While 2020 was hailed as a year of new beginnings and futuristic movements, the sudden outbreak of a global pandemic has sent many businesses into reverse.
That said, it’s important to look ahead and get excited about what the future holds. Here at INAA, we’re passionate about the importance of trend analysis in accounting and finding positive lessons from difficult times to empower forward-thinking change.
Join us as we offer our expert insights on five of the hottest future trends in the accounting profession for 2021.
1. Embracing Cloud-Based Accounting Technologies
Did you know that 67% of accountants believe cloud computing will help them carry out their roles in the future?
The growing popularity of remote working across the sector triggers a need for cloud-based solutions that enable organisations to operate efficiently across multiple geographies. While most accountancy firms rely on on-site servers and in-house computing systems to manage sales, track inventories and store confidential client information, the cloud provides a flexible and secure solution that supports contemporary work habits.
The increased efficiency and accessibility of cloud-based systems can outweigh the upfront costs of transitioning onto the cloud and save valuable time across your organisation.
A recent accounting survey by the business cloud provider, Sage, revealed 53% of participating firms have embraced cloud technologies to enhance their project management functions and improve organisational communication. Crucially, the ability to manage huge datasets enables accounting firms to double down on detailed financial reporting and sophisticated data analytics — a fundamental component of modern accounting.
2. The Rise of Automation in Accounting
Automation is a defining characteristic of the fourth industrial revolution. Technological developments in artificial intelligence (AI), machine learning (ML) and Big Data provide a host of opportunities to streamline outdated processes and automate labour-intensive tasks.
While automation is often portrayed as a negative force that will displace jobs and threaten the culture of an organisation, many firms view the ability to accelerate mundane tasks as a queue to upskill their people and push employees to take on new challenges. In fact, a recent study by ACCA revealed that more than half of C-Suite executives believe automation will play a pivotal role in shaping the future of their accounting operations.
Whether it’s using Big Data to generate accurate forecasting models or completing tax returns in the click of a button, automation provides a valuable resource to help accountants make better decisions and deliver the best possible services to their clients.
That said, it’s important to recognise the risks associated with the increased reliance on computers. Your organisation must remain vigilant to online fraud attempts and set up the necessary protocols to safeguard your business against cybercrime.
3. Unlocking the Power of Blockchain in Finance and Accounting
The applications of blockchain present one of the most exciting technology trends in accounting. While there’s been an overwhelming focus on how businesses can use blockchain to track the movement of valuable assets along a supply chain, experts are beginning to explore innovative applications to streamline the accounting firms of tomorrow.
‘Blockchain’ or ‘Distributed Ledger Technology’ refers to the use of a network of independent computers to record, share and synchronize transactions into an immutable ledger. The core benefit is to string together a transparent and fully-trackable chain of events into a trustworthy database that can’t be altered.
The accountancy sector can embrace blockchain to track the ownership of assets and establish an unobstructed perspective over their internal workflows to maximise operational efficiency and stay within budget.
Crucially, forward-thinking accountants are excited about the use of Distributed Ledger Technology to conduct in-depth audits and improve the traceability of historic events. Whether it’s using smart contracts to break down administrative barriers or embracing oracles to feed real-life events into recorded chunks of data on a blockchain, this cutting-edge technology has the potential to fundamentally change the face of accounting.
4. Invest in Data Analytics
As previously mentioned, the rise of cloud-based computing and improved access to Big Data presents exciting opportunities for accountants.
Data analytics can help your firm collect valuable financial insights, identify operational inefficiencies, track clients progress and develop accurate forecasting models. 2021 will see more and more businesses embrace data analytics to inform their decision-making and differentiate the value of their services from rivals.
There will be an increasing demand for data specialists within the accounting sector to interpret complex datasets and capture valuable insights to advise businesses on the best steps forward.
2021 will also be a year of improved regulation and protocols for the responsible use of data for financial gain. Growing concerns over the collection, storage and application of sensitive data require organisations to review their internal processes and take steps to comply with the industry standards.
CEO at Altis Consulting, John Hoffman, explains how “The same tactics used by unethical companies to exploit data can actually be used for good purposes. We need to develop better standards of ethics when it comes to how we mine and then use data.”
5. Outsourcing Accounting Functions
The sudden spike in remote working throughout COVID-19 will trigger some of the most radical accounting employment trends in recent history.
While traditional accounting firms centred around cohesive in-house teams, there’s a growing appetite for outsourcing specific tasks and projects to third-parties. Outsourcing enables your organisation to take on new clients, offer a wide range of services, and fill important skill gaps for highly-technical projects.
In the wake on COVID-19, the potential for a global debt crisis means outsourcing could play an important role in supporting accountancy firms through difficult times. Instead of taking on full-time employees and incurring the costs associated with payroll and employee benefits, an outsourced business model offers complete flexibility.
Additionally, as more and more accounting service providers compete to white label their offerings to larger firms, hiring outsourced support will become increasingly affordable. Outsourced accounting service providers is one of the fastest-growing areas of the accounting sector.
As recent events trigger companies to rethink the way they operate, embracing remote collaboration platforms to facilitate an outsourced business model could pave the way for a new era of accounting.
Champion the Future of Accounting With INAA
INAA is an International Association of Independent Accounting firms, established over 25 years ago to facilitate cross-border business.
We believe in a collaborative approach to connect forward-thinking accountancy firms from across the world and share the latest industry updates. Our increasingly globalised world means it’s more important than ever to establish common goals and innovate as a united force for positive change.
We connect accounting firms who are committed to delivering quality professional services and sharing their expert knowledge with clients. Join today to champion the culture of accounting.