While many like to say that the COVID-19 pandemic has “changed the way business works”, in reality, it is not so much a change as it is an acceleration of trends that were already taking shape over the past decade.
Back then, concepts such as accounting automation, third-party outsourcing and working remotely were fast on their way to becoming the universal reality. In March 2020 we blinked, and suddenly the near future was not so near. It had become our present.
The accounting industry was no exception, and accountants also quickly adjusted to the concept of working from home and took onboard a host of changes. Now that COVID-19 is very much a part of our daily lives (for the time being), it is natural to find its influence on business trends.
This article attempts to dissect the different trends that accounting firms, keen on staying ahead of the curve, must follow this year:
1. Almost everyone will move to the cloud
A vast majority of people across industries are working from home now, which necessitates the use of cloud-based software so that team members can continue collaborating as seamlessly as before.
Accounting firms that may have been resistant to move to the cloud earlier have now done so on a large scale. Many accountants, in fact, have stated that cloud technology would make their jobs easier even if the pandemic had not happened.
Data from Businesswire indicates that the market for accounting software is projected to grow at a CAGR of 6% between 2020 and 2024, mainly due to post-pandemic demand.
While Canada, the US and the UK are seen at the forefront of this growth, the adoption of modern technologies in countries in the Asia Pacific is set to play a massive role in the growth of accounting software companies.
2. Automation will become ubiquitous
The days of pen-and-paper accounting are long in the past, and the days of spreadsheet-style accounting are on their way out too.
New software that automates much of the day-to-day accounting is fast gaining popularity for its ease of use and cost-effectiveness.
For instance, IRIS Payroll automates payroll management, while FreeAgent, Xero, Zoho and various other accounting software enables invoice tracking with an integrated stopwatch for keeping time records. Dext on the other hand, automates receipt management.
The greater the degree of automation, the lower the risk of errors, the greater the efficiency of operations, and the more accurate the firm’s database will be.
3. More functions will be outsourced
Given that everyone has been working remotely for over a year now, accountants have seen for themselves that teams can function perfectly at a distance, which means that there is no need to limit all the nitty-gritties of monthly functions to in-house accountants only.
In fact, outsourcing certain functions to qualified and expert third-parties like Stellaripe gets the job done faster, is cheaper and frees up the accounting firm to take on new clients and expand their range of services.
4. Analytics will be leveraged for decision-making
People have been talking about data analytics applications for a while, and for a good reason. One of the by-products of accounting firms moving to the cloud is that large volumes of data can be collated efficiently and analysed for valuable insights.
Data analytics can help accounting firms track how a client’s finances are progressing, identify any excess costs or underutilised resources, and even develop forecasting models based on predictive algorithms.
Accounting firms that invest in data analytics sooner than later will be able to deliver better-informed decisions based on data rather than guesswork and thus stand out from the competition.
5. Accountants will move towards strategy roles
Opting for automation software and third-party outsourcing not only speeds up operations but also leaves accountants free to work in more strategic roles, such as studying history to make educated assumptions about the future or running simulations on forecasting models.
In other words, qualified accountants need no longer busy themselves with grunt work and can, in fact, move towards a more advisory role aided by inputs from analytics.
Advanced technological know-how, ability to build client relationships, proactive customer service are some of the advisory skills that accountants should focus on to deliver an outstanding advisory service going forward.
6. Blockchain will gain popularity
Worldwide spending on Blockchain technologies is predicted to touch around £11.46 billion by the end of 2022.
Distributed ledger technologies, or blockchain apps, have recently gained the attention of the accounting community and are likely to be used more widely now.
Blockchain allows accounting firms to track their assets more accurately and get a complete picture of their internal workflows, helping them be more efficient and thus bring down operating costs.
In particular, Blockchain can help audit a company, allowing the accounting firm to track all of the company’s resources and transactions from start to finish.
7. Social media selling will pick up the pace
Social media is not just for B2C marketers with trendy products. In 2021, accounting firms will require a social media presence to help them connect with customers on the platforms where customers are present.
From regularly sharing informative content on social media to running promotions on Instagram or LinkedIn, accounting firms will have to figure out the combination of activities that bring in the most leads and conversions.
Over to you
The future of accounting is here, and software is just the tip of the iceberg for innovation. Accountants who embrace these trends early on and adapt them into their strategies will be the first to see returns and win more clients. Are you looking to outsource? Your search is over. Visit our website to book a no-obligation call with us.