Giddh, December 21, 2019

Emerging trends in Accounting

As change becomes a necessity for growth, small businesses can refuel their business growth by being aware of the latest accounting trends.

The age-old image of an accountant sitting with a strained expression on his face, with numerous files surrounding him, exists no more. Accountants today are modish and are updated with the latest information pertaining to the market and the business environment. They know all about the intrinsic details related to the business accounts and are aware of the tasks needed to be done to manage the growing numbers efficiently.

The accounting industry is in the middle of a sustained boom, which signifies the consistent growth in the industry. The emergence of new accounting technologies has provided companies with many new opportunities, along with some challenges as well. Some of the common challenges that the accounting industry, especially creators of the latest accounting software, tend to face are customer expectations, innovative business ideas, escalating costs, and so on.

So, to overcome these challenges, it became imperative for the organizations to restructure themselves, fill up the performance gaps, and adapt to the ever-changing accounting industry. So, if you’re an accounting or financial wizard, and wish to stay ahead of the emerging trends in finance in 2020, check out the below-mentioned emerging trends in the accounting industry.

One of the known emerging trends in accounting comprises the increasing use of online accounting software. It is estimated that 90% of small and medium enterprises will be using cloud accounting software by the end of 2018. Cloud accounting is capable of:

The evolution of technology is another contributing factor that’s reshaping the business landscape, the industries, the systems and processes, and converting a majority of the manual tasks into automated functions. This tremendous shift has boosted the businesses’ productivity, has made them more efficient, and effective.

Emerging Issues in Accounting – A Quick Analysis

Before we discuss the accounting trends, it’s important to look at two primary issues that the accounting industry is being plagued with.

Traditional accounting roles are being taken over by AI

Artificial intelligence technology is expanding to virtually every industry that’s out there including the accounting industry as well. Looking at the recent trends in accounting, AI is becoming more proficient day by day at handling complexes accounting tasks like compiling the collected transactions into financial statements and tax returns. According to an estimate by Gartner, automating such accounting tasks through AI and robotic processes will save up to 25,000 hours of time invested in rework per year, which could then be used for other important tasks like forecasting, analysis, increasing engagement, and reducing the staff turnover.

The new accounting trends of automation and AI can ease up your work by taking care of the tedious and hefty tasks. However, one needs to be aware of whether AI will completely take over their duties and jobs. The solution for this emerging issue in accounting is professionals should try to get into an advisory or management role. They can take the responsibility of helping businesses adapt and implement AI and other emerging trends in accounting as they turn out to be more powerful and sophisticated. Moreover, automated repetitive tasks like payroll and tax form preparation will have to be cross-checked by humans which seems like a new opportunity for growth instead of a challenge.

Accounting professionals need to see new trends in accounting as a way to do their jobs more efficiently. Tapping into these trends can save a lot of their time which can be used for focusing on strategic tasks, such as financial planning and risk management.

Diversifying their skills to offer strategic advice is a challenge, but necessary

Technology will surely eliminate the need for traditional accounting tasks and rules-based accounting skills, but among these emerging issues in financial accounting, the demand for people who can carry out an excellent financial analysis and strategy is also increasing. It does take time and effort to learn about financial forecasting and risk analysis or leveraging analytics tools to extract useful insights. So, one can’t just get out of bed one day and become the perfect financial advisor to their clients.

They have to put continuous efforts to make themselves familiar with the advanced forecasting and analytics features that their accounting software offers. Eventually, they will be better equipped to interpret the deep data and translate it into actionable advice. To get in sync with the emerging trends in business finance and start providing strategic advice to clients, it is recommended for accountants to talk to their clients, conduct surveys, and dig into the numbers to find out where they are struggling with their business goals and how to help them get there.


With the emerging trends in finance, the challenge to keep security threats at bay is getting tougher. Hackers are targeting accounting information like credit cards, bank account numbers because of their high value. Therefore, as an accounting professional/ business leader, your responsibility goes beyond protecting your company’s data only. You also have to ensure that you are keeping security breaches away for all the contacts in your system that include your employees, clients, and service providers. To be able to do that, you have to –

Keep your accounting software updated at all times. The updates come with new features according to accounting software trends as well as patch security vulnerabilities.

Ensure that only authorized personnel are allowed to access specific data and systems

Get rid of any old client data or company data that is no longer needed

Get on the cloud. It offers significantly better security than other data centers.

  • Staff Challenges

One of the primary concerns of the accounting industry involves keeping up the right employee on board for a long duration. Over the years, the demand for qualified accountants has superseded the availability of apt candidates, and the ones who are working right now are about to retire in the next 10 – 20 years which further aggravates the issue.

  • Client Retention is a Concern

The involvement of cloud accounting software is an emerging issue in financial accounting since it’s making it possible for the organizations to stack their information in an orderly fashion allowing accountants to run the last final check. It will further make the e-filing process quick and allow clients to send in their information in a few clicks. Owing to this digitization, the accountants will have to adapt to the changing landscape to meet up the client requirements and carry out their daily tasks.

