With a year like 2020 behind us, it’s hard to predict what 2021 will look like. But you can expect these top accounting trends.
Key takeaways
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Cloud-based accounting solutions
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Remote work environments
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Automation
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Accounting software
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Dependence on data
Businesses in all industries experienced major changes in 2020 as the COVID-19 pandemic caused record closures, unemployment claims, and an overwhelming transition to remote work. The accounting industry also experienced significant changes, like dependence on remote client meetings and new office environments.
But the pandemic aside, each year always brings new technologies and trends. What will 2021 mean for accounting? From remote working to AI and data, a lot is on the horizon for tax and finance.
Here are the top five accounting trends you can expect to see in the new year.
1. Cloud-based accounting solutions
Companies worldwide are taking advantage of cloud computing and all its benefits. One estimate shows that using the cloud can reduce IT labor costs by up to 50% and that it improves capital utilization by 75%. It’s also estimated that 94% of managers are now using cloud services or expect to do so in the next three to five years.
The accounting industry is also making the shift, especially as offices are going remote. Cloud-based solutions can bring cost savings to small and medium-sized businesses. Leaders can choose their usage level or storage and scale in the future as the business grows.
The cloud allows teams to collaborate remotely on business initiatives without the need for on-site storage solutions or systems. Documents and data are accessible from anywhere there is an internet connection.
2. Remote work environments
At the height of the pandemic lockdowns last year, over half of the American workforce worked remotely. As people returned to the office, a third of workers were still operating out of remote locations, with 25% working remotely a few days a week. Two-thirds of remote workers say they want to continue the setup and aren’t ready to go back to the office.
Accounting firms and small business owners have also gone remote, operating out of home or remote offices. This trend is likely to continue into most of 2021 and maybe even beyond. Research has shown that remote work could increase productivity by 2.4%, one motivating factor. A Pew survey revealed that 54% of workers whose jobs can be done from home would want to continue working remotely even after the pandemic ends.
Remote work may be here to stay, and businesses will need to shift their practices and be there for customers in new ways, including video conferencing and other telecommunication methods.
3. Automation
Automation is being embraced by many industries and businesses. Using AI and machine learning to take on everyday tasks helps companies streamline processes and improve efficiency. In accounting, using automation tools can improve things like:
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Forecast model accuracy
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Response times
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Tax return completion
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Decision-making based on data
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Data security
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Appointment reminders and scheduling
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And more
No matter the business or firm’s size, using automation makes tedious tasks much more manageable.
4. Accounting software
Another trend that’s not going anywhere this year is the shift to accounting software that takes on various bookkeeping tasks. One common example is QuickBooks from Intuit, a platform that helps small and medium-sized businesses with cash flow management, bill payment, payroll, invoicing, and more.
These platforms integrate features already discussed, like automation and cloud computing, to help businesses and individuals manage their finances and prepare for tax season. Needless to say, 2021 is going to be heavily dependent on web-based solutions that are more accessible and simpler.
5. Dependence on data
The world is now driven by big data. Businesses can take advantage of data to better prepare for their financial future and improve their marketing strategies. Here are a few ways data is changing accounting and bookkeeping:
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Evaluating key performance indicators (KPIs) for the business
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Improving out-of-date accounting systems
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Identifying teams or employees that need more training or guidance
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Measuring customer satisfaction and retention
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Defining goals for future business growth based on quarterly and annual information
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Targeting the right audiences to generate more leads
Data analytics is a must for the modern business to stay relevant and competitive, and the dependence on data will only continue to increase in 2021.
Accounting questions? Franco Blueprint has answers
Remember these five accounting trends as we begin 2021 so you can always stay prepared for what’s coming.
Whatever the new year brings for the accounting industry, Franco Blueprint is here to help along the way. Attend our trainings and workshops or learn how our Blueprint4success financial accounting model helps businesses improve systems and accelerate profits. We work with a range of organizations, from contractors to small businesses to startups to brokers.
Get in touch today to schedule a free consultation.