Published on February 17th, 2020 | by Sunit Nandi0
Trends in Accounting Technology
It’s no secret that with every new development in technology, industries across the spectrum have to integrate, adapt, and quickly evolve. While 2019 brought with it new technological changes for finance and accounting, 2020 promises to thoroughly disrupt this industry. Here we cover some of the trends that are sure to shake up the world of accounting in the coming year.
In 2019, cloud computing firmly planted its roots within the accounting industry. Both small and large firms began integrating cloud software to improve customer relationship management, scalability, and easier technical support. In fact, according to an article on CPA Practice Advisor, “cloud-based systems rank as the most commonly used technology in accounting and finance.” This is indicative of the huge shift within the accounting sphere.
In 2020, cloud computing and its relevance in accounting will continue to grow, and even become the norm. Companies want access to their data anytime, anywhere — and cloud computing is the perfect solution service for that demand. It saves time, improves productivity, and gives the accounting world more accessibility than it’s ever had before.
Once an intimidating subject, accounting firms are now diving into Blockchain, trying to understand and integrate the technology into their own processes. Blockchain is going to be one of 2020’s most popular trends; not only because it lowers the cost of ledger maintenance and reconciliation, but it also gives one an unobstructed, accurate view of the history of assets and ownership. With the industry’s leading firms jumping onto the Blockchain trend, it’s safe to say the accounting field will see exponential growth in the use of this technology.
Mobile Invoicing Tools
In today’s gig-economy, small business owners, freelancers, and self-employed professionals are all looking for faster, cheaper, more efficient accounting. Enter the advent of mobile invoicing. With new and competitive mobile invoicing platforms, it’s become unbelievably easy for anyone to create an invoice with the device in the palm of their hand. Not only does this work well for users, but mobile invoicing makes payments much more convenient for their clients as well. Mobile invoicing cuts out the middleman and allows employees to spend more time and money on their business rather than on administration. Apps like Wave make invoicing a breeze for novices and experts, with easy-to-use customizable templates in different formats like Google Docs and PDFs.
But don’t mistake convenience for security. Because your mobile invoice or accounts payable app is likely to have reams of sensitive client data, it’s up to you to make sure your smartphone is secure. Back up data, use multiple forms of device security like passwords and PINs, and always make sure the operating systems and apps are updated. These precautions and others will help keep all your sensitive information safe.
Machine learning was all the rage in 2019. A computer’s ability to process information, recognize patterns, and forecast trends mean drastically reducing manual workload for accounting firms. As stated by Ohio University, “Auditors can use machine learning to either confirm or invalidate any exceptions after an entity’s ledger is automatically analyzed, after which the machine will learn from those conclusions and apply its new knowledge to future scenarios.” Ohio University also predicts that worldwide spends on machine learning will reach 57.6 billion dollars by 2021. With this in mind, machine learning is a definite trend for this upcoming year.
Although many wouldn’t think it, social media has had and will continue to have a major impact on the accounting industry. Firms and individual accountants alike are using social media to boost their sales and branding. From tracking trends and creating their own content to reaching out to potential clients on platforms like LinkedIn, social media has equipped accountants with the ability to network and create brand awareness like never before. Perhaps one of the reasons for this shift towards social media is that we now live in an era of millennial clients. As the younger generations start to take the lead in almost every aspect of business, we are likely to see more non-traditional processes and tools in the accounting sphere.
Big Data and Analytics
Big data essentially collects high volume data from digital channels and social platforms that can later be analyzed to map out your customer’s purchase journey, preferences, and needs. By knowing what your customer expects, you can up your retention game and make sure you’re there for your clients every step of the way. Big data with the help of analytics helps accounting firms stay relevant in the competitive world of today.
Research from Ohio University shows that four kinds of data analytics are making their way into accounting: descriptive analytics, diagnostic analytics, predictive analytics, and prescriptive analytics. Professionals equipped with data skills will use data analytics to help make key business decisions, predict and offset risks and identify anomalies from big data to provide their clients with actionable insights. Accounting firms would do well to prioritize big data and analytics for the coming year.
With new technology being introduced into the field every day, it is often overwhelming to find the appropriate solution for your accounting needs. Before you invest in software, take some time to consider what your needs are and which service satisfies them most. A quick guide by Techno FAQ notes the primary things you should consider are your budget, business support, and your own accountant’s opinion. As the accounting industry makes a cultural shift, technology will enable accountants to take on more advisory roles and boost a higher-level of productivity — a welcome change for everyone.