Accounting Trends – Worth Knowing in 2020

One of the known emerging trends in accounting comprises the increasing use of online accounting software. It is estimated that 90% of small and medium enterprises will be using cloud accounting software by the end of 2018. Cloud accounting is capable of:

Accurate financial analysis

A part of online accounting comprises of analyzing the financial data in an accurate manner so that there does not exist any mistake in the numbers related to the business. Online accounting solutions give business owners actionable and accurate financial information using which they can make the process of making decisions faster.

Capital maximization through subsequent planning

Capital maximization was something nobody had heard of a few years ago. But these days, due to the emerging accounting trends, even a layman understands what needs to be done to maximize the business capital and what level of planning is needed for the same.

Analyzing trends

Analyzing the trends encompassing the business as well as the external environment has become easier with the advent of new accounting styles. Studying the latest developments in accounting has, therefore, become effortless.

Customized Solutions to Ensure Customer Satisfaction

As a business owner, you must keep your customer satisfied and are giving them best-in-class customer service. The customers today are all tech-savvy and this is one of the emerging trends in business finance which is seamlessly transforming how the finance industry operates.

Since the customers today understand their requirements quite clearly, the Fin-Tech solutions must be equipped with the right set of tools to impress their customer base. The excessive usage of smartphones is further enforcing the organizations to provide services through easily accessible mediums.

Perfect Mix of Younger and Experienced Folks

The old generation working in the accounting industry isn’t that tech-friendly while it isn’t true for millennials who’re extensively using the latest developments to automate their tasks. To avoid the imbalance and fill the skill gaps, the organizations must include cloud-based accounting software into their operation cycle.

The inclusion of automated software is one of the new trends in the accounting domain which is allowing the organizations to strengthen their position as a business leader, manage and analyze their data, and hit all their KPIs in time.

Assisting in taking decisions concerning the future

The current development in accounting assists the business in taking quick decisions concerning the future and also helps in future forecasting which avoids most of the errors and ensures smooth business functioning.

Reducing errors and generating comprehensive reports

Online accounting has resulted in reducing commercial errors to a large extent. A comprehensive report can be easily generated with the help of online accounting and the present performance can be compared with the past performance, and changes can be made accordingly.

Keeping track of information

The business can have even the minute details related to the business accounts, transactions so done, and a complete list of incomes and expenses with the due assistance of emerging accounting trends, which helps in keeping track of information related to the business and everything else.

Demand for more Strategic Planning

Startups mostly invest their initial revenue in streamlining their process, gaining efficiency and becoming an expert in financial management and the technology that helps them manage their finances.

This shift in business operations is even transforming the roles of the CFOs of the organizations. They are now leading their organizations to adapt to the latest digital transformation and strategically planning their organizations’ move to monitor not just the past performance, but also analyze the accuracy of the existing data.

Other current trends in accounting include making the best use of cloud-based financial technology to drive operational efficiency, unify the complete business around a single platform, managing the risks involved, and respond to multiple regulatory changes happening in the accounting industry.

Usage of Blockchain Will Revolutionize Accounting Industry

An important accounting software trend that you must watch out for is the involvement of Blockchain technology. Before blockchain came to life, organizations were relying on third-party financial organizations or banks acting as the middlemen.

Now, with blockchain, the entire process of transferring the funds will become quicker, easier, and it’s bound to completely remove the concept of middle parties, will make the transactions more secure, and streamline the process.

It will cut down the expense incurred in managing and reconciling the accounts and can help the accountants take complete ownership of the responsibilities of their organization and make optimal use of the resources available and focus on planning and evaluating the performance instead of manual bookkeeping.

Automating manual business processes

Why is automation from the cloud better for accounting? Because manual work leads to delays, human error and is costly. Cloud-accounting solutions can help business owners automate tasks such as invoicing, tracking those invoices and even getting paid by the customers.

Have More Visibility and Control Over Numbers

The importance of visibility of numbers is pretty straightforward. If one can’t actually see the state of their financials, they can’t know what’s going well and what needs attention. Cloud accounting offers its users the overall big picture by analysis tools like dashboard & reporting options like shareable balance sheets.

Big analytics and data:

Technology that is being used for accounts and recordkeeping, along with data entry, is constantly evolving and becoming more robust. Employers are always asking their accounting professionals to provide more values through insights and predictive analysis. This big data will provide companies and their leaders with vast amounts of data and information, along with a tool that will help analyze said information. This will enhance the decision-making process and help accounting experts to understand the company’s financial health. Data analyzing software are important for larger firms because it helps them with the auditing process.

