What’s Next For The Industry? Here Are 7 Accounting Trends For 2018
Let’s take a look at seven accounting trends for this year.
Rise Of The Gig Economy
“Gigging” has been on the rise for several years now. In a survey conducted by Adobe, one-third of a thousand office workers in the United States was found to have a second job while more than half (56%) foresaw that they will have multiple jobs in the future.
In the same survey, 81% of traditional workers expressed willingness to do additional work outside their primary job if available.
The gig economy is seen to be impacted mainly by millennials. Consequently, its rise will also bolster automation and artificial intelligence. Furthermore, it will have a significant impact on HR.
Hiring talents will have lower costs and increase competition for talent. This will also pave the way for the evolution of traditional workers’ career paths. Instead of focusing on career development, workers are going to put more attention on temporary jobs that are focused on skill development.
Because of the prevalence of virtual reality, in-office and remote workers will connect like never before. This should positively impact collaboration of teams situated in different parts of the globe.
Organisations are also expected to help make gigging more agile and responsive to the market. The rise of the gig economy paves the way for creation of new job descriptions since, previously, freelancing is only for creatives while contracting is for IT-related jobs.
Changes In The Global Tax Systems
Australia transitioned to a digital tax system years ago but the rest of the world took a long time to catch up. The United Kingdom is slated to make the move in 2018 (or 2019) while the United States is getting ready for changes in their tax systems. These will affect estate tax, retirement savings and personal exemptions, among others.
Such changes will trigger a shift in the way in which accountants do business. Accountants need to stay abreast with updates and educate themselves on new legislations. Doing so will put clients at ease with the fact that their financial advisors know what they’re doing; that they can offer more value.
Artificial intelligence will play an important role in the accounting industry in 2018. It is believed to dramatically alter the profession and the skill set required to become successful. Artificial intelligence will help accountants become more strategic advisors.
The convenience offered by technology will make making financial decisions easier because accountants can now sift through tons of data quickly and accurately. As a result, financial advisors can make better recommendations to their clients.
Artificial intelligence should improve compliance work and free up time so accountants can focus more on revenue-generating, client-facing tasks.
- Here are our suggestions for the top automation tools for accountants.
- Should your firm fear automation? Here’s why we think you shouldn’t.
DIY Software WIll Be Easier To Use
Many small business owners said that accounting tasks are their least favourite part of running a business. The thing is, one mistake can be costly. And since accounting can be very tedious and time-consuming, it can lead to missed opportunities.
Thanks to technology, a number of accounting tasks can now be automated. These tools, mostly do-it-yourself solutions, make an accountant’s job easier.
Such tools allow accountants to deviate from being bogged down by compliance work and, instead, develop their customer-facing advisory skills.
In 2017, accounting products and updates have bolstered the accounting industry. This year, according to trends, chatbots, for example, are going to go mainstream. Chatbots can streamline processes by sorting all information into specific categories single-handedly. These can identify (and learn from) initial decisions made by accountants then use those patterns to automatically perform tasks all by themselves.
Intuit, for example, released Quickbooks Assistant last year. It is essentially a virtual accountant for small-medium-enterprises. Such tools empower clients, allowing them to have more control of their business.
What does this mean for accountants?
This puts accountants in a position where they need to redefine their roles to accommodate the benefits of technology while still asserting their expertise and vital role as strategic advisors.
With an in-depth knowledge of the financial climate and essential accounting tools, accountants can offer crucial advice. Accountants can play an active role in their clients’ success.
- Improve firm efficiency with accounting technology. Learn more about it here.
- Need help automating data collection? Read more about it here.
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Importance Of Data Security
Data security must be a priority for accountants because the are constantly targets of security breach. And because of the incidents that involve security attacks last year, data security will definitely take centre stage in 2018.
We’ve previously talked about ways on how to remaining in business by improving client experience and part of offering a good client experience is giving them peace of mind, which is a result of them feeling assured that their financial information is safe. Accountants need to invest in trusted security software because that can become a key differentiator for current and potential clients.
Here are some tips on minimising data hacks:
- Have a dedicated computer for business purposes. This eliminates the risk of getting infected by malware from untrusted websites. Random surfing and accessing certain web pages can make you susceptible to data hacks, and these usually happen when you’re doing non-work related tasks. Once you have a computer used solely for business, do not let anyone use that for social media or any other activities not related to your clients.
- Do not open emails from untrusted sources. Phishing emails contain clickable links that can infect your computer with malware. Never click links from emails that have nothing to do with your work.
- Always check your bank balance for unauthorised transactions. Make it a point to reconcile bank balances on a regular basis and review the transactions clearing your bank.
- Update operating systems, software and programs you are using. Outdated programs are prone to data hacks because they may lack the latest security features essential in keeping your data secure. Make sure everything is up to date, from antivirus to browsers to third party programs like Java, QuickTime, Flash, etc. Use tools that can scan your computer and offer updates.
- Be careful when connecting to wireless access points. Do not connect to wifi sources when in public places, like the airport, because they are not guaranteed secure and can make you susceptible to attacks.
Rise Of Millennial Clients
In 2018, more millennial clients are expected to arrive because many of them will become tax-paying adults. The rise of millennial clients means that they are going to expect more. More transparency, more proactiveness, etc.
Accountants that still use old management systems will experience difficulties obtaining and keeping millennial clients. This new roster of clients will want a more personalised approach, which is not possible if you’re still in the age of the dinosaur. Younger clients expect accountants to really guide them in their finances.
Similarly, they expect their accountants to be paperless, which means they need to be on the cloud. They also expect prompt responses to any concern and question they might have. This is possible if accountants are on the cloud.
According to data from the 2017 Millennial Business Owner Accounting Firm Survey, which polled more than 1000 business owners, almost one-third of millennial business owners run companies that earn $1.1 million to more than $25 million annually. 16% of those lead companies that make between $501,000 to $1 million a year, while 14% have companies with more than 51 employees. Furthermore, 12% have 21 to 50 employees.
What do these mean? These numbers only show that millennial clients need and can afford accounting services. Accountants need to target this new generation of business owners.
Accounting firms can future-proof their business by targeting this generation of business owners. Compared to other generations, millennials prefer a varied mix of services:
- 54% pay for bookkeeping services
- 24% include accounting technology recommendations and training
- 20% say they need invoicing from accounting firms
Other significant findings from the survey include:
- 52% indicate the need for strategic insight and guidance
- 31% retain CFO/consulting services from accounting firms
- 42% need complex financial concepts translated into a language they can understand
- 44% prefer monthly flat rates while 53% prefer fixed fees per project
- 82% want paperless accounting services
- 56% prefer firms that adapt cloud-based accounting technology
- 33% want digital payment methods
- 25% use mobile device for accounting
In short, accountants need to move beyond tax services and diversify services as well as utilise the proper technology to gain competitive edge.
Changes In Client Services
Technology, relationships and innovative solutions make up for a positive client experience. In 2018, accountants are expected to optimise their processes to meet the following expectations:
- Use of digital portals to easily communicate with accountants and easily access information using a mobile device
- Timely responses to enquiries
- Adoption of current technological trends
- Better relations with clients
- Innovative solutions to complex problems
Change is inevitable in the accounting profession. To experience growth, accountants need to understand the trends and take proper steps for better compliance and decision-making. Accountants who can adapt with these changes are the ones better suited to experience success in 2018.
If you are an accountant, bookkeeper or finance firm looking for solutions to capacity restraints, call our offshoring specialists at 1300 896 522 or click here to download our blueprint on how to build a global accounting team.