The Future of Accounting. The Rise of Software & Service
In recent years we’ve witnessed the transformation of the accounting industry take place right before our eyes, with many firms transitioning from traditional accounting procedures to using digital software (like ourselves). There are no far more softwares and services that businesses can use, giving them options for all of their wants and needs.
As a society, on a whole, we are now demanding quicker and more convenient solutions to our problems, and as technology advances, it provides us with just that. For example, business owners who are wanting to spend as little time on Adhoc jobs now have numerous softwares to choose from to solve this problem - so that they can focus on other parts of their business.
The accounting industry is the perfect example of an industry that is keeping up with its consumers' needs, and with the introduction of accounting software over the last decade, the industry has created a much smoother, quicker process for both businesses and customers. It has become especially more convenient for smaller, startup companies that may not be fully equipped when it comes to accounting.
As well as the demand for better services, there have also been external factors that have played into the evolution of accounting, for example; the coronavirus pandemic (we know you’re probably sick of hearing about this - but it has played a big part in the way businesses run today) When the pandemic hit the U.K, most if not all industries had to adapt to moving their services online to keep up with consumers needs. Accounting firms that didnt before became familiar with software that made it easier to hold relationships with their clients - and since then the online accounting industry has expanded massively.With the use of the cloud, client and staff engagements can be virtual ,and accounting professionals and firms - whether well-versed in technology or not - were quickly catapulted into full-remote practices.
When an industry adapts to new trends and changes its traditional functions, it’s bound to leave people with questions - especially in an industry that is now taking steps to become majoritively digital.
‘What is the demand for accountants in 2022? What technologies are going to be popular for the industry? What benefits are there to using digital accounting software?’
It is no secret that advances in technology are taking the accounting industry to new levels. So, whether you’re a seasoned accounting professional looking to stay on top or whether you’re an aspiring newcomer, you’ll want to understand the trends that are emerging in the upcoming year, and what the future holds for our industry. If you’ve had any of these questions yourself, or you’re within the accounting industry and wondering what’s next, then look no further. This blog will provide you with all of the answers and more, and keep you up to date with what the future holds for accounting.
How the accounting industry has changed so far
As briefly discussed, that impact of the pandemic and technical developments we’ve seen some major changes occur in the accounting industry - significantly in 2020-2021. Like most businesses, the changes seen have caused an obvious shift in dynamics in terms of productivity and how companies are now structuring their businesses.
Where there was once a vision of accountants drowning in stacks of papers and busy diaries filled with appointments and client information, there is now the idea of more technologically advanced business people, who have far more strategic processes. Accountants have taken the giant leap from task-oriented projects, to becoming modern-day business advisers. The help of apps that reveal analytics and perform tedious tasks in a much shorter time, along with automated tools, have made financial accounting operations efficient, organised, and far more productive - which is exactly what consumers and businesses are looking for today.
So, what advances can we expect to see in 2022? And how will they affect businesses?
Cloud computing may be something you've become familiar with in recent years - most probably due to the iphone. Famously the apple iphone uses cloud computing to secure your data, in an invisible file with endless storage - making it easy to change phones without losing your files.
Well, this is something that is now gaining popularity in the accounting industry and we predict that anyone who is not using cloud computing to help with their finance and accounting work already, will be introducing this into their business model this year (and you most definitely should).
So, why use cloud computing for accounting?
Cloud-based accounting systems are now commonly used by many accountants to streamline information and make it easier to access. When using these cloud-based systems you can access essential data from anywhere on the web, regardless of the time or where you are. This also makes real-time data analysis easier because no matter the size of the file it can now be stored in the cloud, also providing people with unlimited storage space. This is hugely beneficial for accountants, explaining the rise in the number of firms that are now using this process in their practices. An important advantage of using a cloud-based system is the continual updating of information it provides, allowing accountants and clients to analyse data and make decisions based on cutting-edge information. This ensures that clients are receiving the best possible service from their accountants.
As new intelligent technologies, such as the internet of things (IoT), artificial intelligence (AI), and machine learning, are integrated into the cloud, cloud computing has witnessed significant expansion. Due to this, the future of accounting appears to be cloud-based.
So, which are the best cloud systems to be using, and how do they work?
- Quickbooks online
Quickbooks online is one of the most widely used cloud accounting software products on the market - used by accountants, sole traders and small businesses to help manage finances in real-time, on a secure and easy to use platform. With a range of features, options, and price points, QuickBooks cloud accounting helps meet many needs - now serving 4.5 million global QuickBooks Online customers.