Artificial Intelligence and Automation:

One of the modern trends in accounting includes slowly removing the need for manually entering data, hence, saving many business production hours. One of the components that are leading the automation era is Artificial Intelligence. Many reputed accounting firms have started using AI technology, and this has helped them conquer basic tasks, along with increasing employee productivity. While for most companies, AI is still in the development stages, many major firms have put in significant resources that are used to extract important information from contracts, documents, and inventory monitoring. So, when accounting firms take up automation and Artificial Intelligence, they are willing to streamline their work process and enhance productivity.

It’s quite clear that automation is making a mark in many industries and is one of the major emerging trends, especially the accounting field. AI is one of the biggest changes that the accounting realm has seen since the introduction of double-entry bookkeeping. It’s great because you can automate simple tasks that keep you away from important accounting activities that actually benefit the company. The workflow rules, bank transactions, recurring invoices, payment reminders, and billing processes are just some factors where automation and AI have created an impact. AI is data-driven and it is more concerned with making accounting software smarter. The whole Artificial Intelligence model is achieved through machine learning algorithms. The main benefit of taking on AI into your accounting system is to reduce errors and achieve accuracy that is next to perfection. Businesses that make use of AI to handle accounting duties will provide real-time data insights, along with accurate financial reports.

Cloud accounting to small and medium scale businesses:

One of the modern trends in accounting assignment includes leveraging the internet’s power so that it includes more collaboration and shares information in real-time. This is only possible when all the data in-housed online. Cloud-based data has begun to change the way small scale data operate. Service providers will be able to access huge amounts of data from virtually anywhere at a fraction of the cost, all thanks to cloud computing. This factor is really important since the companies are on a smaller scale. For now, large scale companies are taking advantage of cloud technology, but it won’t be too long before small and medium scale companies start using cloud technology. This will make them localized and competitive, as well.

Outsourcing accounting responsibilities:

The meaning of emerging trends in accounting includes going through the process of building in-house accounting departments and outsourcing them as well. Small scale companies tend to outsource their accounting departments so that they can focus on the primary functions of the company. This will help reduce the cost, reducing the chance of fraud, and having access to accounting professionals.

Social media can be a source of clients and new talent:

As mentioned before, we live in a digital era, and this means that companies have moved most of their functions online. This includes outreach through social media, along with accounting firms too. Accounting firms can reach a whole new pool of potential clients when they make use of social media. They can use it as a form of advertising and outreach, rather than a business transaction. When using social media, accounting firms can gain more clients and employees, this can help potential clients understand the accounting service and if it suits them.

Recently, accountants from the top accounting firms swear by social media platforms as an impactful marketing strategy because it’s quick and efficient. In the future, businesses will jump on the bandwagon of social media marketing to capitalize on increasing ROI and enhancing their conversion rate.

Accountants can be transformed to consultants:

The accounting industry is witnessing many emerging dimensions in accounting, which includes software, technology, and billing. Billing is a traditional process, and it may be used on an hourly basis, which is mostly fixed. Recently, practitioners have begun jumping on-board to a new model, known as a value pricing model, and it has changed the way firms charge their clients. This pricing model is upfront, and it creates a trustworthy bond between the client and consultant; which also means that the client gets their price certainty beforehand. This rewards the accountant, not only for hours spend but also for the effort and productivity that they ring to their clients.

With the business trend like cloud accounting, the possibilities are endless for small business owners and accountants who want to achieve the most of their potential. You too can reap the benefits of this revolutionary technology today and jump on the cloud today.

Include fraud/error detection

Fraud is one of the emerging issues in accounting, and it has to be properly addressed, especially since the industry is evolving into the digital realm. A comprehensive fraud detection system is one of the recent trends in accounting. Fraud can include suspicious invoices, banking fraud, duplicate calls, phishing, and so on. It can devastate your business incomes, success, and productivity, even if you were not responsible for the crime. It leads to major revenue loss, and you may end up shelling loads of money to settle in legal cases. Hence, the best detection against emerging issues in accounting like a fraud is detecting it early. The accounting software that is available now will help you create digital approval workflows. It will also have document management tools that are built-in, this way you can filter documents and weed out any potential fraud.

Integrating accounting software and banking APIs

This is a recently emerging trend in finance, wherein banking services have seen a rapid evolution in the last decade. Hence, many businesses have started using online banking, and the dependence on physical banks has gone down as well. Banking services have become accessible and people can now use them on their mobile phones as well, along with integrated banking technology. Accounting has merged with banking and many modern accounting solutions offer bank integration. Thus, making account reconciliation faster and simpler.

Collaboration tools and remote work is done online

One of the most useful accounting trends is remote collaboration. Today’s world is quite fast-paced, and the success of your business depends on how quickly you can get things done; this means you will have to work as a team to get things done. Online collaboration tools will put an end to any silos that are present in various departments and enhance productivity. It will help you organize and prioritize your tasks, complete your projects faster, and save time and money. You must involve your accounts when collaborating online tools, this way they can handle a company’s accounting process, no matter where they are.