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.
Accountants always think about the future, especially the future of the company. If you’re an accounting or financial wizard who wants to stay ahead of the emerging trends in 2020, then it’s important that you understand all the essential accounting trends.
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:
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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.
8. 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.
9. 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.
10. 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.
11. 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.
12. 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.
13. 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.
14. 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.