With the advent of new technologies and innovations around the world, the global economic environment continues to evolve and thrive. Change, therefore, becomes the new constant. As change becomes a necessity for growth, organizations that continue to reshape their business processes and business model need to also be aware of the latest accounting trends. Accounting is an important element of the business process since a well-run accounting function can provide timely, accurate and relevant information for decision making.
The following are some of the emerging accounting trends in 2017/2018:
Cloud-based Accounting Solutions
Cloud-based technology will gain even stronger momentum around the business world in 2017/2018. The concept of using shared resources, including accounting software that runs on the providers’ servers and being able to access financial information in the cloud, has made accounting information more accessible and the process more efficient.
Automation of Accounting Function
Automation in accounting is an accounting trend in 2017/2018 that is fueled by software advancement. Accounting can now be highly automated without the need for significant physical intervention. Latest accounting softwares have enabled organizations to minimize data entry. This will lead to efficient utilization of capital and better management of resources.
For businesses, outsourcing accounting can allow them to focus on their core business and better utilize their resources. Such a trend is not limited to small and medium-sized entities; even big companies are outsourcing their accounting and processing functions to business process outsourcing vendors, commonly known as BPOs.
Another related trend in 2017/2018 is to outsource the entire accounting function to a third-party provider, and they provide end to end support of the accounting function, including a customized accounting software solution and corporate controller-level resources. Outsourcing gives companies access to experienced and qualified accountants and ensures the quality of service that is scalable and consistent.
Integration of Accounting with Operations
With the assistance of accounting software, one of the continuing trends in accounting in 2017/2018 is to integrate accounting function with all parts of the business. This gives better management of transactions and timely recording of entries. For example, the accounting function can be regularly updated in real time by the sales department as sales occur. The integration saves time by automating routine activities.
Transparency and Objectivity
Transparency and objectivity in accounting have never been more important. Accounting governing bodies, such as certified public accountant boards, has placed significant emphasis on this area. In wake of many recent accounting irregularities and scandals, restoring trust and credibility of the accounting profession is essential.
Information is the key to making financial decisions. Advancements in data centers, database techniques, and software, has ushered in the age of big data and mining of data to aid management decisions. Information generated by the accounting has always been a crucial component for business decision-making. Focus on data analysis of the underlying accounting and financial information is becoming one of the key accounting trends in 2017/2018.
Social Media Integration
Social media is becoming more popular these days and with this, accounting professionals can now use social media interaction to communicate with their peers and colleagues to updates on latest business, political, and accounting developments that may impact their work.
Changes in Accounting Standards
Accounting standards are continually being revised and updated to keep up with the times. Many of the standards that were developed before the advent of social media, ad-tech (digital advertising) “shared” economy (shared rides, lodging etc.). These new business models have a significant impact on accounting. Accounting professionals need to keep up with changes that are happening at a much faster pace than before. This trend will continue in 2017/2018 and beyond.
Accounting function generally used to be reactive in nature, e.g., it records and accounts for transactions that are past. This is changing now. Due to many factors, such as evolving business models, regulations, increasing role of accounting in making business decisions, the 2017/2018 trend is for the accounting function to take a more proactive role in understanding the potential implications of any significant business initiative, including tax impact. This allows businesses to run efficiently, without the having to spend significant resources to undo accounting errors or to understand and account for new business initiatives.
With the emergence of cloud computing, and prevalence and acceptability of electronic documentation in place of traditional paper-based vouchers, invoices or receipts, accountants are now increasingly more mobile. Accountants can work remotely and there are currently many team sharing tools to enhance remote collaboration and work.
In an ever-changing business environment, taking note of key accounting trends in 2017/2018 will help enhance business decisions, compliance and success.