The accounting industry never stays still for long. Modern accountants make use of new technology and new strategies whenever they can in order to stay ahead of the game and offer more valuable services to their clients.
Accounting is undergoing significant changes at the moment thanks to the increased availability of big data analytics, machine learning capable software, and the cloud. This article takes a look at some of the most important trends in accounting that are underway at this very moment.
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Virtual accounting is a relatively new trend that is picking up pace around the world. Virtual accounting firms offer businesses access to accounting tools and accountancy professionals via online portals. This has proven to be particularly useful for small to medium-sized businesses that cannot afford to hire in-house accounting staff or contract with a third party firm in the long term. Virtual accountancy firms like the company set up by resident Mike Savage of New Canaan have proven invaluable to small businesses.
Accountancy is going through something of an automation boom at the moment. Increasingly capable software equipped with machine learning elements is helping accountants to ditch the monotonous book balancing elements of the trade so that they can concentrate on more productive strategic work. There has been an increased amount of automation in just about every area of accountancy. Instead of making accountants more obsolete, this new wave of automation is making accountants into more valuable human assets for businesses that want to get a great deal done.
The rise of cryptocurrency has been one of the most important sea changes in the world of finances over the course of the last ten years. Cryptocurrencies are online blockchain-restricted currencies that change in value according to both speculation and adoption. The first truly successful cryptocurrency – bitcoin – created a huge stir in both financial and political circles. Many businesses have begun investing heavily in cryptocurrencies – seeing them as a way to multiply investments.
A new breed of accountant – the crypto accountant – has been born. They help businesses negotiate the often complex and murky world of cryptocurrency investment. Importantly, they also offer companies advice on the many risks of large-scale cryptocurrency investment and make sound decisions about which currencies are viable investment opportunities.
Data Security Provision
Data security is one of the main issues in modern business security. Today’s businesses deal with an absolutely vast quantity of data. If data is leaked or stolen, companies can suffer huge PR and financial setbacks. Because accountants deal with a great deal of sensitive financial data, they are expected to ensure that data security standards are met when working with a client. Clients are extremely concerned about letting third-party accountants work with their precious data. Accountants are expected to provide a full rundown of their data security plans and to adhere to any data security protocols set by the client business.
Big data security breaches in recent years have made big headline news. Some data loss is caused by malicious actors. The Wannacry ransomware encrypted sensitive data and forced businesses to pay a ransom to decrypt it. The malware was created by hackers working on behalf of the North Korean government. Accountants need to plan accordingly for attacks by malicious actors after sensitive financial data that they are working with.
Systems of remote server-based computing and storage are colloquially known as ‘the cloud’. Cloud servers host software remotely, which is then accessed over the internet. All data sent to or from a cloud server is encrypted – meaning that it is only visible to authorized humans, software, and hardware. Cloud technology enables accountancy firms to offer software without a client or partner needing to download it. Virtual computing portals can be logged into and the software included can be hosted on a cloud server. The adoption of cloud-based software by accountancy firms makes operations with third-party companies far easier and also enables the pain-free expansion of software capabilities.
Cloud-based software frees up accountants working ‘in the field’. They can use the endpoint devices of their client company to access accounting software solutions with ease. Hosting software on the cloud can also make collaboration with experts and other members of a firm far easier, as any number of collaborators can access software to view data. The upfront costs of hosting software on the cloud are significantly cheaper than those associated with more traditional software packages.
Big data is big news. And dataset that is so varied and large that it can only be analyzed with the help of computers can be considered to be ‘big data’. There are very few industries that have been left untouched by the rise of big data as a business tool. Accounting is no exception. Accountancy has always been a field concerned with the analysis of data, but two factors have led to the use of truly vast datasets in the field:
Increased Data Production
In an ever more networked business environment, more and more usable data is being produced constantly. This has meant that massive, varied, and constantly changing datasets are being produced. If accountants can learn to make use of these datasets, then they will be able to offer clients better services.
Improved Methods Of Data Analysis
The massive amounts of data available to accountants would be absolutely useless without advanced AI-guided methods of data analysis. AI-capable accounting software can automatically code and interpret huge carried datasets.
Accountants can use big data to offer client businesses very accurate financial forecasts. This can be used by client companies to develop strategic plans and to prepare themselves for future market trends. Accountants that can deal with big datasets are invaluable to businesses that want to prepare properly for the future. Accountants also need to be responsible for ensuring that their client makes realistic conclusions based on big data analytics. While big data-based financial strategic planning is very accurate, it is not without its pitfalls when used without question.
Traditionally, accountants would bill their clients by the hour. This is no longer the best way to bill clients. An increase in automated processes and virtual work has meant that businesses are unwilling to pay by the hour for a service that they cannot quantify using time.
Instead, many businesses prefer to pay for accounting services based on the value of the services they are being offered. This can include paying for the completion of a set project or paying more money for services that are likely to increase revenue and promote growth.
Accounting firms have cottoned on to this shift in business practice and now typically offer value-based pricing to their prospective clients. Value-based pricing can tempt in clients because they know that they are paying for a specific task to be completed. If the task takes longer than expected, then they will pay the same price. Likewise, if a project is completed ahead of schedule, an accountant will still receive their fixed fee. Smaller tasks that require less effort to complete are generally cheaper, while high-value tasks have corresponding high prices. This allows a company to budget more accurately for accounting work. It forces accountants to be more efficient in their work but also offers them a way of gauging their financial income.
Accountants have always been important advisors to businesses and individuals that need to get their finances in order. Increasingly, however, accountancy firms are being bought in as advisors to help businesses plan for the future. Accountancy firms that want to stay competitive in an increasingly automated market need to branch out from traditional services and focus on advisory work more than ever before.
Accountants have plenty to offer as advisors in business. They can:
Advice On Tech Adoption
Accountancy firms frequently act as technology consultants. In this role, they inform businesses of the latest technology trends in accounting and help them to onboard new technologies that will help a business grow more efficiently. Accountancy firms are well-positioned to offer this form of advice: they are required to keep up with the latest financial technology trends in order to succeed in their own work.
Advice On Software Management
Accounting firms are often bought in to help train the staff within a company in the use and management of new software related to finances. At a pinch, they can act as comprehensive fintech training consultants. Software management advice is often offered in conjunction with IT professionals and network engineers.
Advice On Human Resources
Accountants are well-positioned to advise businesses on the financial impact that the use of emerging Human Resources trends will have on a business’ growth. All human resources decisions have financial influence. Accountants can crunch the numbers and let a business know just how a change in HR policy will impact them. This allows a company to properly plan for the financial impact of changing Human Resources met