Finance and accounting professionals will have spent much of 2020 grappling to meet new challenges head-on, but in 2021 CPA firms must be primed and ready to execute long-term strategies so that their organisation continues to scale and maintain profitability.
The emerging trends in finance, and the opportunities that accompany this new year, require both your accounting team’s time and attention to ensure success and growth.
Continue reading to discover future trends in the accounting profession in 2021.
One of the silver linings to come out of the COVID-19 pandemic is that it’s shown just how well financial organisations can operate with remote workers. Thanks to a combination of emerging technologies and digital accounting, CPAs working remotely can still deliver a top-quality service for their clients.
Even with an increasing number of accounting organisations growing comfortable with the idea of having their staff permanently continue to work remotely, firms have to consider cyber security measures to avoid costly data breaches.
From handling financial records to analysing data, many aspects of accounting work is digitised, meaning it can be done online and from any location. Whether from home or the office, accountants will remain responsible for helping clients strike a sustainable and cost-effective balance into the future.
Even before the pandemic, ESG gained newfound focus in modern organisations — and for good reason.
ESG reporting helps companies fulfil consumer mandates for more corporate responsibility, while also working as a critical metric that delivers greater levels of organisational risk mitigation.
Not only has the focus on sustainability and ethical issues continued to sharpen inside company board rooms, but the growth of responsible investing has also grown in popularity among external investors. ESG criteria have become a decisive element for key stakeholders looking to measure business performance. This means it’s vital for companies to quantify their ESG efforts.
Tomorrow’s accountants must combine their technical skills with professional, ethical standards to meet social and environmental challenges head-on. Learn more about how accountants can better measure ESG performance.
Going into 2021, successfully implemented automation has already helped more than 91% of companies improve compliance.
Not only that, but by using new automation technologies, accountants don’t have to spend as much time, energy, or resources on painstaking manual tasks involving spreadsheets or number crunching. Thanks to automation, CPAs can dedicate time on value-adding tasks that require human-to-human interaction or careful analysis.
The main reason that automation is here to stay is because of its role in enhancing human accountants. Automation can eliminate confusion, minimise errors, reduce time-wasting and make slow-moving processes a thing of the past with higher productivity levels.
Technology trends in accounting go beyond automation too. The cloud is fast-becoming a popular choice for accounting firms due to its ability to better allocate digital resources and reduce the need for physical hardware.
Linked closely to the emerging trend of remote working, firms have access to their system at any time from anywhere thanks to cloud-based capabilities. CPAs are no longer bound to internal networks or far-off data centres.
Going into 2021, accounting firms must innovate and embrace digital transformation. Cloud-based service providers support accounting firms by assuming responsibility for any software updates or system integration, giving internal IT teams the time to focus on more strategic tasks.
Across the globe, the rapid move towards digital payment adoption is changing the face of payments. The knock-on effect is a shift in the financial landscape for accountants.
A report by Accenture expects nearly 420 billion transactions to switch from cash to digital payments by 2023 ––and continue to grow to around $48 trillion by 2030.
While technology makes it much easier for end-customers to outsource payments, and for accountants to take those transactions into account, the rapid move towards digital payments puts additional pressure on banks.
In fact, the same Accenture study also concluded that 75% of bank executives claim COVID-19 has increased the urgency of their plans to modernise payment systems –– demonstrating the massive shift first-hand.
Digital business payments stand to eliminate any unnecessary back-and-forth of manual invoice processing, while saving significant time across the entire operation. Digitising payment processes slashes accountancy labour costs.
Another trend we will see during 2021 is the growing number of corporations and consumers moving towards blockchain-based modes of transactions and financial services.
Today, more than ever before, financial clients have non-bank service options delivered by emerging fintechs and cryptocurrency alternatives. By 2023, worldwide spending on blockchain solutions is predicted to grow to around 16 billion.
Across industries, businesses have an appetite to reap the benefits of distributed ledger technologies. A financial system underpinned by blockchain offers manyopportunities for the accountancy profession in the near future. Learn more about Essential Blockchain Skills For Accountants of the Future.
Data analytics is also anticipated to make waves in the accounting sector along with cloud-based technology and automated accounting. As a direct result, the demand for data specialists will sky-rocket.
It’s nothing new for accountants to use data analytics to help their clients uncover valuable financial insights and identify process improvements that can increase efficiency or help companies to manage risk better.
Data analytics’s value lies in its ability to give organisations a much clearer handle on their performance to facilitate better decision-making. Through a combination of high-quality data and comprehensive accountancy reporting, organisations are best-positioned to perform better financially.
Look Ahead to a Brighter Year with INAA
We’re the International Association of Independent Accounting firms, established over 25 years ago to facilitate cross-border business.
Here at INAA, we connect accounting firms who aim to deliver quality professional services around a shared vision to make global business personal and take personal business global. Our collaborative association of international businesses is committed to being a part of the conversation around new industry trends.
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