We will remember 2018 as the year when technology-dominated accounting trends around the world. The revolutionary takeover of technology has revamped the accounting world. What seemed impossible before is now considered realistic and achievable.
The business world is witnessing a change in the environment, especially in terms of the decision-making mechanism. The move to paperless accounting, the automation of accounting tools, and the introduction of accounting software has led to increased efficiency in businesses.
The creation of cloud accounting, which enables users to save important accounting data, has played a crucial role in getting rid of one of the significant disadvantages of manual accounting, which is data security.
The users of digital accounting are quite pleased with the change in accounting trends. The change in the accounting systems has so far been welcomed with open arms by owners of small businesses and companies. How are we so confident of the welcome the accounting system has received? After all, we need to account for the many traditionalists in the accounting world who are not yet ready for change.
It’s a long-standing fact that numbers don’t lie. According to some projections, by 2026, the accounting world will be of $11.8 billion in value. This prediction makes sense given the fact that there is a 24% increase in people using the cloud-based accounting software platform Xero. Additionally, an increase of 41% in the online subscribers of QuickBooks further elaborates this claim.
All indicators are a testament to the changing times and how well the accounting world has adapted to the change in the standards.
However, as entrepreneurs, it is imperative to predict the trends for the current year. We already hear of innovative ideas and changes from other parts of the world. For example, the UK has called for the digitization and the automation of the taxation system which will make paying taxes a lot less difficult for companies.
Many might argue that predicting in the fast-paced environment, which faces a change at every nook and corner, is difficult. However, keeping in mind the few key trends that have surfaced in the past couple of months, here are the ten accounting trends that we feel will affect businesses around the world.
1. Cloud-Based Tools
The shift to a cloud-based interface has led to great success and increased efficiency for many businesses. Cloud-based tools have now become a regular feature in many companies and calling them a new trend is unfair.
Cloud-based tools offer the businesses an option of storing and saving their relevant accounting data on an online platform with remote servers. Therefore, a company that avails digitized accounting services will now aim at keeping their accounting data on a more secure server rather than on their personal computers where the accounting data stands the risk of being wiped out.
Given the rising demand for cloud-based storage and the updates the servers are going through to meet this demand surge, we expect the following changes in the cloud-based tools in 2019.
As discussed before many accounting firms are moving their data to the cloud. With a rising number of firms now taking the route for automation, cloud providers are now aware of the need for stringent regulatory methods and the need for protecting the sensitive data on their servers.
Accounting organizers will take preemptive measures to safeguard against data theft, hacks, and violation of privacy. Central banks and regulatory bodies might take steps and pass laws imposing strict actions against sources that breach vulnerable data.
With the emphasis on security, the primary task of all accounting firms will be to prioritize data security while dealing with consultants. With the need for following accounting measures, accountants will look to take crucial steps such as achieving Cyber Essentials accreditation which will give their client confidence when dealing with them.
Previously it was only possible for cloud users to access their information from only one location. However, with the advent of the gig economy, it is now easy for consumers to access their stored data from any location in the world.
This feature will become increasingly popular for big firms, as they will now have the option of making immediate changes to their data.
One thing that already is a primary feature of automated data storage is cost saving. A company will no longer have to spend money on developing an accounting framework or infrastructure. The automation of the cloud system means that a company will not need the services of a professional to manage their data manually.
A reduction in accounting and the operating costs of a business is significant for the growth of the business. Rather than spending on operating software and accountants, a business now can spend on other crucial features of the company.
Considering the accounting trends and the growing popularity of cloud-based accounting, it is safe to assume that small companies will also adopt cloud computing technologies in 2019.
2. 2019: The Year of Big Data Analytics
The term ‘big data’ is very common in the financial world today. In addition to simplifying measures and processes for a business, big data is responsible for ensuring that users have access to a vast amount of data at any time.
The data and the numbers are used for analytics primarily in other firms,
reporting, budgeting, and forecasting are some key factions where we use the data. In addition to helping the top hierarchy in making crucial decisions, big data will also help in making everyday decisions and keeping track of revenue and expenses.
Therefore, similar to the developments in 2018, we expect the trend of using big data as a primary tool in making important decisions to continue.
3. Availability of More DIY Software
With the rising levels of technology, the accounting world has witnessed a surge in the levels of DIY software. The technique can play a crucial role in changing the position of accountants.
