The accounting industry has usually been more traditional. The general notion has been against automation. This stemmed from the fear that accounting needs complete human control. The accounting industry needed humanly managed services. But recently, it gave in to the advancing technologies.
In the post-pandemic years, accounting has brought in the effective use of technology to add the dynamic factor. Terms that were seemingly only to be used for the technical world are stepping into the financial sector. The CPA examination represents this perfectly. Since 2021, makes a special room for topics like automation, data-driven mindset, QuickBooks hosting, and other technological analytical features.
QuickBooks has taken the accounting world by storm, but there’s a further development in the platform itself. Whether you’re an accountant or you run an accounting firm, the advancement implies that it is relevant to stay up-to-date with the latest accounting trends.
And most of these trends are dictated by the inclusion of technology in accounting. Considering the increasing acceptance of remote work, the upgrades are just beginning.
We’ve compiled a detailed list of every trend in accounting that you can follow in 2022. Let’s dive in.
1. Automated Accounting
70% of companies happily reported an increased ROI after adding automation into their accounting system. IT services in accounting speed up and systemizes the entire accounting procedure. Accounting is actively inviting automation into the domain. The feature has ambitious hopes to smoothen and shorten the accounting procedure.
Automation brings in the effective feature of controlling your AP/AR. The system extracts and compiles data, makes and receives payments securely, and processes payments. The automated accounting system forms the base for IT-managed services.
A study by ACCA reported that at least half of C-level executives expect automation to join hands with accounting shortly. The influence of IT services in accounting is still in the nascent stage.
2. Cloud Accounting
Protection. Quick Access. Multiple Users. These words define the cloud-based technological trend that is taking the accounting world by storm. Cloud accounting is a revolutionary technology that is replacing the traditional costly tech advancements. The system is built to promote personal networking, provide remote access to data, effective communication, and a vast data store.
The cloud accounting feature has completely innovated QuickBooks by hosting it on the cloud. With QuickBooks hosting, the software is taken to the cloud where all the data is secured and stored effectively. This makes for a simple, quick, and inclusive innovation.
Maintaining your business books online skips the hassle of sharing data in those hefty zip files. People with valid credentials get access to the data from anywhere in the world.
The online dashboard represents users’ financial data in well-described and easy-to-understand graphs and tables. Cloud accounting simplifies the overall accounting process seamlessly. All relevant data related to your bank account, including sales, expenses, and revenues are stored in the cloud automatically. The tedious process of noting down and reporting each transaction has been automated.
Yes, blockchain technology is taking over accounting as well. Technology is potentially going to be a regular part of our daily lives.
Statista reported in 2020 that around $1.1 billion was spent on blockchain technology. Walmart has already taken the initiative to implement beta blockchain technology into its supply chain. If you have some idea about blockchain, you’ll know its primary job is to maintain ledgers. It only makes sense that it saw its use in accounting.
With Hashing, blockchain makes it simpler to transfer ownership of assets under a secure framework. It checks that the information on the loop cannot be accessed by a third party.
4. AI in Accounting
Accounting calls for repetitive tasks. You’ll find yourself repeating the same process over and over. It’s draining. Artificial Intelligence takes it from here. Its RPA (Robotic Process Automation) streamlines the accounting process and lifts the burden off your shoulders.
AI is here for good. It’s a proven way to speed up the accounting process. The technology optimizes extensive tasks like analyzing data, identifying trends, and organizing cash flows.
With the integration of AI in the accounting system, significant structural changes result in a business.EY has invited AI into its business to analyze lease contracts. The technology piece captures and records information within a stipulated time frame, effectively handling huge books of accounts.
5. Forensic Accounting
This is a trend growing under wraps. The main focus here is to identify and report fraud, inconsistencies in data, and money laundering. Forensic accountancy finds its primary use in legal situations and audit firms for the investigation of financial accounts. Professional forensic accountants showcase a skill in criminal and civil law intermingled with accounting and IT.
This system of accounting identifies criminal activity and strategizes on how to prevent such crimes. With risk management programs in place, the unreported losses owed to contract breaches and other defaults are minimized.
6. Remote Working Techniques
The pandemic has started the trend to work from your home. And it’s here to stay for good. A survey by Accounting Today proved that 85% of CPA firms are willing to let their employees work from home lifelong.
This points towards the automation of accounting techniques, with an increasing contribution of technology in accounting. Accounting software tools are advancing and bringing people from all across the world closer together. With an online database to program, organize and analyze data, the accounting world is moving remotely. Teleconference software has subsided the need to meet physically to gather reports and attend presentations.
7. Big Data
Accounting accounts for a ton of data. It ranges from unimportant to extremely relevant information, under the same roof. Normally, it gets difficult to arrange and filter out the data.
Big Data helps professionals identify valuable data and convert it into actionable insights that they find useful. The extensive assessment methods accompanying Big Data organize information effortlessly and iron out the creases in data.
63% of accountants aim to implement and use Big Data in their accounting system within the new couple of years. Many big firms have already started preferring and recruiting professionals who have a deep understanding of Big Data and other scientific analytical tools.
The way forward…
We’re witnessing a gradual yet strong shift from a reactive to a proactive accounting system. However, accountants need not worry about job losses due to automation. Even automated software cannot function without human input.
The correct approach here is to upskill and understand the new ways to capitalize on these future trends. There is an increasing need to stay on your toes and keep up with the latest technological advancements in the accounting industry.