The Accounting Industry has played a vital role in the world for a while now. With the rise of technology, the nature of this field has become increasingly analytical. Accounting software is increasingly anticipated to focus on bringing novel practices and improving services and customer experience. It takes over the more boring tasks of accounting with accuracy and precision.
The field of Accounting has been popular for its specialized, high-paying jobs. One often needs a graduate degree in Accounting or related subjects to enter the industry. However, it has also been boring and exhausting, deterring people from actively pursuing it. Thanks to the technological revolution, we are ready to put those days behind us. Read on to discover the biggest trends impacting the Accounting Industry in 2022.
1. Cloud Accounting
Cloud allows companies to store their data online on third-party platforms such as google apps. The data entered here can be accessed and edited by all parties given a permit by the main author, allowing multiple people to work together on files. All one needs to use Cloud Accounting is the internet. They are not bound to be under the same network or in the same location to go through or make edits to the financial database of the business.
For instance, employees and external auditors can access the database directly through the internet. Cloud Accounting is just one of the many new accounting industry trends. Its greatest benefits include enabling the finance department to work remotely without compromising the database’s safety. It led to opportunities for better collaboration among employees, clients, and auditors. Additionally, it ensured accuracy, now that various people can scour through and edit the data. This level of transparency makes it easy to spot errors and rectify them if any such cases occur.
2. Blockchain Technology
Blockchain technology distributes the database of a company across a network. The database structure is in block form that is linked together through chains. As each block fills up, it gets locked, and new blocks are subsequently formed and added to the link of chains. The fact that the data entered is not changeable is a fundamental feature of this technology. For instance, if someone wishes to make any changes to the database, every network member will have to know about it. Once the changes are made, they will alter the block’s hash codes.
Hash codes are a mathematical function that gives each block a unique code that links it to the other blocks on the chain. As a result, any attempts at hacking or forgery will not go unnoticed, making blockchain a secure and fool-proof technology. Making any errors are also slim, hence ensuring accuracy.
Every individual can view all the listed transactions in any block across the chains. Transparency means it is impossible to hide any inconsistencies or frauds from the members and external auditors, ensuring data safety and accuracy. Due to this advantage, introducing this technology is the top priority of many companies across various industries, including banking and Cryptocurrency.
3. Automation in Accounting
Automation allows you to do repetitive tasks automatically through accounting software. For instance, the system creates the double-entries and posts these entries without requiring human assistance. That saves time and ensures accuracy. Many processes, such as manually feeding the data into the system, have been replaced with short, quick steps. Over the years, automated accounting has become an integral part of the finance team at any company. The system continues to grow due to the numerous benefits it offers.
First and foremost, it saves costs of documentation, paperwork, and, most importantly, office stationery. Furthermore, it gives detailed insights into the company and its clients. The best part is that it takes care of the boring admin work, hence freeing up time for more interesting, analytical jobs.
4. Data Analytics in Accounting
With automation catering to the data entry part of the job, accountants have more free time to focus on strategy and forecasting for the future. That is where data analytics comes into play. It enables the organization to collect critical data, such as a better grasp of revenue trends for their clients or a better awareness of a company’s present financial situation. It includes predicting any financial disasters and efficiently figuring out how to prevent them from adversely impacting the firm. Alongside this, data analytics can help a client with their investment patterns. It includes identifying least-cost projects and their potential profits and gaining a competitive advantage over their competitors in the market.
5. Upgraded Accounting Software
Previously, accounting software was to support accountants in large businesses. However, with the rise of automation and artificial intelligence (AI) coming into the limelight, the demand for accounting software has increased dramatically. Employees need to have a working knowledge of MS Excel, at the very least. The entire financial database has been shifted to software such as Quickbooks, which has evolved from MS Excel. However, Quickbooks and Excel are no longer the only software available. As such software is becoming an absolute necessity in the industry, developers are coming up with increasingly simplified and user-friendly applications. That can be readily implemented across the finance departments, regardless of the company’s size.
Yes, it is not popular with vast multinationals anymore. Still, an absolute staple for local small and medium enterprises, too, catering to their day-to-day invoicing, for instance. Although various third-party software is available, big companies are highly likely to have their software developed based on the basic framework.
Like all other industries and departments, the world of accounting and finance is also swept by the technological side. With technology taking over the administrative tasks, the nature of jobs in this industry is likely to become highly analytical and specialized. The demand for accountants will mainly be for strategic and advisory roles, for instance, appraising investment projects, deciding on revenue strategies, etc.
The COVID-19 pandemic elicited great changes to the organization’s operational structure. As a result, we will likely see the finance department shrink in physical size. But expand online as cloud accounting and accounting software allows individuals to work remotely, saving costs and increasing mobility. It does not mean the industry will shrink. The industry is expected to have a compound annual growth rate (CAGR) of 6% by 2025. Coupled with the numerous benefits it’s provided, new technologies are expected to flood the accounting industry to boost efficiency further and save time.
Safe to say, it is now that the accounting industry is truly entering its 21st Century.