Accounting Trends to Pay Attention To

Even if accounting was just your ability to track your income and expenses, it would be one of the most important functions for both enterprises and individuals. However, it is much, much more. It is impossible for any industry to exist without an accounting system, and it’s nearly impossible for a business to stay organized without accounting.

Aside from this, accounting helps evaluate business performance. This gives people insight into whether they’re on the right track. It also helps investors pull out or commit even harder in order to make a profit.

Almost every organization and every individual has their legal requirements in terms of taxes, which is why accounting helps you stay within the law.

Still, to be able to do all of that, accounting is constantly evolving. With that in mind and without further ado, here are some of the most important accounting trends worth paying attention to in 2021.

Accounting Automation

The most important goals of professional accounting are accuracy and reliability. People often outsource their accounting to ensure that all their transactions and financial processes are automated and that there are no missed deadlines. They also want efficiency in claiming deductions and a chance to take advantage of numerous tax benefits.

All of these tasks can be achieved through accounting automation.

First of all, the biggest difference between an accountant and a bookkeeper (in practice) is the fact that an accountant also acts as a financial advisor. The bookkeeper, on the other hand, only keeps track of financial processes and documents them. With the help of accounting automation, professional accountants will be able to utilize data with greater efficiency.

This will also allow for a more efficient workflow process and a lower margin of error. The latter is especially important in accounting, seeing as how it would result in fees and penalties. It is a way for your accounting to save money.

Of course, the importance of accounting automation for your public image cannot be neglected either. Financial problems, audits, missed payment deadlines, etc., can become a serious blow to your company’s image. In the end, your relationship with your strategic vendors and customers might deteriorate. Why risk it when accounting automation can help you avoid it all.

Data Value Increases

Previously, we’ve hinted at the analytical role of an accountant. Since present-day technology allows accountants to get more insight from this data, the value of data rises quite sharply. With the right approach, accountants and SMEs can easily increase the value of their operations.

Apart from the availability of this processed data and information, their availability is also simpler than it ever was before. Through the use of IIM (intelligent information management) tools like M-Files, all the relevant financial data can be easy to access at any time. This allows professionals to keep all the documents in one place and even automate manual accounting processes.

Accounting firms are likely to become more efficient on their own. By tracking client progress and developing more accurate financial forecasting models, the idea of outsourcing to a professional accounting firm will become even more enticing. Speaking of which…

Outsourcing Your Accounting

Third-party accounting is hardly a new trend. Still, in late 2021, it is expected that this rise will continue in full swing. This is something that benefits everyone (both accounting firms and their potential clients).

With these tools and by making use of automation, even smaller accounting firms will be able to take on more clients (without compromising the quality of their service).

Accountants will also be able to expand the range of services offered. This is because some of these tools will allow them to make up for a lack of expertise in certain areas of accounting. The savings on labor cost achieved this way (by not having to bring in a specialist) would increase the profitability of the accounting agency in question.

It is also worth mentioning that due to COVID-19, there are a lot of new businesses and businesses operating under a new business model. A lot of enterprises had to resort to using third-party delivery providers. As a result, the total number of transactions (many of which even require three-way matching) has increased. This makes the necessity for outsourcing your accounting even greater.

Better Insight into Operational Factors

The biggest problem that many accountants faced in the past was the inability to see the full scale of the company’s operations. This is what made accurate fiscal projections quite hard to make. Today, with companies automating all their processes, some of which are even using complete business resource management programs, this is no longer the case.

While third-party accounting firms may not have all this information available at all times, they could get an accurate answer on-demand. Now, the availability of this information is, on its own, not enough to change the nature of this collaboration. Improved communication channels between the business management and the accounting department (in-house or third-party) are also a requirement.

The tools are there, but this doesn’t mean that everyone will take advantage of this amazing opportunity.

Cloud Accounting

Cloud is rapidly taking over the business world. In a situation where most of the business world shifts towards remote work, it is only logical that a similar shift towards the cloud will occur.

The greatest advantages of cloud accounting are:

  • Scalability
  • Security
  • Availability

The thing is that an average manager has full access to accounting services and the fact that they have an on-demand insight.

Global availability also makes it easier for entrepreneurs to establish international businesses. For instance, when you have to pay local taxes (before repatriation of profit), it is far easier to do this through a local accountant.

Cloud accounting also makes collaboration with these international accountants much easier. For enterprises who are looking for the best service, this opens up a much bigger talent pool. One more hidden perk of this is the fact that higher competitiveness means a higher quality of service and even more competitive pricing systems.

Sharing important documents and allowing multiple parties to work on them simultaneously can also make some of the largest, most demanding projects a lot easier.

In Conclusion

Since the majority of the above-listed trends are tech-related, it is safe to say that the future of accounting is tech-savvy. Also, with ever-expanding rules and regulations, as well as the more complex business world of the 21st century, there are only two means to reliably handle your accounting processes. These two means are:

  • Outsourcing
  • Technology

While they are quite potent on their own, they are definitely the most efficient when used together. Fortunately, you always have plenty of options to choose from.