Automation.
Artificial Intelligence.
Advanced analytics and cloud-based software. Is this the future of accounting?
These words represent more than just concepts - they represent the future of accounting. Indeed, these fields are touching countless industries, including accounting and payroll services. The future of accounting can only be discussed by addressing these broad trends. As a business or non-profit leader who cares deeply about your organization's finances and fiscal well-being, your charge is not just to be aware of these trends. You must also know how to position your business best to get the most out of changing technological tools, improve your business, and better fulfill your mission.
At Enkel, we are on the cutting edge of accounting, technology, and payroll services. To that end, here is a look at the future of accounting and how these rapidly changing trends will impact your business.
Increasing Automation and a Transformation of Traditional Accounting Roles
Automation is familiar to the accounting field, and the role of an accountant has changed every year. Indeed, tools like calculators, computers, and other technological advances have influenced it for centuries. However, what has changed is the speed at which automation is occurring. Automation can now take on more roles than ever, including:
- A full takeover of manually entering and categorizing data and other transactions.
- Increased use of this data to perform analytics and generate reports.
- Ensuring that a business or non-profit performs within necessary legal and regulatory compliance.
However, that is not to say there is no longer a human role in accounting. Indeed, quite the opposite is true: Accountants now need to better understand and interpret data, particularly when drawing high-level conclusions about data generated. Furthermore, accountants need access to the latest cloud-based technology that will allow them to use the data available to make insights, record transactions, manage tax payments, and ensure that the business in question is performing at maximum financial efficiency.
Continued Rise of Data Analytics & Artificial Intelligence
The startling advances in Artificial Intelligence have created technological tools that are more accessible and customizable than ever before. Businesses no longer need to take their accounting needs and figure out how to jam them into pre-existing programs. Instead, increased access to world-class technology has ensured that all businesses - regardless of size - can access highly impactful Artificial Intelligence and data analytics.
The rise in Artificial Intelligence means that businesses can:
- Automatically handle repetitive or manual tasks, allowing your accounting team members to stick to data interpretation rather than data entry.
- Generate customized reports based on text queries, allowing for more accurate and customizable information displays.
- Automatically handle invoice processing and accounts receivable, then alert humans if and when problems (like late payments) occur.
Using AI and data analytics ensures you get the most out of modern technology to give you the most up-to-date and effective information. All this means you can get even more out of available technology.
Cloud-based Accounting Software
Paper-based accounting died years ago, but the days of computer-based accounting continue to evolve. Siloed information is long gone - cloud-based accounting is here to stay.
When used properly, cloud-based accounting software can provide secure online access to any member of your team, thus guaranteeing that your employees always have access to the transactions and reports they need. At the same time, it allows for more customizable outsourcing options: Your business no longer needs to rely on purchasing a one-size-fits-all model but only needs to purchase the functions it needs to operate. You can also easily control and customize who has access to what data, protecting confidentiality and ensuring employees can access any financial record or report they need.
Sustainability & ESG
Many businesses are increasingly implementing values like sustainability and ESG as part of their overall operations. As these values are important, stakeholders are increasingly turning to accounting to ensure that businesses meet the necessary metrics to implement them successfully.
Again, this is where accounting matters. When using the right tools, accountants can help generate reports and make recommendations that show how businesses can successfully implement sustainability and ESG. They can show how businesses are properly using energy, paying their employees, using accounting standards, and more.
Indeed, accountants are the guardians of sustainability and ESG initiatives in many ways. When using the right tools, accountants can show board members, staff, and stakeholders exactly how the business is living its values.
Better Trained Accountants Are Necessary
In the words of Mark Twain, "The reports of my death are greatly exaggerated." The accounting field isn't dying, and the role of an accountant remains desperately needed. However, the role of an accountant is changing.
These technological trends mean that traditional accounting is taking a very different role. Accountants no longer only need to know math skills and how to ensure that their clients are operating their finances within the bounds of the law. After all, computer programs and AI can now handle that. Instead, accountants need to learn how to:
- Interpret data generated by reports.
- Make recommendations based on this data that show where improvements can be made.
- How to manage any ethical, sustainability, or ESG considerations from data they generate.
- Where to use advanced data analytics and Artificial Intelligence to improve an organization.
Five Emerging Trends in the World of Accounting
Outsourced Accounting
I hear from businesses every day that they want to focus on what they do best and outsource the rest. If you are not an accountant, or accounting is not core to your business, why would you want to manage this function? Business owners increasingly realize that their time is better spent focusing on building a better product or service than dealing with accounting. Keeping focused on your core business should allow you to simplify your business and reduce your office overhead. SMB owners should realize that the opportunity cost of their own time is too great to invest it in accounting when someone can do it more efficiently and can produce more useful and timely output.
Improved Technology
Huge strides are being made on the technology front that enables accountants to minimize their time on data entry. In addition, sending a shoebox full of receipts to your accountant, which would create hours of painful work (believe me), is being mitigated by the availability of tools like receipt management software and online invoicing that can be sent directly to your accountant or bookkeeper from your vendors. Today's accountant should be helping you figure out how to streamline the process to minimize your involvement in gathering information.
Value-based Pricing
Value-based pricing provides business owners with certainty on fees and prevents surprises. In addition, value-based pricing forces accountants to be efficient and focused on the issues that matter to customers. Technology has made accounting work more efficient and easier to predict, making value-based pricing possible. When launching Enkel, we tried to keep our pricing entirely value-based. While some clients initially experience a bit of a shock at a recurring monthly fee, once they consider the benefits of knowing what they will pay, they quickly see the benefit.
Demographic Shifts
Millennials are shaking up the accounting industry, questioning historical hierarchical firm models. Increasingly, niche firms are popping up. We saw this in the SRED (Scientific Research and Experimental Development) space and practices focusing on specific industries. We also see accountants trying to stick to their core, and increasingly, accountants are getting away from offering bookkeeping services. All of this occurs while large firms continue to expand their footprint by acquiring smaller firms (remember MNP LLP’s acquisition of KNV Chartered Accountants LLP?). It is unclear what the industry will look like in 10 years time, but there is a good chance that your current firm will get acquired, and you might be working with multiple service providers instead of a one-stop shop.
Valuable, Real-Time Data
Business owners are now able to get more timely financial reporting as long as their books are kept up to date. In addition, cloud-based accounting systems offer better quality reporting than their non-cloud-based counterparts. In a time when small businesses are feeling intense competitive pressure, the need for more robust, up-to-date reporting is greater than ever. Realizing this, accountants focus more closely on providing clients with useful and timely reporting so that SMB owners can improve their businesses. If there is financial information that you have always wanted from your business, there is a good chance that your accountant can now pull it for you, and it will be even more valuable if your bookkeeping is up to date.
Though the accounting industry is changing, overall, this should benefit SMBs through simplified, transparent pricing and better-quality information. There are a greater number of alternatives than ever before, so if you are looking to make a change, you will have more options than ever before.
Partner with Enkel
The accounting field is rapidly changing, but some commonalities remain. Chief among them: All businesses - regardless of size or mission - need the latest technology to stay on top of these rapidly changing fields. Small and medium-sized businesses and non-profits may benefit by outsourcing these functions, allowing accounting experts to handle these challenges. At Enkel, our mission is simple: We're here to disrupt accounting by ensuring all businesses have access to world-class technology, cloud-based account services, and all the financial tools they need to succeed. Want to learn more? Contact us today, and let's work together to improve your finances and make your business more effective.
