Sweeping disruption of the accounting industry is imminent. Massive technological change and shifting consumer trends demand a new approach to how the industry creates value for clients. Some services are more vulnerable to disruption than others. For example, basic transactional accounting services have already been largely automated (though adoption has varied significantly across types of small businesses). Compliance will be increasingly automated going forward, and limited advisory services will follow that trend.
Automated processes can provide the bulk of services with oversight, while accounting professionals will focus on offering expert advice and insight, strengthening customer relationships in the process. Here are five trends influencing the future of accounting.
Big Data and IoT
New technologies based on big data, business intelligence, analytics and the Internet of things (IoT) are reaching into every area of business life. An oft quoted statistic, although not entirely provable, says that nine-tenths of data available today was created in the past 24 months. This "big data" gives business leaders unprecedented amounts of information and the analytical tools for improved decision-making.
In turn, financial advisors and accounting professionals will use the same tools to move from data entry, recordkeeping and simple analysis to strategic business consultancy. The days of Microsoft Excel as the primary analytics program are fast coming to a close. Today, financial controllers and CFOs use structured data, unstructured data, and predictive analytics to access massive banks of customer information, financial trends and industry information to make insightful forecasts for clients.
About 68 percent of American adults owned a smartphone in 2015. Despite the ubiquity of mobile devices, their vast number and the wide variety of platforms remain a challenge. Accounting services providers must evaluate which mobile devices their clients typically use, and offer high-quality apps on those platforms. As businesses and consumers increasingly use mobile devices to access their data and the Internet, accounting services are changing to meet the demand. For instance, busy small-business operators want to maintain bookkeeping on the go: recording expenses, managing accounts and tracking financial data.
Accounting software vendors are responding to this shift by creating online portals and apps that are specifically built for mobile devices. They offer military-level security encryption, messaging systems, and other value-added features. Accounting services will engage with clients and offer them updates and advice in the form of bite-sized chunks of information suitable for small mobile screens. The goal is to help them stay on top of their business on-the-go.
As broadband and high-speed Internet continues to permeate household and business locations, the ability for bookkeepers, controllers and CPAs to have high-speed, two-way conversations with clients via video streaming becomes more realistic. TV and broadband services will continue to converge. Although there are current services like Skype that offer face-to-face interaction, they are nothing like the picture-perfect, high-definition transmissions available in the near future. This trend will help accelerate the internationalization of the industry — bookkeeping services companies will be able to service clients around the globe as well as around the corner, potentially in the same meeting.
These changes are forcing the accounting industry to estimate what value they can add to their customers’ accounting processes. A positive prediction is that machines and robotic automation will enhance the value of services, not detract from it. Basic services can be delivered more efficiently, allowing accountants to have more time to discuss their clients’ current situation and future needs.
The Future Is Now
Perhaps the most dramatic example of fast-moving changes in the accounting industry is the massive shift to data entry automation for bookkeeping and accounting. Prior to the rise of data entry automation only a few years ago, a Paystream Advisors report revealed that 84 percent of invoices began the processing cycles as a fax, paper document or email attachment. These had to be converted into enterprise resource planning system (ERP) formats. In contrast, modern automation software cuts costs, increases efficiency and handles more processing volume with less error.
Customization and Personalization
Consumers are used to buying goods and services customized to their liking. You only need to watch each customer at a Starbucks counter rattle off their favorite drink order with exacting detail to see this in action. Business owners and managers want the same ability to personalize their buying experience from their service providers. The key is to offer clients a standardized menu of products and services, while having the ability to customize the process for individual clients. This is done by taking advantage of workflow technology and incorporating software to build scale and create efficient service delivery. Accounting services and advisors can build value on that solid base by offering deeper insight, more detailed analysis and a closer working relationship than would otherwise be possible without the support of innovative technology.
Services of the Future
In many ways, the future is now. Automatic services have become commonplace in many sectors of the financial services industry. Likewise, consumer automated tax preparation apps are heavily promoted during tax season. Yet the accounting services firm of the future has yet to completely emerge. Some experts predict a hybrid approach where advanced technology will sit comfortably with human advisors to offer clients the best of both worlds — unparalleled data analysis combined with the human touch.
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