Top 4 Accounting Trends To Lookout For In 2020

Undoubtedly, 2020 will bring along a lot of uncertainty and changes in terms of how accounting and finance firms work. Bookkeepers and accountants will have to keep a close watch on the trends to prepare for changes in markets, policies, and regulations.

Top 4 Accounting Trends:

Given the disruption in the accounting industry, professionals must understand the trends that will take the center stage and adopt them in the best possible manner for their transformation.

Here are the top 4 trends that will shape the finance and accounting industry in 2020:

Trend #1: Artificial Intelligence And Automation:

The continuous growth of AI and machine learning have ushered in the era of automation. The trend will continue in the year ahead as the accountants will be freed from burdensome administrative tasks and spend more time on higher-order tasks.

Using cloud-based accounting software, accountants will be able to automate tasks like data entry, invoice capture, and bank reconciliation. They will get accurate data and reclaim their time back to do valuable business with clients.

A study by Forbes indicates that the year 2020 will be focused on automating manual tasks such as banking, audits, payroll, tax preparation. This is touted to be the biggest disruption in the industry in more than 500 years.

AI will complement accountants and business owners by drastically reducing workload and accounting errors, allowing them to take up advisory roles. It doesn’t come as a surprise that many accounting firms have already integrated AI-based automation capabilities into their processes.

Trend #2: Cloud Accounting:

The latest trend in the accounting world is marked by the shift to “the cloud” to save money and improve user experience.

Cloudflare, a leading cloud service provider defines the cloud as, “The servers that can be accessed over the internet, and the databases and software that run on those servers. These servers are situated in data centers across the globe. The companies using cloud computing no longer need to manage servers on their premises or run software applications on their machines.”

The accounting software is hosted on the servers stationed far away. The accountants have to simply provide the data, it is processed there and sent back to them. By switching to the cloud, the companies will be able to cut IT costs and overhead.

For example, not having to maintain and update their servers will save costs for small businesses that couldn’t afford in-house infrastructure. They can now outsource their IT needs conveniently through the cloud.

Besides, the cloud will make allow companies to go global as the employees and clients will be able to access the same applications and files from any location.

Trend #3: Blockchain:

Another trend to look out for in 2020 that will revolutionize accounting and auditing professions is block-chain. The decentralized ledger offers a substantially advanced method to manage finances and money transfers.

Till now, financial transfers were being done through a financial organization or a bank serving as the mediator. Blockchain technology removes the need for mediating entity, and thus improves security. This will allow people to make transactions or transfer funds directly.

Although this idea is still in its nascent stage, its adoption will surely begin in 2020. Until then, it is recommended to watch this concept closely.

“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” – Don & Alex Tapscott, authors Blockchain Revolution (2016).

Merriam-Webster defines blockchain as “A digital database containing records of financial transactions that can be simultaneously used and shared within a large decentralized, publicly accessible network.”

Trend #4: App Integration:

With smart devices becoming more powerful and faster, their usage has gone up radically of late. People are now used to doing their work on the go. They are accessing information online and using various applications via the internet.

Accounting firms have expected this possibility since long and have worked tirelessly to offer mobile-optimized applications and accounting services.

App integration will prove beneficial for small to medium business owners in managing bookkeeping without delay. Similarly, large businesses will be able to create invoices, maintain expenses and cash flow statements, and monitor sales directly from smart devices tucked in their pockets.

This will be an incredible shift that will add mobility in the cloud accounting.

With a new workflow solution being added every day, more online accounting Services apps are available today than ever.

Conclusion

The accounting industry promises a great future for anyone willing to adopt new skills and technology. This applies to both accounts professionals and finance firms.

AI and automation are set to reduce the manual workload, involving repetitive tasks. However, there won’t be much change at the planning and decision-making level.

Cloud accounting software and online accounting will step up workflow, bringing about improved customer satisfaction.