automated according to a Forbes Study
. Thus, if you are still running your accounting firm following traditional accounting practices, now is the time to go automated.
3. Potential of the Internet
High-speed internet connections that are spread throughout the residential and commercial areas made the concept of video conferencing possible. Utilizing the internet at its best allows your bookkeepers and CPAs to have two-way conversations with colleagues and clientele. Many applications are there for face-to-face virtual interactions; they actually give a clear picture of what to expect in the near future – advanced features for live video conferencing.
This trend will ultimately help all industries to expand globally. CPA firms would also be able to provide services as well as support to clients across the globe. The number of internet users worldwide in 2019 measured 4.388 billion, up 9.1% year-over-year.
4. The Era of Millennial Clients
The future will see the young generation taking the lead in most aspects of almost everything. Many current and likely to be business owners are willing to go beyond standard business approaches and systems. Paperless accounting is the exact reflection of what young CEOs and accountants wish to see in the coming decades.
The era of millennial clients literally means that accountants need to handle completely different types of clients who prefer a greater level of proactiveness, enhanced operational transparency, and personalized approach. Today’s clients expect more than just the standard services from their accountants and CPA. According to Sage’s 2018 Practice of Now report:
- 67 percent of accountants feel that the profession is more competitive
- 64 percent of accountants reported that a top reason for adopting new technology was to promote efficiency, and 44 percent cited the ability to improve service quality.
5. Competition is Increasing due to Corporate Bookkeeping Firms
Since many third-party bookkeeping service providers have adopted the revolutionary accounting applications with automation features, CPA firms are likely to see tough competition in the market. Moreover, these services will also affect the firms that offer advisory services too. These days business owners prefer advises from someone who manages their numbers.30 percent of small businesses place accountants at the top of their list of trusted advisors (ICAS).
6. Changing Roles of the Accountant
About a decade ago, accounting aspirants needed to be experts in mathematics and have a complete understanding of laws and regulations concerning finance and accounting. While it is still essential, accountants these days are doing way more than their standard roles. For instance, communication skills are now as necessary as computer operating skills because clients expect them to be a consultant too, though at times. Even that fact is reflected in the trending accounting courses
- Some degree programs, nowadays, also cover communication and computer sciences apart from finance, accounting, and taxation.
- 70 percent of small-business accountants see their advisory roles becoming more strategic (PayPie).
- 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 have been making the profession more precise, reliable, secure, and cost-effective.
7. Social Media Platforms & Accounting Apps are becoming Prominent
A few years back, social media has up as unprofessional, but today’s CPA firms are utilizing social media platforms for multiple purposes. The platforms, such as LinkedIn, allow firms to market their services more broadly and keep connected with clients, colleagues, and partners. Such platforms also help you stay updated with the latest trends in the accounting
and business sectors
and how they make a difference in their work. It wouldn’t be a surprise for you that accountants use apps to manage their work. There are several apps, for example, time management apps, data conversion & data presentation apps.
The technology has not stopped here and provided applications to boost various accounting tasks, such as bookkeeping and tax preparation.
The number of social media users worldwide in 2019 hit 3.484 billion, up 9% year-over-year. 75% of B2B businesses market on Twitter.
The number of mobile phone users in 2019 is 5.112 billion, up 2% year-over-year.
Accounting Trends Conclusion
Similar to the general public, which is aware of the trending technologies and the advantages of their utilization, firms offering CPA accounting services should also become aware of all technological changes that are in the accounting trends.
Adopting the latest technology in the accounting world and obtaining full advantages from their impressive features will help you manage your CPA firm better.
In short, technology, in any relevant way, is becoming the top choice of most CPAs, CPA firms, and business owners.