What Does the Future of Accountancy Look Like?

future of accountancy

digital transformation

Accounting today isn’t what it used to be. Bookkeeping and tax preparation have become automated or outsourced. And Congress has passed massive tax law changes in recent years. The accounting sector is facing rapid change from evolving technology to pandemic habits that are expected to stick around. For any accounting department or accounting firm to thrive and survive, they need to snuggle up to what the future holds. While some of it will be familiar, some of it will be entering uncharted territory for the future of accountancy.

 

Automation Takes Center Stage

Let’s face it, software, AI, and machine learning are getting a solid foothold in the business world.  It’s only natural that it would reach the accounting universe.

Automating routine tasks like payroll, accounts payable, and fixed asset depreciation journal entries eliminates errors and increases efficiency.

Cloud-based accounting programs and applications are here to stay. The cloud provides instant access to information. Thanks to the internet and smartphones, we’ve become accustomed to receiving immediate answers to our questions.

Since cloud-based systems are accessible at any time, business owners can make real-time financial decisions instead of relying on periodic monthly or quarterly reports.

With the increase in automation, accountants will need to become and remain tech-savvy to survive in a changing industry. It also means that accountants may need to learn new skills. Honing client advisory skills will be necessary since the compliance work of bookkeeping and tax preparation they’ve historically relied on becomes automated.

As automation frees up time previously spent on ordinary tasks, accountants are freed up to focus on higher-level analysis that’s more beneficial to their clients for future of accountancy.

 

Remote Work Is Here To Stay

A recent study by the American Institute of Certified Public Accountants (AICPA) showed that 21% of businesses plan to shrink or eliminate office space in the coming year.

future of accountancy Accounting teams pushed into a remote work environment due to the COVID-19 pandemic will likely remain remote in some shape. Whether that’s a fully remote team or a hybrid model that allows for flexible in-office hours, accountants and employers need to adapt to this new normal.

As accountants adjusted to the new work-from-home environment, their productivity increased. According to a study by PWC, over half of employers noted that the average employee’s productivity improved as the remote work arrangements continued through the end of 2020.

And as more companies and accounting firms for future of accountancy move toward cloud-based systems and away from pencil and paper files, having an office-based workforce is no longer a necessity.

And a remote office opens the talent pool of potential employees. Hiring managers are not limited to candidates who live in the immediate area. With competitive salaries and attractive benefits, companies can hire the best and brightest.

future of accountancy

Source: PWC

Big Data Analysis Picks Up Steam

As accounting technology becomes more robust, accountants will be required to interpret the data for clients or their employers.

This big data revolution will provide business leaders with a depth of information not previously available. But with all the technological improvements, humans are still required to make the data useful.

Humans will need to tell the computer how to organize the data so that leaders can use it to make critical decisions. This means accountants will need to step into roles as advisors. Data analysis skills let accountants tell the story behind the numbers. And that story is key for providing valuable insight for decision-makers.

This storytelling ability will allow business owners and managers to make predictions. This anticipatory response is the value clients will be looking for. For example, using data analysis, managers can answer the question, “If we spend $500,000 on marketing, how will it impact sales?”

Taking data analysis even further, accountants can help clients with more sophisticated questions like “What’s the optimal amount to spend on marketing?”

Using data visualization, accountants can summarize meaningful metrics in easy-to-use ways. Creating graphs, charts, or dashboards can condense large volumes of data into easy-to-digest bites.

 

Relationships With Clients and Team Members Become Less Formal

The pandemic allowed team members to see each other’s personal world. You saw kids, pets, t-shirts, snack habits, living rooms, dining rooms, and bedrooms, offering a casual peek into the person behind the employee.

This informal relationship between team members will continue. And due to the flexibility and informality of the daily work experience due to the pandemic, organizational hierarchies flattened, allowing employees unprecedented access to managers and leaders.

The same informality will extend to client relationships. Clients will continue to want access to partners and managers on a regular basis. Now that everyone has grown accustomed to Zoom video conferencing calls, scheduling office appointments will become less common.

The future of accounting is here. Accept that change is inevitable, and the sooner you embrace it, the better off you will be. And don’t worry, the robots aren’t knocking on the door yet. There’s still time to adapt.

 

About the author:

Mike Whitmire is Co-founder and CEO of FloQast, an accounting close management software company headquartered in Los Angeles. The company works closely with a range of organizations of varying scope and size, helping them to close their books more quickly, efficiently, and accurately.

 

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