Top 10 Trends in Modern Accounting and Finance
Accounting trends are changes in the system and landscape of the accounting and finance professions. How we know the accounting industry today differs from what it was a decade ago. There is a greater emphasis on data analytics, automation, and technology for performing accounting tasks and functions. Although the field of accounting and finance was already heading towards modernization and automation, the COVID-19 pandemic accelerated this change. Not only are these tech trends useful for accountants and finance professionals, but businesses can leverage financial technology to enhance their growth and strategy. Here are ten trends to look out for in the accounting and finance industry.
Top Accounting Trends
1. Automation
Automation is the technology used for relaying tasks previously performed by humans. Automation is not just for factory robots and the tech industry; many repetitive accounting functions have also become automated. For example, processes and functions related to approval workflows, bookkeeping entries, bank reconciliation, revenue recognition, and lease accounting have been automated. Though most accounting can be automated, the lack of digital acumen of accountants and finance professionals delays the use of technology and automation. By incorporating AI-driven accounting software, many firms are shifting to technology.
2. Data Analytics and Forecasting
Small and large-scale businesses are encouraged to use budgeting, planning, and forecasting software for their business management. The use of data, analytics, and visualization help make better sense of accounting data for business decision-making. Most masters of accountancy programs nowadays include a course or two on business analytics or statistical reasoning. The accounting and finance fields are more analytical than ever, and technology has paved the way. As a result, there is an increased demand for accounting experts who are analytical and proactive.
3. Artificial Intelligence (AI)
Like analytics, AI’s use has increased across various industries, including accounting and finance. For example, AI has streamlined accounting tasks and increased the productivity and efficiency of accounting professionals. With AI and automation, finance and accounting professionals can relegate redundant and repetitive tasks. As a result, professionals can spend more time on high-value and insightful tasks. At the same time, machines and robots reduce human error and cost by streamlining finance and business operations. For instance, some accounting firms use AI to analyze lease contracts to facilitate information collection tasks like commencement dates, termination options, or amounts due.
4. Accounting Software
Accounting professionals rely on AI and robotic process automation (RPA) to eliminate time wasted on redundant tasks. To actualize RPA, accountants must harmonize transactional data from multiple sources and formats into readable and structured forms. Since AI needs data to function effectively, humans need to feed valuable data into AI systems. This is where accounting software is used. Most accounting software solutions are integrated with cloud-based technology for easy access and safety of transactional data. In addition, enterprises have invested in systems that combine accounting software and data with business areas like order and production management, marketing, and supply chain. As a result, accounting software is faster and frees time for professionals to invest in delivering actionable insight.
5. Big Data
From all we have discussed so far, it’s evident that data plays a vital role in financial decision-making. Data is more than just spreadsheets and figures today. It’s analytics and forecasting that accountants can rely on for better decision-making. Now, accountants have structured and unstructured forms of data. These large datasets can be analyzed and structured through natural language processing (NLP). With NLP, AI, and other technological tools, financial experts can better monitor financial matters in real-time. Since data is everywhere, almost every accounting process has been digitized. As a result, data gives valuable insight and helps finance professionals serve their clients better.
Read More: How to Gain Data Analytics Capabilities in Finance & Accounting?
6. Cloud Computing
Cloud-based storage solutions have been around for some time now. Enterprises and individual users are shifting from hard drives and unsecured storage options on internet servers to cloud-based storage. Cloud-based accounting software works similarly. Transactional and other financial data is saved within the cloud-based platform or software and is accessible by any authorized person. You can also integrate cloud-based software with applications like Salesforce or other SaaS applications relevant to your business. Cloud-based computing is expected to improve accounting storage and security verification while increasing collaborative efforts among professionals.
7. Blockchain Technology
Blockchain, though a relatively newer trend, will considerably improve the accuracy and productivity of accounting professionals. The distributed ledger feature of blockchain technology eliminates the need to rely on third-party intervention for entering information. It also eliminates the need to rely on auditors for reconciling ledgers. Not only does blockchain save time, but it reduces the risk and impact of human error in accounting and financial matters. Though practical, blockchain doesn’t eliminate the need for finance professionals. The industry still needs its expertise for auditing and assessing transactions and other processes. The difference that blockchain has introduced is in terms of productivity and efficiency. With blockchain technology taking care of redundant and repetitive tasks, accounting professionals can focus on business decision-making and advisory roles.
8. Online Collaboration
Especially with cloud-based accounting software, online collaboration and remote working has become increasingly popular in the accounting industry. Where previously it was difficult for experts and professionals to collaborate in person for critical financial tasks, now, with online communication tools, they can communicate securely from anywhere. In addition, finance and accounting professionals can benefit from e-signature software, cloud storage, and video conferencing tools.
9. Machine Learning
Machine learning is another way for accounting professionals to leverage technology for RPA. This approach has introduced us to “continuous accounting,” which relies on automation and technology to perform tasks at the end of a financial period. Machine learning is used in financial analysis, planning, and refining data models for forecasting. Not only that, machine learning can help accountants and enterprises address matters regarding internal control and governance. Machine learning is also used to detect fraud, provide investors with financial advice, and automate trade and other economic activities.
10. Outsourcing
Though not strictly an accounting industry trend, outsourcing is quite common in finance. Small and large-scale organizations rely upon and benefit from outsourcing in their financial and accounting matters. For example, small businesses hire remote workers or outsource their financial units to avoid managing more people. This saves time and money while streamlining their financial management. In addition, outsourcing allows you to interact with accounting experts and professionals with different skill sets beyond your breadth of expertise or knowledge.
Conclusion
The technological revolution of the 21st century continues to surprise us with its indispensable role in every business, specifically accounting and finance industries that rely heavily on people. While technology and automation tools help increase efficiency, it also requires an increased focus on cybersecurity. Nonetheless, technology and digitization of accounting processes have allowed professionals to serve their clients better and employ objectively efficient practices.
Mahesh Kumar is a dynamic marketing consultant and tech enthusiast with a passion for driving business growth through his innovative strategies and cutting-edge technology. With 6 years of experience in the industry, he has helped numerous businesses leverage the power of digital marketing to reach their target audience, build brand awareness, and increase sales.