Xero is an entirely cloud-based accounting software for small businesses that perform bookkeeping functions like invoicing and payroll and allows you to connect to a live bank feed. Although it wasn’t created for accountants to use, it has become a popular software within the accounting industry as its built-in accountant access allows accountants to work with their customers easily without having to download and share files - making the transaction easy and accessible for both parties. Because of its simple and straightforward design, Xero is one of the easiest cloud-based accounting software platforms to use which explains its popularity within the industry, with 2.74 million subscribers, with a 39% increase in 2021 from the year before.
The softwares discussed above are all featured in the top 10 best cloud accounting software list and taking that into consideration, it could determine a lot about the future of the accounting industry, and what direction it could be heading in. For example, 3 of these companies were created to help small businesses and freelancers have an accounting platform, so they don’t have the worries of finding an accountant and paying for it themselves.
A lot of the accounting software available now are monthly subscriptions, and solely online, where businesses can access their finances and pay taxes from an app on their phone, which in turn lessens the demand for physical accountants. This has made the use of accountants far easier for small, start-up businesses as they have everything they need in one place, and can rely on one software to handle all of their needs. Arguably this could make people question the future of accountants - now that businesses have everything they need online.
Another trend that is set to impact the accounting industry is the introduction of blockchain technology, a computer-based recording system that uses cryptocurrency within a user-to-user network. Blockchain has most recently become known from its use in Bitcoin — a digital currency in which a record of transactions is maintained, and new units of currency are generated independently of a bank. The technology is predicted to progress substantially over the next year which is why we think its important you learn about it!
This all sounds a bit complicated… we know, so the most simple analogy for understanding blockchain technology is by imagining a Google Doc. When you create a document and then share it with a group of people, the document is distributed rather than copied or transferred. This creates a decentralised distribution chain that gives everyone access to the document at the same time. No one is locked out awaiting changes from another party, while all modifications to the doc are being recorded in real-time, making changes completely transparent.
Blockchain enables users to access ledgers in real-time, as well as create smart contracts and record transactions, so it’s no surprise that the system is catching the eye of accountants and they’re implementing it into their practices. Blockchain is a particularly promising and revolutionary technology because it reduces risk, eliminates fraud, and provides scalable transparency. In fact, many big accounting firms have already implemented blockchain technology, including EY, PwC, Deloitte, and KPMG - and it’s expected that many other accounting firms will follow suit in 2022.
The implementation of blockchain technology has the potential to improve the accounting industry by lowering the expenses of maintaining and reconciling ledgers and offering certainty over asset ownership and history. Accounting firms could use blockchain to gain clarity over their organisations' available resources and liabilities, freeing up resources to focus on planning and valuation rather than recordkeeping.
Whilst blockchain is positive in the fact that it brings advancements to the industry, it could also be seen as a threat to the work of accountants who are responsible for bookkeeping and reconciliation work, as blockchain works as a replacement for these roles. However, it could also open up a new focus on other roles and responsibilities within the industry that have previously been looked over. It also allows businesses to work with softwares that have quicker and more thorough processes as accountants can now focus on taking on more clients as they have more time.
Because blockchain is a relatively new to the accounting industry, many firms are still trialling and researching it, but it is expected to become a crucial part of many accounting firms' business models. It must be developed, standardised, and optimised in order to become a true part of the financial system. The task of developing blockchain-related regulations and standards will be difficult, but major accounting firms and organisations can help with their own experiences of using it.
Automated accounting tasks
When it comes to start-ups and smaller businesses choosing a software or accountant to partner with, ensuring that who they chose uses automated accounting is crucial.
Automation is a current trending topic in the accounting industry as it is set to soon make finance professionals more efficient than ever. Whilst some would say that automation is the ‘death of the accountant’ many others would agree that the use of new softwares gives accountants the opportunity to unlock their full potential and makes it far easier for clients to trust. Similarly to using cloud computing methods, automation allows accountants to finally move on from the smaller, tedious tasks, by introducing accurate, efficient, up-to-date methods that allow them to focus on other sectors of the business.
So firstly, what is automated accounting?
Accounting automation automates the most time-consuming aspects of an accountant's workday, frequently, in real-time. These systems, which are also known as computerised accounting software, conduct the number crunching and transaction tracking for you, so you don't have to create complicated ledger files or enter endless rows of data anymore. Key formulae are pre-installed, and reports may be created with just a few mouse clicks. The goal is to make the accounting process smoother by simplifying tasks that were once unnecessarily complicated.
