The Top 5 Accounting Trends for 2020/2021

Over the last 2 years we have attended Accountex, Xerocon and many other accounting conferences, and we really feel that the industry has changed too much. 

I feel sometimes like I am getting old 😊 because I cannot keep up with so many changes recently, but I don’t think I am alone.

We believe that the recent changes are a result of changes in market demands, regulatory changes, a different generational approach and changes in client demands.  We also think that businesses are currently willing to make the investment necessary to keep up with changes in accounting. 

On top of all that, we can add COVID-19 and the work-from-home generation that needs the accounting industry to be more mobile and flexible.

Here are the top 5 things we believe will change significantly going forward in the accounting industry.

1. Automated accounting processes

Automation of processes has been important in recent years but has become increasingly important now people are working remotely, possibly from anywhere in the world.

Automated accounting processes are an important trend in the accounting industry as automation leads to fewer errors and less confusion; consequently, clients are willing to invest more in automation because of those advantages. Since automation relies entirely on computers and network technology however, there is a risk that businesses can incur a greater risk of fraud cyber-attacks.

It is important to make sure that accountants and management understands the automated processes and that they are familiar in ensuring that the outcome and process is correct. Management and accountants also need to ensure that their cyber insurance and business continuity process is in place and reviewed regularly.

It is certain that automated accounting processes are here to stay and we as accountants and business-owners should embrace and understand the changes it brings to ensure we stay on top of and advance our profession.

2. Importance of accounting software solutions

Businesses and people are increasingly wanting technologically-driven solutions in the accounting industry and this will only intensify in the coming years.

As the demand for computerised accounting software and processes grows, new accounting technology will be developed that will assist with this need. Already more than 50% of accounting practices use accounting software solutions and this is a continuing, upwards trend.

It is important to perform a proper software requirement analysis and choose the right software for your business requirements.

We see so many clients coming to us with a ‘broken’ accounting package and the reality is that they did not choose the right software for their business requirements. How do you choose the ‘right’ package? 

At Anlo we do a lot of research on what works for us, our clients, their business and their staff and while we might not have worked with all the packages (there are over 800 programs on Xero marketplace app alone), we have a good idea of what will work. 

3. Outsourcing accounting functions

Businesses are now outsourcing accounting functions and benefitting from having a qualified team at their disposal to help them grow their business.

This approach saves the business on employment costs like running a payroll, salaries, expenses, employee benefits and training costs. While not a new concept, it is proving increasingly popular. 

By outsourcing their accounting function, companies can focus on what they do best -growing their business - and leave the number-crunching to their chosen advisors.

It is important to understand what you expect of your accounting and make sure you build the relationship and trust your accountant. Your accounting practice is there to help you, so use them!  Developing that relationship can only benefit you and your business in the future.

4. Cloud based accounting

The cloud is becoming a popular place for accounting services and software. With cloud-based accounting systems, companies and firms can have access to their system and information anytime and anywhere.

Having access to your information and data also includes tracking inventory movement and levels, sales and sending out invoices on the go, and tracking expenses. Also, cloud-based solutions allow for the workflows and automated process to happen, saving businesses valuable time.

Because things can happen so quickly and efficiently, more and more businesses and moving to cloud based accounting.

As a result of these benefits (and also because tax authorities are increasingly embracing digital financial reporting), around 67% of accountants now believe that cloud technology can make their lives easier when working with clients. This is according to a survey conducted by Sage, which also reveals that 53% of the respondents adopted cloud-based solutions for project management and client communication. 

The one thing to remember is that you need internet to run a smooth cloud-based accounting solution, and it is important that everyone in your team knows how the cloud accounting system works.

Fortunately, training is usually free, and there are some great YouTube videos and tutorials to assist you, especially if you choose a cloud-based software that is well known and widely adopted.

5. Data analytics

As technology allows certain accounting tasks to become easier, the accounting industry shifts its focus to data analytics. Accountants are taking on new roles as advisors, with unique skill sets that revolve around analysing data and interpreting it so that it makes sense and is useful within the business environment.

Analysing the numbers helps businesses and business owners come up with valuable insights, which enables them to identify potential improvements as well as increasing efficiency and managing risks better. 

Although analytics as part of accounting services is not new, improved technology has made it powerful, presenting financial performance in a new way and generating better insights. 

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Now that we have looked at the top 5 things that we think will change the accounting industry going forward, it is important to understand that these changes are coming and to embrace change.

Anlo is embracing both the technology and the changes it is bringing.  We have already transitioned to be a paperless company and we are using cloud-based accounting software like Xero, FreeAgent and Sage to make our lives as well as the lives of our clients, easier. 

We also use automated business processes like recurring invoices and automatic client surveys to guide us in understanding our clients and improving the cashflow process. We use various tools to assist us in analysing data so that we can improve our customer experience and journey. 

On our wish-list is a time-keeping system reminds us of outstanding jobs and gives us regular reminders of processes that needs to be completed. We are currently investigating better and improved software to assist us with this process.

And the funniest thing is, by the time you read this article we might have even improved certain processes and systems because that is how fast our current economic environment and industry is.

This is not something to be scared about. It is good to improve, to grow and change and learn, although sometimes it’s also good to sit back and close your eyes for five minutes well-deserved peace 😊