Accountants played a vital role in 2020. Their services helped businesses navigate the challenges and surprises of a pandemic from a financial perspective. This support will need to continue in 2021, as they continue to assist in the roll out of key government support initiatives and the management of related compliance requirements.
Despite the increased compliance work available to accountants, the accounting industry as a whole will likely be affected by COVID-19 due to the impact on their clients and a reduction in demand for advisory services, with industry revenue expected to drop a further 2.6% in 2021.
To combat this, businesses must keep abreast of accounting trends or otherwise, risk losing their competitive advantage in 2021. Here’s our top three.
1. Automation and artificial intelligence (AI)
The pandemic has illustrated just how important automation can be for the accounting industry. AI and automation can relieve accounting professionals of time-consuming, manual tasks, freeing up more time to perform value-adding tasks such as analysing data trends, establishing client and interdepartmental relationships, and in 2021, providing that added support to businesses in terms of reporting compliance.
ReceiptBank's survey asked accountants what tools they believe will help them successfully deliver on 2021 plans, and 35% prioritised practice productivity features - a function that is at the core of automation and AI technology.
2. Cloud technology & remote work
The accounting industry was heavily affected by the change in work practices due to the quarantine regulations of COVID-19. In 2021, 1 in 2 accountants will work from home, and, to work remotely effectively, cloud technology is essential. For accountants, cloud tech covers everything from accounting software used to complete financial reports and collate data through to video conferencing and document sharing that allows for streamlined communications.
Thanks to cloud accounting, businesses are no longer constrained to do business locally. Offshoring basic accounting tasks has become popular due to its reliance on cloud technology. Not only can businesses save on employment costs by outsourcing to countries with lower costs of living, but the quality, communication and collaboration between accountants onshore and their counterparts offshore is maintained by these cloud-based programs.
Cloud-based technology may even be the answer to securing clients and loyal customers during challenging times. Clients utilise accounting software in their own business affairs, in conjunction with many integrated applications such as point-of-sale, inventory management and online stores. If accountants understand how to extract relevant accounting data from these cloud-based systems, instead of asking clients to send through reports and figures manually, then accounting firms will be able to maximise client interactions and, ultimately, introduce a key selling point to their business.
3.The role of data
The overall success of strategic planning and advisory services that accountants can offer businesses in 2021 will entirely depend on data. "With the use of big data, accountants and experts transform key internal data sets into secure, vigorous, and important data analyses," says FinanceOnline.
It's not new to hear the word 'analytics' alongside 'accounting' but, as technology, AI and automation infiltrate the accounting industry, we can expect more comprehensive data to become available to accounting firms, further influencing their important role in business decision-making positions.
Professional associations, such as the Institute of Management Accountants (IMA), emphasise the importance of continuous learning for accountants in data analytics. This is so accountants will have the skills needed to compete in post-COVID environments.
Think of it this way, technology goes where data can be streamlined, and the accounting profession is full of it. So, not only will accountants need to understand accounting principles and frameworks, but also become data specialists within their own fields to become valuable advisors to their organisations.
Looking forward in the ‘new normal’
The finance and accounting industry is speeding towards a transformative period. The pandemic's impact has significantly changed how accounting professionals operate.
During 2020, when cash flow was poor, businesses held off seeking costly advisory services from accountants. On the flipside, they relied heavily on them for guidance and compliance during JobKeep, Cash Flow Boost and other government rollouts.
Now, in 2021, the Institute of Public Accountants believes that the value of accounting services will start to increase as these 2020 government support measures start to wind up.
If 2020 was the year for addressing the sudden accounting challenges brought on by the pandemic; 2021 is the time to capitalise on opportunities and move towards more strategic long term planning - becoming crisis managers with long-term views.
With 60% of accountants stating that advisory services would be their key growth driver in 2021 and 75% stating that advisory services would lead to growth this year, it's important businesses incorporate these forecasts and the above key trends when implementing their accounting plans for 2021.
How to capitalise on these accounting trends
Accounting professionals will need to step into the vital role of 'business adviser' if they are to grow and meet the demands of their clients. Businesses will need this help if they are to continue operating through the COVID-19 and post-COVID business environment.
Adopting new technologies and upskilling in data analytics and strategic planning will be vital to the future of accounting. At a compliance level, firms should be investigating outsourcing basic tasks to focus on their new growth direction. Find out how one accounting firm increased revenue streams and their profitability by outsourcing bookkeeping and administrative tasks to the Philippines.