One can only hope for a better future and with this ever-growing world it becomes even more difficult to be certain about anything and this is never been truer than when you are talking about emerging accounting trends.
A Sage report reveals that about 90% of accountants feel that accountancy is undergoing a cultural shift that is leaning more toward technology (Sage, 2019). This cultural shift is driven by many factors, including generational change and client demands.
These are some accounting trends that can help your firm grow:
- REMOTE WORKFORCE: The traditional ways of accounting are changing; employees are not bound to a physical. The implementation of cloud-based software allows employees to complete their assigned work tasks without being in the same building. Outsourcing accounting and bookkeeping services get easier as all the data is available on the cloud. This not only increases flexibility but also decreases a lot of overhead costs. All you need is the right technology.
- DATA SECURITY: With the growing technology cyber threats are increasing as well. Accounting firms should protect themselves by providing adequate cybersecurity training to their employees. Cloud based software offers cost effective, scalable solutions for secure online data storage. Accounting firms should also implement systems with two-factor authentication requirements so only authorized users can access sensitive data. With the level of confidential financial data shared between accountants and clients, even a minor security breach can lead to identity theft.
- ADVISORY ACCOUNTING SERVICES AND HOLISTIC ADVISORS: To stay competitive in the market accounting firms have to expand beyond the traditional accounting and tax preparation. Industry analysts predict one of the latest accounting trends would be to combine technology and financial advisors. Such a hybrid approach can help accountants get access to deeper insights using analytics.
Automation cannot replace humans entirely, especially in accounting. However, using advanced technologies in the accounting industry can enhance the service quality of accounting firms. For example, accountants will not have to perform manual and repetitive tasks anymore.
- AUTOMATED PROCESSES AND AI: According to research conducted by Sage in 2019, 58% of accounting professionals are expected to automate tasks using artificial intelligence solutions within the next 3 years.
Artificial Intelligence (AI) is having a positive impact on the accounting industry. It can analyze large volumes of data at high speed and with a high level of accuracy. AI can also optimize administrative tasks, workflows, and accounting processes that result in various structural changes for a business.
Many companies use AI and robotic process automation (RPA) to automate routine, highly repetitive tasks. It helps accountants to focus their time on other significant activities.
- VALUE BASED PRICING: Accounting firms should consider implementing clear-cut billing policies such as fixed fees or project rates to avoid confusion when estimating costs upfront.
Value-based pricing provides both business owners and clients certainty on prices and prevents surprises. In addition, it forces accountants to be efficient in their work to allow more profit. Technology and automation are allowing accounting work to be more efficient in itself.
- BLOCKCHAIN TECHNOLOGY: The blockchain is a distributed ledger technology that allows for secure, transparent and tamper-proof transactions. Firms in the US are projected to spend approximately $1.1 billion on blockchain technology by the end of 2022 (Statistica, 2020). Blockchain records and stores assets, liabilities, transactions and provides methods of recording cash flow and reconciling accounts.
- BIG DATA: Big data is a term used to describe the large volume of data organizations collect from various sources. Accounting firms need to find ways to store this data, mine it for insights, and turn it into actionable knowledge to remain competitive. It supports companies and CPA firms through expanded assessment methods. Finance professionals can use big data to identify which collected data are the most valuable and then convert them into actionable insights.
Based on accounting facts and trends, around 63% of organizations worldwide want to adopt big data in the next few years (Dresner, 2020). Meanwhile, many firms are recruiting accountants with extensive knowledge in analytics and data science. Thus, the accounting industry is shifting from its reactive nature to becoming more proactive by using big data.
- DATA ANALYTICS AND FORECASTING: Data analytics help identify operational inefficiencies and manage risks better. More businesses will invest in data analysis to help with data-backed decisions. We can say that data analytics and visualization tools have made finance functions more analytical. Moreover, businesses are increasing their efficiency and managing risks with ease by leveraging the power of data analytics.
- OUTSOURCING OF ACCOUNTING FUNCTION: Most businesses have outsourced their accounting functions, and others are following suit. It has many benefits. Outsourcing allows companies to focus more on their limited resources, thus increasing their profitability. It also saves them employment costs like taxation, payroll, insurance benefits, and induction expenses.
HOW WILL FAIR AND SQUARE HELP YOU?
As an outsourced accounting and bookkeeping services provider in UAE, we understand the client’s needs as per this market. As a sector, we specialize in accounting and VAT consultation for
Until fairly recently, businesses in the UAE have had no real requirement in terms of how they managed their accounting records. However, with the advent of recent changes in the Commercial Companies Law and Value Added Tax (VAT) in the region, the UAE government and Federal Tax Authority (FTA) have laid down clear rules about the maintenance of business accounts and financial details and compliance with International Financial Reporting Standards. Whether it is new businesses or existing ones, all are having to make a shift towards an organized way of maintaining records and reporting thereof.