5 Accounting Trends to Look Out For

Accounting is more than simply maintaining a record of debit and credit. It is a vital part of the overall business and, by extension, all things financial. The fundamentals of accounting remain the same. What has changed in the last few decades is the technological advancements and the latest trends adopted by the finance team.

New opportunities arise on a regular basis, giving businesses the potential to expand. Moreover, technological advancements have resulted in a range of opportunities for finance professionals to adapt and improve their day-to-day processes.

Here are the top 5 accounting trends to look out for

1) Incorporating cloud-based and AI accounting applications

According to Accenture, in the next few years, 80% of accounting and finance processes will be automated. Cloud computing platforms and AI applications are becoming more common in accounting and finance areas. The combination of AI and cloud-based software makes the future of accounting bright and profitable.

Shifting to the cloud makes it easy to provide clients with real-time access to their account data. AI-enabled cloud finance enables the finance team to get valuable insights into critical company data, allowing them to take strategic decisions in less time. Inputting and processing large amounts of data and financial information, which earlier would have taken days or weeks, can now be automated to save time.

Entry-level accounting tasks, such as data entry and daily computation can also be performed in lesser time, with cloud computing software. By employing cloud computing solutions, the finance team will be liberated from lower-level, time-consuming activities, such as data entry and simple computation. So, migrating to the cloud will not only save you time but also has countless benefits. 

2) Implementation of big data and analytics

Financial data analytics has become crucial in every aspect of the function. According to a poll conducted by the IMA, 67% of finance firms have either implemented or plan to implement Big Data.

Data analytics helps organizations gain useful insights into their financial assets, discover business procedures to boost corporate efficiency and aid in better business management. Analyzing the huge amounts of data in your business helps acquire substantial insights, forecast future events, and automate non-routine financial activities.

Overall, Big Data enhances the customer experience and enables businesses to deliver more comprehensive services. As compared to previous data sets, reporting becomes agile and accurate with the usage of Big Data. Incorporating data analytics in accounting has numerous benefits and has enhanced the overall process.

3) Outsourcing of accounting

Nobody understands the difficulties of managing a company’s finances better than the finance team itself. However, the entire process can sometimes get both time-consuming and pose the risk for errors. It is advisable for businesses to seek assistance from outsourced accounting services. According to a recent KPMG poll, over 40% of businesses are expected to increase their usage of outsourced accounting.

Outsourcing is becoming an increasingly significant technique for companies to provide efficient services to their clients while adding value to their organization. Outsourced accounting services include expert bookkeeping and accounting to customized management reporting and controller services.

4) Adopting Blockchain

Blockchain is regarded as a potential game-changer for the finance sector. It helps the finance team get clarity into available resources and liabilities while focusing on planning and valuation.

Companies can use blockchain to write transactions directly into a joint register, forming an interlocking system of lasting accounting records. The earlier process of maintaining separate records based on transaction receipts is now simplified with this technology. All the entries are shared and cryptographically sealed, which makes it impossible to alter or destroy the data.

Blockchain is capable of securely documenting and preserving digital assets, and easily track financial inflows and outflows. It is considered to be a technology that is ideal for growing finance needs.

Source: Thomson Reuters ClearDocs

5) Prioritizing Data Security

It is noted that within six months of becoming the victim of a data breach or cyber attack, around 60% of small businesses collapse. It is therefore critical for companies of all sizes to detect, report, and fix any suspicious network activity.

One of the major advantages of data protection is that it protects important information, which is a key asset to the business. Installing security into the software ahead of time saves development and support time. That apart, implementing security helps avoid unintentional data loss. Moreover, hackers will find it difficult to gain access to sensitive information, if it is protected.

The only way to battle and avoid cyber threats is to safeguard data from the moment it is produced. Cyberattack threats are real and on the rise for many companies. Fortunately, there are actions that can be taken to minimize risk and secure sensitive data.

Conclusion

Technology has a major impact on the finance sector. And, it is reasonable to expect that it will rise as the driving force for growth in the next few decades. Therefore, keeping up with finance trends will benefit you and your company. Learn how you can reduce DSO and bad debt with an AI-based Integrated Receivables Platform.