Latest Accounting Trends 2020
Latest Accounting Trends 2020
Accounting industries continue to change exponentially, technologies such as AI, cloud-based accounting, automation continue to evolve. Majorly, most of the changes that has happened in the accounting field is from technology. Experts in the accounting field have witnessed these transformations and they predict that IT’s role will continue to increase in the accounting world.
We can all agree accounting software has been around for a very long time now, and cloud-based migration is a relative phenomenon that has been emerging for close to a decade. This transition to cloud-based systems is still a work-in-progress, although many businesses have already taken the bold step to invest in it. Cloud accounting or cloud-based accounting refers to when accounting software are operated in the cloud. The word “cloud” here means internet. Traditionally, accounting software will be downloaded, installed, used and hosted on a local computer, but with cloud accounting, the software will be hosted on a remote servers, with this you or anyone can access it anywhere in the world. When it comes to accounting, cloud-based computing technologies are revolutionary. So, if you want to be updated on the real-time financial data or you want your clients to be, then it’s simply not possible without the cloud. Also, if you need to connect with your accountants or other departments for pieces of information or data, you will need cloud-based accounting software that you can use to work across numerous departments at the same time. Is your organization planning to embrace AI? Again, you will need a cloud-based network because it is the only way you can access huge amounts of data. If you or your organization are still having doubts about the future of cloud accounting or about getting started with this system, now is the time to take that leap!
The overall adoption of cloud-based accounting currently is between 45 percent and 58 percent, depending on the size of the company, according to Accounting Today 2018 survey. Accounting Today survey also mentioned that 45 percent of small, 57 percent of midsize and 58 percent of large businesses select cloud accounting over desktop-based ones. Another of its studies projected that by 2026, the global market for cloud-based accounting software would be valued at $11.8 billion.
Automation and Artificial Intelligence
The automation of accounting is one of the latest trends today. Automation and Artificial Intelligence can save time for managing accounting activities, more so, cloud accounting software can allow editing reports easily if you find any mistake in reports, this software can easily change it within a few seconds.
Automation in accounting industry is an essential technology as it brings future to it, with Optical character recognition (OCR), data extraction and classification can be done easily. AI and automation keep revolutionizing with the way they can prepare accounts in a very short time.
Artificial intelligence can help automate your bookkeeping tasks, AI’s ability to recognize images means there will be consistency when classifying accounting entries, and human errors can be minimize. Another way AI helps in accounting is to help analyze past records based on the latest developments which can help predict future occurrence.
Blockchain is another massive accounting technological trend that is changing the way organizations handle fund transfer and its globalization. The working principle of the blockchain technology in the accounting sector can be explained using the case of a fraudulent transaction where an attempt is being made to hack an account, or someone is trying to “spend” the same amount twice, blockchain rejects this type of transaction. Until the introduction of blockchain, individuals and corporate organizations have been handling financial transactions through a bank or some financial entity in the middle. Blockchain tech eliminates the need for these entities and provides improved security; this enables users to make transactions directly. A blockchain is a form of “trustless society,” which does not require a middle entity like banks to function.
When you are making any financial decisions, you must have the right information at hand. Data mining that will help companies make critical management decisions have been brought by new software and database techniques, along with advancement in data centers. Are you still looking at ways by which data analytic can influence an accountant’s function in an organization? Well, we all know accountants work with data outputs and a vast amount of data, which helps them assess business performances within their organization. From these analyzed reports, they can view and access trends or any unusual activities within the industry. The information gathered from accounting will always be an essential element, especially when making business decisions. You must focus on this financial information, especially the data analysis of fiscal accounts.
E-commerce has been around for more than 40 years, and it has entered the era of shopping from home, overnight delivery, mail order catalogs, using credit cards etc. The internet has been able to take e-commerce to a much-expected height by making it an alternative for traditional purchases. This E-commerce information and technology trends will be helpful to accountants as it provides details that will allow them to find the actual cost of products. Information and technology that come with e-commerce will also enable accountants to match the real value of products with advertising expenses.
Usage of accounting software
Accounting firms now make use of different accounting software with different functionalities such as multi-tasking, optimization and customization to make their work easier, faster and accurate. Some of this software include Xero, Gusto, QuickBooks, Sage X3 and many more. According to a report by fortune business insight, it is said that accounting software market will experience a higher level of progress in years to come.
Cryptocurrency have their roots in blockchain technology, this system in accounting offers a decentralize and an open ledger where all transactions are made transparent coupled with high level of security. There are many cryptocurrency accounting software available today, some of them are Bitcoin Taxes: This is used to report income and capital gains from cryptocurrencies. Zenledger: this is an accounting software that features trade history enablement, taxation, and auto-fill forms Softledger: this is a financial management platform that is use for accounting cryptocurrency and taxation purpose.
Big data in accounting
Big data in accounting has become a thing for a very long time now, for many firms, it represents an opportunity for expanding their horizon and offer new service delivery. One major example where accounting is using Big data is in auditing. Firms use what we call audit sampling to detect issues in any transactions, big data comes in handy here as it can help identify exceptions and outliers in a very large data set. Big data helps improve client experience and allows accounting firms to provide more accurate and secured services to their clients. The data they make use of for their reports will be more accurate and agile compared to some data sets done in the past.
That social media has affected many industries across the world in a very positive way is not an overstatement and accounting industry is not left behind in this trend. Social media has helped accounting firms to increase their online presence, increase sales and profit. Social media platform such as Twitter, Facebook and Instagram, LinkedIn can help your company keep in touch with your customers and firms can use social media tools to monitor industry trends.