At the beginning of 2020, accounting professionals realized for the first time that their jobs were entering the 21st century. The advancements in technology and computing operations brought new life to accountancy. Stacks of ledgers and old manual processes are being replaced with modern accounting software and tech stacks. The digital transformation has allowed accounting firms to specialize and offer additional services beyond tax preparations.
The world of accounting is changing, spearheaded by technology and made necessary by recent global events. Here’s what accounting professionals should expect in the next few years and for the future of accountancy.
Top 4 Tech Trends that Will Transform the Accounting Industry
To those outside the field, accountancy can seem stagnant and lifeless. Yet, new trending technologies, accompanied by the impact of the recent global health crisis, are leading to significant changes in the accounting field.
The median age of accountants and CPAs is 43 years old. To these late-stage Gen Xers (and the early Millennials emerging in the field), adopting new technologies is easier than for those who have been in the accounting field before the development of modern accounting practices.
The digital transformation is changing how many companies conduct their daily operations. The majority of accountants (90%) agree that there is a cultural shift leaning toward technological adoption in accountancy. These are the four technology trends that will transform the accounting industry forever.
1. Cloud Computing
Computers have revolutionized workplaces since their first introduction. However, the changes cloud computing brings will signify a new age for accounting. New technologies will mark significant improvements in productivity and efficiency. It will also present accountants with a better work/life balance. Accessibility, data accuracy, and faster data retrieval are only a few of the benefits of cloud-computing services.
Cloud computing secures data storage but also exposes companies to new risks. There are a few downsides to cloud technology, including risks of cyberattacks, increased operational costs, and security issues. Firms can mitigate these risks by partnering with an IT services provider who can continuously monitor and update their cloud-based IT infrastructure.
Accounting software experts agree that firms should be using one or more of the following cloud-computing software programs:
- Xero: An online accounting software that connects users to their accountant, bank, bookkeeper, and other business apps.
- QuickBooks Online: The leader in accounting and bookkeeping software offers an online, cloud-based accounting software version where customers pay monthly instead of an upfront fee.
- SharePoint: A web-based collaboration platform that enables teams to work together seamlessly and integrates natively with the other Microsoft 365 offerings.
- Rewind: A SaaS and cloud data protection app that ensures subscription services run without interruption with backup, restore, and copy of a firm’s critical data.
- Practice Protect: A password manager tool made for accountants to provide better cybersecurity over sensitive client data and password protection.
2. Blockchain Technologies
A blockchain is a digital transaction ledger distributed throughout an entire computer network. That includes private, public, and internal networks. It is most commonly used in cryptocurrencies like Ethereum and Bitcoin. Each contains a specific number of transactions that every network user can view and verify. Every person involved in the blockchain receives a record when a new transaction is added to the blockchain.
Blockchains offer complete transparency and build trust between organizations. Presently, banks get the most benefit from blockchain technology, but experts expect other industries to quickly get on board. It is particularly useful for accountants because no one can tamper with or forge records. Furthermore, every transaction is verifiable by multiple other parties on the blockchain.
These technologies are also incredibly secure. Multiple verifications maintain order, and every transaction is recorded with an unchangeable and unique cryptographic signature known as a hash.
In the future, accounting firms will likely use blockchain technologies to:
- Conduct better audits
- Improve their records
- Verify information faster
Blockchain technologies offer accounting firms a significant benefit with more dependable transactions. Yet, the technology is not quite in a place to revolutionize the way firms track expenses.
One trend accounting firms have been late to adopt is automation. When people hear the term, they think of moving workflows into robotic processes. However, automating accountancy tasks does not mean robots working on financial spreadsheets.
Automation simply allows procedures and processes to be completed with minimal human assistance. Computers finish tasks as long as there are clearly defined and repeatable rules.
Accounting firms can expect an 80% increase in operational efficiencies when using automation for accounts payables. Accountants are more productive when taking advantage of accounting software tools that automate tasks. For example, optical character recognition (OCR) software can scan documents and enables the program to autofill fields within the system, eliminating manual data entry. Innovations like these in tax software make processing returns quicker, easier, and more error-free.
4. Remote Work
At the dawn of the pandemic, workers were sent home from the offices to work. Although, the trend for increased remote worker positions was on the rise pre-pandemic. Now, roughly 4.3 million Americans work from home at least part time.
Since 40% of the workforce feels that the flexibility to work remotely is a great benefit, many are only taking positions that offer remote work models. Accounting firms will have to offer remote work as an option to compete. This will also help widen their talent pool.
Preparing for the Future of Accounting
In the coming years, accountants and CPAs will continue to see advancements in technology that make their jobs more manageable. As emerging technologies improve the accounting industry, it also brings about concerns.
With all these changes, accounting firms need a tech partner to help them get through the transition. One they can trust to configure, integrate, and help implement new processes for improved operations.
At Tech Guru, we offer the support accounting firms need to move into the future of accounting. We help our clients stay ahead of the curve in the age of digital transformation and trending tech stacks.
Get ahead of the latest tech trends in accountancy. Take our free Accounting Firm Technology Checkup to receive your tech optimization score and to find out where your tech stack needs upgrading.