7 Accounting Trends to Watch in 2020
In the blink of an eye, we said goodbye to one decade and entered the next. While 2020 may not feel any different than 2019, there are plenty of new practices and trends that will be making their way into the accounting industry. For accounting firms that want to stay ahead, it’s important to know what trends lie in store for 2020 – essentially, now. When you know the trends, you know what to expect from the competition and what to expect from yourself if you want to stay at the top of your game.
Here are the top 7 accounting trends for 2020:
Some accounting firms have already gotten on the AI bandwagon, and 2020 promises to see more. AI can quickly gather and analyze massive volumes of data and automate tedious processes, thereby providing a new level of efficiency for accountants. At the same time, the use of AI will change the way accountants work. With so much data available and various processes automated, accountants will find themselves with more supervisor/auditor responsibilities than ever before.
2020 will see smaller to mid-size firms adopt cloud-based data services. These services will allow firms to offer more data and infrastructure for less money, a win-win for clients and accountants alike. Plus, the cloud allows for more collaboration and sharing of real-time information.
Outsourcing accounting functions
Accounting outsourcing firms are becoming increasingly popular since they allow companies to focus their limited resources on their primary operations and development. Companies that outsource accounting and CFO responsibilities can also save on employment costs like training, taxes, benefits, and more. Additionally, outsourcing reduces the chance of internal fraud. Accounting firms that want to get a piece of the outsourcing pie would do well to create a service that reflects the needs of their corporate clients.
Big Data & analytics
Accountants are already using technology and solutions that make record keeping and data storage easy and available. But in 2020, clients are expected to demand greater value from that data. This includes actionable insights, better risk management, and predictive analysis. While most accountants have always offered analytics at some level, the demand will now be stronger and more results oriented.
Accounting firms themselves will use big data behind the scenes to gain actionable insights regarding clients, leads, target audiences, and more. Toward this end, accounting firms will be seeking to hire accountants who have expertise in analytics and data science.
Cryptocurrencies are here, and they are not going anywhere. Blockchain technology has already affected the accounting industry by lowering the costs of maintaining and reconciling ledgers and by providing ownership accuracy and history of assets. According to Statista, worldwide spending on blockchain solutions is expected to grow from $1.5 billion in 2018 to $11.7 billion in 2022. Accounting firms that can get a handle on blockchain technology will have an edge over those that don’t.
With AI and big data making their way into the accounting industry, experts are predicting that clients will demand a more hybrid approach from their accountants. An approach that combines accounting technology and financial advising. Accounting firms will be able to meet this demand if they use automated processes and big data analytics. This will free up accountants from tedious tasks and allow them to focus on offering high-quality advisory services.
Any accounting firm that has not yet realized the power of social media will need to get on board in 2020. Social media can create brand awareness, generate leads, increase sales, and drive website traffic. In short, it’s a powerful tool, and one that accounting firms cannot afford to ignore. Like accounting and CFO services, social media management is something that can be easily and affordably outsourced so that the primary team of accountants can focus on what they do best.
2020 is all about technology
Nearly all the accounting trends for 2020 have to do with major technological advancements, and small to mid-size firms will probably not be able to incorporate them all, certainly not all at once. AI, big data, blockchain, and more; these are big ideas and using them can make a huge difference in your accounting firm. Since the ramifications of implementing any of these options are large, it’s a good idea for accounting firms to tackle them one at a time. If your firm can hone its expertise in one specific area, it will already have an advantage over the competition. You can then decide which trend is next on your list.