Audits, tax preparation, banking, and payroll, for example, are just a few of the labour-intensive components of accounting that will soon be completely automated. Artificial intelligence (AI) will be utilised to build self-learning systems, which will automate repetitive and time-consuming tasks, leaving humans to handle the analytical and administrative tasks. Leading software businesses like Intuit, Sage, OneUp, and Xero, for example, use AI and machine learning to automate data entry and reconciliation in company bookkeeping - and in 2022 many firms will be following in their footsteps.
Automated accounting software isn’t a new thing, however, until recently, the tools we had to complete the processes were inefficient and still had to be operated mostly manually, still taking up a huge amount of time. For example, for as long as it has been around Microsoft Excel has been accountants go to automated software, but when using this you still have to input all of your recorded information yourself, taking up time that could be spent on other responsibilities - soon this will be seen as a thing of the past as accounting softwares become the leading platform in the industry.
So, why is this such a must have, and what benefits do these automation softwares provide?
Well, the most obvious benefit of automation is the time-saving aspect, letting software do what could take you twice as long is always a benefit as you have less on your plate and more time to focus on other responsibilities. It becomes especially convenient for businesses around financial closing times because if your team has been using it’s tools correctly, there shouldn’t be anything to reconcile as most of the data that you’d normally check and copy across systems has already been checked and copied.
Other benefits to using automated software
- Higher productivity
- Data accuracy
- Fast data retrieval
- Secure file storage
- Cloud access
- Real-time integrations
- Professional development
Accountancy Cloud….. the future of accounting
So, now that you’re up to speed with everything that has developed in the accounting industry over the last few years and the possible effects the industry may face, it’s time to look at the best option for you. As a business owner, someone looking to start a business, or whether you're just looking to find the best software for you - Accountancy Cloud is the future of accounting.
Finances can be tricky, especially if you’re a smaller, start-up business, and it is our mission to make them as easy as we can! We’ve created a seamless process where you can view your financials all in one place, within your personalised dashboard. The dashboard works alongside your existing accounting system making it easy for you to visualise your data.
With the use of automated services, which we know are the future, Accountancy Cloud provides you with world-class finance teams and in-house software that ease the pains that exist with managing the back office for every company. We provide a solution that manages it easily, tracks and controls your spending, and maximises growth. So say goodbye to all of the long, tedious tasks you once faced, and say hello to Accountancy Cloud.
To make things simple for you, Accountancy Cloud allows you to integrate your existing accounting systems - with a number of the top accounting partners globally. Accountancy Cloud seamlessly integrates with the services your business already uses, such as Quickbooks, Xero of even your bank accounts.
So, how does it work?
When you’re ready to switch to Accountancy Cloud you will be provided a finance expert. They will take time to get to know you and your business, give you all the answers you may have about Accountancy Cloud, and gather all the financial information they need to know - this could be from yourself or your current accounting system. Once you're set up you will receive live transaction data from your bank accounts, and accounting files, which will be automatically categorised, saving you all of the tedious jobs you once had. If your finance expert needs anything from you, they’ll get in touch - but other than that you can put your trust in us and we’ll make sure to make this easy for you.
Accountancy Cloud has created software that allows you to have everything you need in one place, no more paperwork or huge files - by using the best technology, and keeping up with the demands of the accounting industry. Join the 70% of our clients who switched from DIY bookkeeping and start running a smarter business today - stay ahead of the changes to come this year!
From Startups to Growing Companies, we’ve made it simple to choose the plan that’s right for you.
Hi, we’re Accountancy Cloud…
Hopefully, this blog has given you a better idea of what the future holds for the accounting industry, as well as how technology has helped revolutionise accounting and finance in recent years. We hope you now have all the answers you need and when choosing an accounting software you know what to look for. It's critical to keep up with what's changing in the industry and to have a software behind you that will make life as easy for you as possible, to help skyrocket your business - which is what we all want, right?
Here at Accountancy Cloud, we want to make your ecommerce business run smoothly by supporting all of your financial needs and queries. We offer the best online accounting, R&D credits and CFO services for ambitious businesses who want to grow. Take a look at our services page to find out what more we can do for your business. We work with startups with revenue of up to £15 million. Our mission is to help you succeed.
To learn more about Accountancy Cloud and how we can help you, get in touch today to discuss your unique needs and requirements.