Top 5 Accounting Trends that You Need to KnowKapil RANA
Today, the global accounting industry is in the age of huge transformation. The entire accounting sectoris within the impact of automation and advanced technology. Complying with the new trends is no doubt a challenging task for accounting professionals but it is equally inevitable as well.
To stay ahead of the curve, one needs to keep pace with the latest technology trends that are creating adisruption in the accounting world. Since these trends are shaping accounting for the future, more opportunities are being garnered for businesses of all nature and sizes.
Here are some of the accounting trends that are expected to be witnessed in the near future. Some of these trends already have started creating a niche for themselves in the industry. These trends will shape the future of the accounting industry amazingly. Hence, embedding these would prove to be a turning point for your business is a sure thing.
Trend #1: The Rise of Automation
Automation is bringing about sweeping changes in the accounting industry. It has made manual accounting practices bid an adieu. The automation techniques get the work done a lot quicker and the efficiency level is highly commendable. It simplifies the provision of a wider range of advisory and support services.
The best part is automation will open up a wide range of opportunities for the accounting professional. This will enable them to stay more focused towards areas like developing KPIs, budgeting for growth, and assisting in improving cash flow.
Hence, this necessitates the use of advanced automated software in organizations. Automation cuts bookkeeping time by half because cloud accounting software automates 80 to 90 percent of transactions. So, if you haven’t started using automated accounting software, it’s high time to switch.
Trend #2: The emergence of Artificial Intelligence (AI)
Artificial Intelligence (AI) enables computers to act like humans and directs it to perform the assigned tasks exactly the way it wants. Due to AI, accounting software is now getting smarter by performing analysis and drawing conclusions automatically at the drop of a hat.
In addition, cognitive computing has made it possible for accounting practices to gain enhanced insights into a client’s financial and business operations. Machines making use of cognitive computing have taken over the mundane and repetitive tasks. The processes like bank reconciliations, auditing, and invoice categorization can be systematically automated.
Trend #3: Big Data Analytics
The process of consolidating large sets of data through condensation and collections is known as big data analytics. It allows businesses to rapidly have access to important sets of data. Furthermore, big data analytics paves the way for identifying significant trends and making valuable interpretations from these data sets.
An organization garners data from a number of platforms such as social media, emails, smartphone applications, customer orders, and the like. Each day data grows by 2.5 quintillion bytes, continuously creating new challenges. And, this is where big data analytics comes into the picture. It allows for a reduction in cost as the tasks which previously took weeks to get processed might now take even less than an hour. If the mid sized organizations don’t incorporate this accounting trend into their current accounting practices, chances are that they would get wiped out of the market.
Wondering how would it help the accountants? Well, for the accountants, big data analytics would mean providing top notch insights to their clients. Big data is also capable of predicting financial risks which may otherwise be missed out by the professionals.
Trend #4: Blockchain Technology
Another accounting trend that is transforming the accounting industry is the blockchain technology. It drastically reduces the time spent on verifying and confirming account balances. By implementing this accounting trend, an organization can put an end to illegal practices like data manipulation. Blockchain seals all the entries cryptographically making it difficult for a person to falsify or destroy the same.
The auditors will heave a sigh of relief as large sets of data related to financial statements will be automatically verified. Consequently, this will reduce the time required to carry out the auditing process. This will also enable accounting firms to explore the untapped markets.
Blockchain technology can also redefine the bookkeeping processes. The transactions between the debtors and creditors will be automatically recorded on the blockchain network and on their private accounts simultaneously. This fosters transparency in the processes.
Trend # 5: The Age of Cloud
The birth of cloud based technology has greatly influenced the traditional language of accounting. It has brought massive changes in its initial stage itself. Today, cloud based advanced software has enabled accounting professionals to access and manage their account anytime from any corner of the world. Thus, it saves time up to 80% of the compliance time spent on accounting. Cloud also provides a great degree of protection to your data. Simply put, it safeguards your data round the clock against data theft or cyber crimes.
Additionally, you can scale your resources up and down as per your business requirements. This drastically reduces maintenance cost.
Technology is undergoing rapid changes in almost every industry. Small and medium sized businesses thus have to gear up themselves for the upcoming major technological changes. The accounting trendsmight pose some challenges for accounting professionals. However, the accounting professionals must understand that these trends would not jeopardize their career but provide them with endless opportunities to grow. It will redefine the role of accounting professionals in a way that is far more lucrative andvaluable to their clients.
Accountants need to keep themselves updated on the latest trends for harnessing the available opportunities. Accounting firms must also ensure that the skill sets of their employees be more analytical in approach as repetitive, redundant, low value added services will eventually disappear. Hence, businessesshould not miss out any opportunity to automate existing accounting processes that are exhausting and time consuming.
With the rising importance of the latest accounting trends, the accounting industry is now gradually moving towards “Accounting Intelligence”. In a nutshell, the accounting industry is ready for the biggest leap in history.