What are the future trends in accounting? We are at a fascinating milestone in the evolution of accounting technology and its impact on business. Many working professionals can still remember when technology was burgeoning. From the perspective of accountancy, paper ledgers gave way to spreadsheet applications. CPAs and accounting professionals passed files back and forth from shared drives or emailed them to peers and clients. Then those spreadsheets got more advanced. Professionals shared them in content management systems or stored them in the cloud so that multiple people could work simultaneously. Now, applications are becoming transformative in their ability to draw conclusions and anticipate trends.
The rush of technology advances will certainly impact the industry. Thinking about all of the different ways that technology could impact any industry is as dizzying as it is speculative. Accounting professionals haven’t fully anticipated the ways that conditions and processes will change to allow for new things. So how can a CPA firm or accounting professional prepare for a future where technology presents an unknown?
“You can’t run an accounting firm in 2017 like you did in 1980 but it amazes me how many people try,” said Bill Carlino, Managing Director – Consulting Services for Transition Advisors, LLC. Recently, meeting with a managing partner of a CPA firm that didn’t have a computer in his office surprised Carlino. “Historically, the accounting industry has not been the fastest to adopt change but there have been seminal technology events that have really advanced the pace of change – and the industry is now changing faster.”
Broad technology trends like cloud computing, big data, cybersecurity, wearable technology, and driverless cars are impacting all businesses. But what future trends in accounting will impact CPA firms and accounting professionals?
All businesses are going to have to be more receptive to remote work. It’s well-documented and understood that workers today want flexibility in where and how they work. CPA firms and accounting professionals need to have the systems and policies in place to allow for this. Flexibility and the ability to work from anywhere are key needs for today’s and tomorrow’s accounting teams.
Decentralized work and virtual offices will be increasingly common. That means, workflow management systems will take on a more critical role. These applications will be increasingly important in giving company leaders a view into the status of projects and client engagements.
And, as more and more data goes to the cloud, we will see a merging of sales data, customer interaction information, financial reports, and contract information. Data analysis applications will become more central to the accounting cloud, and this data will need to be accessible from anywhere.
The technology view beyond the next two to three years gets hazier. Artificial Intelligence has been seeping into applications and software platforms at an increasingly steady pace. AI will impact the industry. As systems’ decision-making abilities improve, it’s interesting to think about a computer’s potential role in evaluating financial and accounting records as part of taxation and valuation.
Probably slightly beyond AI, blockchain technology holds great promise in the accounting profession. A record that is self-auditing and immutable can mean huge changes for not just how much time and effort it takes to verify company financials but drastic reductions to the difficulty and complexity of audits.
Fear not, there are initial actions that CPA firms can take to prepare for what’s coming. “The first thing to do is get complete partner buy-in,” said Carlino. “Everyone has to be onboard with embracing technology and preparing for the future.” He added that if a CPA firm or accounting practice has a state-of-the-art technology platform, 4-7% of top-line revenue should still be invested in IT. He anticipates some firms going up to 10% as new technology emerges.
Cloud hosting your accounting system can be a critical first step in preparing for the future. Provide more security for client data, allow for anytime, anywhere access to business-critical data and applications, and eliminate the need to focus on specialized IT infrastructure on your own.
“If you are a couple of steps behind,” said Carlino, “see what your competitors are doing.” He also recommended attending accounting technology-centric conferences as well as reading more accounting technology-focused publications.
Having a great technology stack isn’t going to be of much help if a firm isn’t in a position to use it. Strengthen any skills that will support the applications and systems of tomorrow. Knowledge of data analysis and data modeling will be a key part of standard client support going forward. Awareness of best-practice in IT security will also be critical to protecting customer data as the sophistication and frequency of data intrusions rises.
Some industry experts think the right preparation starts with a shift in mindset and not necessarily a change in tools. Salim Omar, Chief Executive Officer of Straight Talk CPAs, councils his clients to think like CEOs, and not technicians. “Practice owners need to delegate. For so many years, they’ve done technical work and gotten satisfaction from it,” said Omar. “They think, ‘I produced this, I got paid’ and then they go on to the next thing.”
Omar stresses that it’s the intangible things like client nurturing and strategic advice to clients that will position a firm for the future. “Utilize technology for better solutions to get the commodity stuff done,” he said. Only then can accounting professionals get meaningful time to play the role of trusted adviser.
This post is the first in a series where we’ll explore future trends in accounting. Read the next post here.
Salim Omar knows the keys to success for any CPA firm. He’s used his financial expertise and his own struggles as a springboard for understanding the success principles that create accounting firms that are profitable, respected and fun for their employees.
Visit Salim’s website here:
Bill Carlino is Managing Director of National Consulting Services at Transition Advisors. Previously, he served for nearly 12 years as editor-in-chief and editorial director of Accounting Today and AccountingToday.com, where he was responsible for all content both in print and online. Bill Carlino has been a frequent industry speaker, presenter and panel moderator. He has appeared as an expert commentator on CNBC, Reuters, Bloomberg, CNN as well as National Public Radio.
He authors a blog here.
Visit the Transition Advisors website here:
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