The increasing automation has led to increasing levels of uncertainty among accountants. Many accountants fear that the profession may become redundant with the rising demand for online accounting. However, this is not the case. Upon reviewing the accounting trends of the last couple of years, it is safe to say that, rather than being redundant, accountants are moving towards a different role.
With this change being unavoidable, many accounting professionals are expected to join as advisors for accounting companies that offer DIY tools to their customers. Other firms will also look to outsource these DIY businesses to make use of obtaining excellent value for their money.
4. Further Advancements in Block-chain Technology
Blockchain is essentially a digital ledger which allows users from different locations and domains to access the same information in real-time.
Submitting the critical financial information of the company will ensure that the leading investors and management of a company can access the data.
The data also offers transparency as any change made by a member will be visible to all the other members of the technology. This feature is essential because it provides greater efficiency to the functions of compliance, auditing, and reconciliation functions.
We expect a change in the accounting trends and the revolutionary upgrade of block-chain technology will lead the way.
5. Artificial Intelligence
Like big data, another factor that will play a pivotal role in shaping the accounting trends in the current year is artificial intelligence. Similar to all other online platforms, artificial intelligence is highly popular for its ability to reduce the expected time people spend on redundant accounting tasks.
Another reason why we expect artificial intelligence to play a more significant role and become one of the biggest accounting trends in 2019 is due to its ability to provide users with strategic depth and aid accountants in making the right decisions.
AI helps in decision making because it allows entrepreneurs to make precise decisions with greater accuracy. In addition to speeding up the process of decision making, AI also allows accountants to provide better advice to their clients.
The more the businesses will move towards revenue-generating tasks, the higher the likelihoods of speeding up decision-making processes. This is one of the significant advantages of automation and machining of all sorts. In the case of AI bots, process automation will free up time for accountants to focus on business management roles.
6. Changes in Accounting Standards
To keep up with the changing times, a continuous change in the accounting standard is a must. Most of the accounting standards were there before the advent of social media and digital advertising. These new business models have a significant impact on accounting.
Professionals now need to keep up with the change in the digital world and react and adapt to these changes more professionally and rapidly.
Given the rate at which the digital world is changing, we expect the situation to be no different for accounting standards.
7. Mobile Accountants
With the emergence of cloud computing, the world is now accepting of electronic documentation. Electronic documentation of accounting standards means that invoices and receipts are now increasingly more mobile than before.
Accountants can collaborate and work more remotely than before; the same processes which needed office space in the past are now carried out on the move. With the presence of many team sharing tools and collaboration of work, accountants can contact each other from different locations.
8. Global Resourcing
Staff retention and training of new staff are some of the common problems that companies face. Continuing from the trend in 2018 is the accounting trend of global resourcing. Given that many accounting firms suffer from a shortage of staff members, this solution is ideal for them.
Outsourcing digital accounting functions allows an accounting firm the space to be flexible with their policies. Additionally, global resourcing is also very beneficial for an accounting firm during the tax season.
The ease with which it is possible to contact and look for options makes it easier for a firm to outsource its digital accounting and recording to another firm.
9. Millennial Market
The fair chunk of the market is dominated by young entrepreneurs looking to establish themselves with the launch of their own business. This practically means that there is a considerable number of young companies looking for accounting services.
In comparison to older businesses, new-age businesses are tech-savvy and more creative; there is a very high chance that these businesses will be using digital accounting measures as opposed to manual accounting because they are more adept with new digital tools.
10. Cloud Accounting
Another accounting trend that swept 2018 with a storm was cloud accounting. The cloud will not only allow remote management and productivity but will also assist in providing more detailed security and data recovery options.
The simplicity of use and immediate accessibility make it even more enticing for accountants and firms, and we expect cloud accounting to be one of the front runners of accounting trends in 2019.
Any factor that strengthens the relationship between businesses and their clients through collaborative work and increased accountability will become an accounting trend in 2019.
Companies that are willing to revamp their accounting methods need to follow the aforementioned possible trends to ensure that they are in the game and are not wasting their money on actions that are redundant and are not required.
Planning is the key to revamping; the first step should be to map out where you want to be and then to follow the changes in the system in accordance to the goals you have set for yourself.