Update: This article was last updated on 16th July 2020 to reflect the accuracy and up-to-date information on the page.
According to Accounting Today, “The accounting software market will have a global value of $11.8 billion by 2026, according to new market research, at an expansion rate of 8.6 percent per year starting from 2018.”
Most accounting businesses nowadays adopt and leverage new-age software to become accounting firms of the future. The accounting software applications help them to automate repetitive and time-consuming tasks and redefine existing business processes. However, trends in accounting technologies keep changing from time to time.
Each new trend requires accounting businesses to switch from conventional accounting software to emerging accounting technology innovations. No business can remain relevant and competitive in the long run without adopting these innovations early.
They even need to implement an elaborate plan to adopt and leverage innovations in accounting business to increase revenue, retain clients, and increase operational efficiency.
The accounting businesses must consider adopting these technological innovations without any delay.
1. Cloud-Based Accounting
Within a short span of time, cloud computing has been transforming enterprises from various sectors. Like other enterprises, accounting businesses must leverage cloud computing and switch to cloud-based accounting to stay relevant and competitive in the future.
The cloud-based accounting tools enable accountants to access financial data anytime and anywhere.
These tools further help accounting firms to facilitate constant collaboration between accountants and clients. They can use any device with internet connectivity to access financial data and work on the accounting apps.
Moreover, businesses can easily upscale or downscale the resources depending upon the requirements without making a huge investment for the same.
2. Accounting Software Integration
Accounting operations rely on different tools. For instance, they can use specific software solutions to manage invoicing, process payment, handle payroll, track inventory, and manage financial reports. Traditional operations adopt the manual entry from one app to another.
However, no accounting team can beat the competition without such a tedious approach. Integration between all software can automate the information sharing between them and add pace to the overall process. Along with that, the chances of errors are also significantly reduced with that.
One of the examples can be integrating QuickBooks software with Drake Software so as to import seamlessly accounting data for tax filing of returns. As the manual entry work is eliminated, the accuracy is increased by manifolds.
3. Digital Currency
A steady increase is being noted in the number of users accepting and making payment in digital currencies. Many business people even use digital currencies to make payment to or receive payment from international customers.
The accounting firms need to help businesses to record digital currency transactions just like other financial transactions. But they must invest in next-generation accounting software to record the digital currency transaction at the prevailing exchange rate and report the capital gain tax at the appropriate rate.
Blockchain is no longer restricted to digital currency transactions. Many businesses already leverage blockchain to record their financial transactions in an open, digital, and secured ledger. In addition to keeping the financial transactions transparent and auditable, blockchain further makes the transaction records accessible to authorized users anytime and anywhere.
Accounting firms may even go for custom software applications to use blockchain for a number of purposes – accelerate fund transfer and financial transactions, record financial transactions accurately, reduce account receivables and payables, and facilitate auditing. The custom software applications can be customized according to specific use cases.
5. Optical Character Recognition (OCR)
Accounting businesses can manage a client’s finances more efficiently by integrating the right accounting software. But they cannot make the accountants more productive by reducing the manual entries required to record various financial transactions.
The Optical Character Recognition (OCR) technology enables accounting firms to automate and accelerate manual entries. The accounting firms must leverage OCR technology to convert textual information to digital files using scanners and mobile device cameras. The firms must invest in OCR-based solutions to record financial data quickly and accurately.
6. Artificial Intelligence
In a conventional working environment, accountants put extra time and effort to analyze and report historical financial data. They even facilitate decision making by calculating various financial ratios and generating elaborate reports. Artificial Intelligence (AI) makes it easier for accountants to accelerate and simplify various data-related tasks – bookkeeping and transaction coding.
In addition to automating repetitive tasks, AI will further enable accountants to deliver functions of higher value like business strategy implementation and financial advising. AI technologies even have the potential to transform accounting firms completely.
As per the research by MIT Sloan, 85% of the respondents believe AI will allow companies to obtain and sustain competitive advantage in the market.
AI helps to create a comprehensive report by extracting financial information from various resources. It improves the visibility of spending patterns, earnings, and more by offering tools to track changes in business finances.
7. Machine Learning
As a subfield of AI, machine learning detects patterns by analyzing a large amount of data using algorithms and statistics. Accounting businesses must leverage machine learning to simplify and automate categorization and validation tasks.
For instance, an accountant can use machine learning techniques to check if an additional expense is relevant or not by analyzing a large set of expenses. Many accountants believe that AI and machine learning will automate their tasks completely. But the accounting businesses can leverage these disruptive technologies to make their accountants more productive.
8. Robotic Software
Many accounting firms are currently using robotic software to reduce operational costs by automating repetitive tasks. According to Accenture, the robotics reduces the cost of operation by 80% in financial services.
However, the use cases of the robotic software will differ across accounting businesses. Most accounting firms will need customized robotic software to perform a variety of transactions – entering financial data, saving the financial data in relevant formats, generating reports, and performing tax operations – quickly and accurately.
9. Next Generation Mobile Apps
Most accounting firms nowadays allow employees to bring and use their own devices. The bring-your-own-device (BYOD) strategy enables accountants to access financial data and record financial transactions anytime and anywhere using their mobile devices.
Recommended Reading: Mobile Accounting: All That You Need To Know
But no accounting firm can keep financial data secured without implementing a comprehensive mobile security plan. They need to build custom mobile apps that leverage cloud computing and focuses extensively on data security. The app also needs to include features to enable authorized employees to access sensitive financial data by eliminating the impact of emerging security attacks.
On the whole, the trends in accounting technologies keep changing from time to time. Each new trend makes conventional accounting software obsolete and requires accounting firms to switch to the latest technology innovations.
The accounting businesses must keep in place a robust strategy to monitor and adopt the emerging trends and technology innovations timely and proactively.
What all latest technologies have you adopted in the accounting business that helps you drive innovation? Do let us know in the comments.
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