LATEST TRENDS IN ACCOUNTING AND FINANCE POST-COVID-19 PANDEMIC
The COVID-19 pandemic has evinced how well financial institutions can operate with remote staff, which is a positive aspect. In view of the combination of new technologies and digital accounting, CPAs operating remotely may still deliver high-quality service to their clients.
Even though a rising proportion of accounting firms are embracing the notion of having their employees work remotely regularly, it is also evident that cybersecurity precautions must be considered to avoid costly data theft.
Many areas of accounting work shifted from handling financial records to analyzing data, have been digitized, allowing them to be completed online and from any place. Accountants will continue to help customers establish a sustainable and cost-effective balance in the future, whether they work from home or in the office.
Organizations can aid from these crucial trends and should consider how to do so effectively, but accountants should also consider how to strategically integrate these six technologies into the strategic planning process.
Focus on Big Data and Data Analytics
An emphasis on data analysis of key financial and accounting data is an essential accounting trend in 2020. Since knowledge is pivotal to prudent financial decisions, progression in data centers, database technology, and software have steered to an improvement of management decisions in the age of big data and data mining. Accounting data has been a vital source of company decision-making information for a long time.
Businesses can attain useful insights from the process of studying numbers so that processes can be honed, efficiency can be increased, and risk management can be achieved. The industry focuses on data analytics as the new technology automates many accounting activities. Accountants take on new responsibilities as advisors, which require unique data analysis skills.
While large data is not a new facet of accounting services, in recent years it has become increasingly ultra-modern and provides more actionable insight through a new light on financial performance. Larger accounting firms use tax, advisory, risk management, and audit data analytics. In the meantime, CPAs use the most advanced tools in data analysis for industry-specific requirements in other organizations.
Data is crucial in the corporate world to make financial choices. In addition to statistics and spreadsheets with which accountants have for years been used, the data now contain unstructured data that can be evaluated using natural linguistic processing. This could avail monitoring of the financial situation in real-time. Data is the gasoline that propels other Fourth Industrial Revolution technology advances that are revolutionizing finance and accounting. Even the auditing procedure has gone digital. In the financial world, data provides useful cognizance, drives performance, and improves the client experience. Because everything has a digital footprint, our world's unprecedented digitalization is empowering us to glean previously unobtainable insights from data. These insights help ameliorate internal procedures and increase revenue.
Artificial Intelligence (AI)
Artificial intelligence can be utilized by accounting and financial experts. Machines can perform long, repetitive, and redundant tasks with AI algorithms. With the succor of AI, financial professionals can spend more time inspecting and not merely crushing the data. By simplifying procedures, machines can help reduce costs and errors. The more finance professionals rely on AI, the more time they will have to concentrate on their key strengths, analyze and process huge volumes of data and perform routine work. The expectations of customers have evolved due to new technologies and accounting can be stated the same. Accountants benefit from AI since it increases their efficiency.
Accounting Today estimates that the global software market would amount to more than 12 billion dollars by 2026. The way accountants work and, by virtue of, how they communicate with their clients, has changed cloud computing, often referred to as cloud accounting. From 45 to 60 percent of companies have switched to cloud computing, eliminating the need to have accounting software installed on every computer. Software is saved on a server or the cloud instead. This will surge the efficiency of cloud-based software upgrades rather than internal renewals and downloads, which take time.
Because of the concept of sharing resources, such as accounting software that runs on the providers' servers and the ability to access financial information in the cloud, accounting information is more accessible, and the process is more efficient. Furthermore, more distant accounting employment for collaborative accounting will be created as a result. Furthermore, online accounting adds an ancillary layer of security to the data, protecting it from being hacked, damaged, or lost.
Technology-driven solutions adoption is on the rise and will continue to rise in the coming years. Accounting software manufacturers will develop better solutions in response to the increased demand for digital accounting. These software platforms impart several characteristics that accountants value the most, including process optimization and the decrease of manual tasks.
The epidemic of the COVID-19 has triggered some of the most recent dramatic job trends and the steep increase of remote labor in every industry, including the accounting industry. Although traditional accounting firms are built around coherent internal teams, the trend is growing to outsource specific duties and projects to third parties.
Outsourcing is an entrepreneurship cost-cutting strategy. Recent surveys show that 300,000 jobs are outsourced every year, with 59 percent of firms choosing to outsource costs. Outsourcing has many ascendancies, including enabling your company to take on new customers, providing a variety of services and addressing critical capacities gaps for highly complex projects.
Accountability can be outsourced for a range of reasons. It enables companies to concentrate more on their limited resources and to increase earnings. It also helps to reduce costs, such as wages, taxes, salaries, benefits, and training. Subsequently, more and more organizations outsource their accounts. As a result, there are increasing numbers of outsourced providers of accounting services, and it is one of the fast-growing accounting divisions.
The third technological topic to emphasize is Blockchain, which has significant consequences for financial and accounting professionals. Blockchain or distributed ledger is an exceedingly secure database. This means that the data that are useful for accounting and financial recording are kept and accurately recorded. Blockchain validates intelligent contracts, protection, transfer of assets, verification of identities and credentials, and much more. Once the technology is widely used and challenges to industry regulation are overcome, Blockchain will aid businesses through cost savings, traceability improvement, and safety improvements.
Blockchain is a vigorous accounting trend, and in the future, its use is sure to heighten. The way accountants’ function will be transformed. It will not get outworn but will be more coherent. As computers and Internet have revolutionized workplaces across all industries, Blockchain will proffer solutions to industry-wide accounting problems.
Calabrese, Nathan. 2021. 2021 Trends in Accounting and Finance. Retrieved from https://www.g2.com/articles/accounting-finance-trends-2021 on June 29, 2021.
Marr, Bernard. 2021. The 6 Biggest Technology Trends in Accounting and Finance. Retrieved from https://www.forbes.com/sites/bernardmarr/2020/07/27/the-6-biggest-technology-trends-in-accounting-and-finance/?sh=58c71e823c7e on June 29, 2021.