7 Key Trends That Will Reshape Accounting in the Future
Everybody understands that there have been a lot of changes in the past couple of years that lead to the reinvention of previously used business models. As we move forward with the times, it is important for companies to continue to embrace new challenges and find ways to prepare for the future. Below are the combined thoughts of industry leaders over the past few months on what they expect for accounting in the future. We’ve assembled seven key trends that are important to driving digital transformation in accounting and finance.
1. The cloud is here to stay
One thing we can say with more certainty is that the cloud is here to stay. Small and medium businesses will continue to leverage cloud infrastructure and apps to fill in functionality gaps. With cloud computing, companies and firms are able to access their system anytime, anywhere, as long as they have a device that supports web browsing. This has proven to work well for teams that shifted to remote work since the COVID-19 pandemic began and will most likely continue as businesses move back into offices, adopt a hybrid model, or continue to work remotely.
Data access through the cloud can include tracking inventory, sales and expenses, and the creation of workflows, saving businesses valuable time and money. New and replacement technology buyers will seek cloud accounting software that include easily accessible data, as well as incorporate automation and analytics. The uncertainty of the past two years and ongoing cybersecurity threat levels will continue to keep reliability and security at the top of the list when accounting and finance leaders consider technology.
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2. The labour crunch is accelerating the use of automation in accounting
Automation will be a key trend in the accounting and finance industry. If it can be automated, you should consider automating it in 2022. The current labour shortage means it’s vital to make the most out of the staff that you have. Emphasize on investing in upskilling your existing staff to meet new demands and implementing technology that makes your business more attractive to new hires. Automation has shifted from being seen as something that replaces work, but as an extension of the employees you have. Automation can increase productivity and efficiency and reduce errors while also streamlining your team’s processes.
3. Accounting Artificial Intelligence will continue to grow, even in industries late to digital transformation
AI adoption will accelerate in accounting in the future and continue to drive industry transformation. AI can analyze large volumes of data at high speeds and increase productivity while generating more accurate data at a reduced cost. These are some of the many factors that accounting software developers will invest in. From automating routine tasks to putting tactical solutions into the back office, there’s no end to how AI can drive efficiency and boost productivity in the future.
4. Outsourcing accounting is becoming more common, driven by cloud accounting and talent wars
Speaking of labour shortages, over the last several years a shortage of qualified people and the inability to leverage accounting automation software has made the economics of outsourcing more attractive. Small and midsize companies are increasingly looking to outsource all or part of their accounting function, either because they cannot garner the talent they need or retain their current staff. Outsourcing allows businesses to focus more on their limited resources, increasing profitability, and saves them employment costs like payroll, taxation, salaries, benefits, and training expenses.
5. Analytics, action, and storytelling will continue to converge with data automation
Investment in analytics will continue as companies seek to maximize their ROI. In the upcoming years, what will put some businesses on top will be their use of accurate analytics to make their decisions and pivot directions. Being able to put information into action will be key. The finance leader’s role will increasingly include working in other areas of business and leveraging data held by their finances to add insight, drive efficiency, and increase profitability.
6. Blockchain adoption continues while cryptocurrency is still met with caution
The use of blockchains will continue for finance and accounting in the future, but blockchain-based cryptocurrency will be met with extreme caution, especially in the consumer arena. Adoption of cryptocurrency will be slow but steady. Business-to-business cryptocurrency applications will begin to go mainstream as businesses continue to increase payment methods and seek to diversify. However, bank and wealth asset management firms will proceed with much more caution until policy makers provide more regulations and guidance.
Jeremy Almond, CEO and Co-Founder of Paystand says it best, “While we may not get all there way there in 2022, the march toward paperless finance operations, the decline in use of paper checks, and the concomitant need for better financial data security is surely leading us toward the adoption of more of these block chain-based technologies.”
7. Pace of new accounting regulation implementation will continue to be affected by the pandemic
Regulators are slowing the pace of new regulations to allow businesses to react or recover from the pandemic. This means delayed implementation dates and few new accounting regulations published. As covid moves to an endemic nature, it is expected that there will be new regulations, particularly in areas that have seen growth or innovation as a result of the pandemic.