Today, ever-evolving technology has become an essential component of many business operations, including the accounting and finance sector. Technology has already changed manual bookkeeping, affecting how companies deal with cash flows, taxes, invoices, receipts, data management, bank reconciliations, payrolls and more.
While certain technical advancements in the accounting industry, such as automation processes, existed prior to the global pandemic, the majority of other trends emerged due to the disruptions it entailed. Consequently, accounting professionals must stay updated on industry developments and innovations in order to take advantage of them and adapt to provide the highest quality of service.
The article below discusses the most valuable accounting trends everyone in accounting should be prepared for in 2021 in order to stay on track and keep making profits.
Data Security
Data security is a critical aspect of accounting, as it is the foundation on which the company’s accounting operations are based. Moreover, data security concerns will increase in the cloud-based environment due to an enormous number of data breaches and other cyber threats from hackers that grows every year.
Technology is evolving at an unprecedented rate, changing the way companies manage their data and interact with customers. As a result, data security is vital for any business because it helps bolster customer confidence in the brand. Here are some ways to protect high-value commercial data, according to the experts from Bulletproof:
- implement a backup plan to ensure that data loss never occurs,
- keep up with technology by using the latest software and hardware,
- update data management system regularly and
- obtain a Cyber Essentials certificate.
Increased Accounting Automation
Accounting automation is undoubtedly one of the most significant trends in the accounting industry and a critical component of a business’s success now — it helps reduce business operations costs and improve efficiency. Accounting tasks that have been automated include accounts payable, accounts receivable, cash flow forecasting, cash and data management and much more.
In addition to automating repetitive or time-consuming tasks, this technology helps improve customer service and the company’s overall reputation. As a result, automation is a trend that should be implemented not only by accounting professionals but also by company management. It allows for a more efficient and effective operation, resulting in higher profits and a stronger brand image.
Cloud-Based Accounting Software
Cloud-based accounting software refers to accounting software that is accessible through the internet and does not require installation or maintenance on a local computer or server. According to this study from Deloitte and the Institute of Management Accountants (IMA), 36% of companies plan to implement or are currently implementing cloud-based accounting solutions.
Most cloud-based apps offer bookkeeping services that enable users to access all company data remotely — through desktop computers or smartphones and tablets — which has been proven highly beneficial during remote collaborations due to the pandemic restrictions. Furthermore, cloud-based accounting software also provides automatic back-ups and updates to ensure efficiency and security.
However, while this cloud-based solution has led to some significant advances in efficiency and cost savings, it could potentially affect privacy concerns because of the sensitive data it manages.
Artificial Intelligence in Accounting
Artificial intelligence, or AI, is the most recent technological advance that has taken the accounting industry by storm. Companies can apply AI and robotic process automation (RPA) to many different tasks, including data entry, document control and other mundane and time-consuming tasks.
AI can efficiently perform repetitive tasks, such as calculating taxes, analyzing financial data and providing insights into the company’s performance. This technology can also help business owners with their budgeting plans and forecasting income and expenditures, making it one of the essential accounting trends to consider today.
Data Analytics and Forecasting Tools
Analyzing the company’s financial data and identifying trends, patterns and key drivers has become an imperative skill for accountants and finance professionals, meaning they need to develop their skills in order to forecast future financial performance and take advantage of these trends. This is when data analytics and forecasting tools come into play.
The latest predictive technology provides a comprehensive overview of the business’s performance, helps accountants and finance professionals make more accurate decisions, and makes companies more proactive and analytical.
As a result, IMA has initiated a Data Analytics & Visualization Fundamentals certificate designed to confirm accounting and finance professionals’ strong technology and problem-solving skills.
ESG Compliance
ESG Compliance refers to the environmental, social and governance policies and regulations. These regulations require companies to take responsibility for how they manage their environmental footprint and ensure that they protect the interests of employees and customers. ESG regulations also mandate that companies follow high standards in how they treat investors and other stakeholders.
In January 2021, the Association of International Certified Professional Accountants released six more ESG trends that impact accounting and financial professions today. Among other things, these disclosures include increased demand for ESG reporting, CPA assurance services and increased diversity in recruitment strategies. The latter affects all business areas, including accounting departments.
Remote Workforce Management
Remote workforce management is another significant trend in the accounting industry, as more and more companies are opting to outsource key company tasks such as payroll, taxes, auditing and others. First of all, remote collaboration has been proven effective during the pandemic. In addition, It helps companies reduce overhead costs and allows them to hire employees from different parts of the world.
However, all accounting professionals need to be aware that managing a remote workforce will require understanding a team’s needs and expectations better. A boss needs to be more accessible to them and keep the lines of communication open. In addition, they will need to ensure that the workers have the necessary tools and equipment, a proper work environment, and that their work is clearly defined.
The Bottom Line
The trends mentioned above come into play in all aspects of the accounting process, from data entry and document control to data security and ESG compliance. These trends affect all types of businesses and their accountants — from startups to well-established firms.
The accounting industry is changing rapidly, so one’s accounting skills must continue to evolve with the times. By staying current on the industry advancements, any professional can take advantage of the latest trends in technology and ensure that they remain an expert on the market for years to come.
Phil Cord is a freelance content writer. He loves exploring new solutions and their impact on business. Currently, he works with a group of specialists fascinated by the broadly understood subject of work. Their areas of interest include topics related to the future of work, offices, technology in the workplace, HR specialists’ competencies, health, communication and a wise combination of professional and private life.
