The accounting landscape is continually evolving and it’s imperative that small business owners are always staying up to date on emerging trends and resources to maximize their financial decision-making capabilities. Innovations in technology have given way to digital accounting tools that allow growing organizations to more efficiently manage transactions, meet customer demands, and boost employee productivity.
The Coronavirus pandemic has caused substantial shifts in how companies operate, and what accounting professionals are looking for in their employers. In this article, we’ve combed through surveys and reports to compile the top variations that accounting professionals and business leaders should take note of as we move into 2021.
1. The COVID-19 pandemic created a shift in what accountants look for when applying for work
A 2020 report conducted by Accounting Today titled, “Voices 2020’s Impact on the Hiring Market for Accountants,” found that prior to the pandemic, accounting and finance professionals actively searched for better job opportunities – citing that their primary goals for doing so were to receive higher compensation and the chance to learn and utilize new software.
Once the pandemic hit and many companies experienced lay-offs, these goals shifted. People became worried about holding on to the jobs they currently had, as opposed to focusing on what better opportunities might be elsewhere. As this new normal continues to really set in, professionals have resumed looking for new opportunities but their priorities have changed. “Workplace flexibility and a robust communications plan now matter most. Employees are also paying close attention to how companies respond to the coronavirus pandemic as a business and an employer.”
2. Redefined roles of accountants
In September of 2020, Sage Advice conducted “The Practice of Now 2020: The Essential Report for Accountants,” in which 1,000 U.S. accounting and finance professionals took part. The report noted recruitment to be a big theme, and showed that 54% of respondents believe that an ideal candidate for an accounting role should have financial advisory skills. It also revealed that 51% of respondents believe that skills in using technological tools will make the most impact in an accounting position.
Moreover, organizations are starting to think of adding financial advice services and diversifying their offers to go beyond the typical bookkeeping and auditing. The rise of cryptocurrencies has also required accountants to learn how to deal with the rising digital currency.
3. Company owners put a higher importance on filling roles for financial accounting, budgeting, and data analytics amid the pandemic
Hays, the international recruitment firm, recently conducted a survey of more than 1,100 of its employers. It revealed that 40% of its respondents were prioritizing the recruitment of professionals who can perform financial accounting, budgeting and data analytics. Additionally, 47% of employers said that cash collection is a key area in their business.
The survey also revealed that respondents were de-prioritizing the hiring of commercial analysts and people in leadership roles to give way for more in-demand positions, and that 19% of employers are currently on a recruitment freeze.
4. Taking advantage of robust accounting solutions will pave the way to maintaining employee productivity amid COVID-19 outbreak
Stanford economist Nicholas Bloom said in a report that the global remote work movement during the COVID-19 pandemic has the potential to create a “productivity disaster” for firms and threaten the global economic progress. Bloom, who is widely known for his research showing the benefits of working from home, actually fears that the collapse in office face time due to the pandemic will lead to a slump in innovation.
In a study conducted by Arizent, which is the parent company to Accounting Today, two-thirds of the accounting firm leaders who were surveyed reported a drop in their employees’ productivity amid the pandemic. Meanwhile, the Accounting Today “Voices 2020’s Impact on the Hiring Market for Accountants” survey shows that accounting firms utilized cutting-edge technology to minimize the time allotted for repetitive tasks, noting that 43% of respondents said this integration of technology improved their overall productivity.
5. Clients of accounting firms will demand flexibility in service offerings
Sage Advice’s “The Practice of Now 2020: The Essential Report for Accountants” study reported that 86% of its surveyed accountants believe that clients are demanding greater flexibility in terms of the services they want to avail from firms. Clients want to have the power to choose the accounting services that are within their budget. The study, which involved more than 1,000 accountants and finance experts, revealed that 78% of the respondents are already confident in meeting this customer demand.
6. There are five actions that accounting firms need to practice to provide the right value for their clients, even post-pandemic.
In September of 2020, Bill.com, in partnership with CPA.com and Hinge Research Institute, released a survey titled, “Where Opportunity Meets Value: Business Model Trends for Accounting Advisory Services,” which compiled insights from over 650 accountants and business professionals. The study examined how firms can expand their offerings to gain the trust of their clients amid the COVID-19 outbreak which has sent organizations into a state of uncertainty.
The study revealed the following key points for these professionals to consider in order to provide the best services to their clients:
Identify the client’s most pressing challenges
When the survey first ran in late 2019, the following results were gathered: 19% of customers needed help with growth and expansion and getting expert financial insights; 18% of customers have problems with controlling cash flow and minimizing overhead expenses; and 17% of customers had challenges with tax compliance and time and focus on financial matters.
Know the client’s priorities
Accounts payable and receivable, forensic accounting, data analytics, and technology are the primary demands clients have of their accounting firms, according to the survey.
Focus on proactive, strategic advisory services
Clients see great value in advisory services, and the survey found that they are willing to pay 50% more when the accounting services they get are bundled with strategic advisory and consulting services. The most valuable strategic advisory services clients demand are: revenue growth and business modeling, budgeting, tax planning, risk management, and advanced KPI reporting, in that order.
Institute value pricing
Value pricing means being transparent with clients about the value of the services they pay for. Respondents indicated that value pricing increases transparency between the client and the firm (64%), demonstrates firm expertise (60%), and prevents lack of billing surprises (59%).
The survey revealed that accounting firms are 3.5 times more likely to be successful when they discuss the benefits of automation to their clients. Twenty seven percent of the firms that already consider themselves automated experience fewer problems compared to less-automated peers.
7. Digital accounting technologies will continue to rise in the next few years
The use of accounting software is expected to rise in the coming years, but there’s an already-growing demand. According to a recent accounting stats report from Fortune Business Insights, the global accounting software market is eyed to reach more than $20 million by 2026.
One of the most awaited trends in accounting is the growth of cloud usage. While there’s an ongoing need to deploy their applications using on-premise solutions, analysts expect that their organizations will recognize the value of running their operations on the cloud.
The global accounting software market share is eyed to generate the highest revenue in the coming years. In particular, the cloud managed service market worldwide is expected to reach $115.6 billion by 2026, with a compound annual growth rate of 11.6% from 2021 to 2026.
On top of that, cloud technology has been proven to make jobs easier, even for accountants. In fact, Sage Advice’s “The Practice of Now 2020: The Essential Report for Accountants” study revealed that 67% of accounting professionals noted that cloud technology has been helpful in enhancing the quality of their work. Fifty three percent of the respondents highlighted that they used cloud-based tools particularly for project management and client communication.
8. Automation, artificial intelligence, and data analytics still play crucial roles in optimizing the job of an accountant
Automation has been a buzzword for decades, automating repetitive tasks to help professionals focus on more important responsibilities. In the same Sage Advice Practice of Now 2020 study, 40% of finance and accounting professionals said that their organization is already planning to invest in predictive analytics capabilities in the next 12 months.
There are many benefits to using automation in the accounting department. MineralTree, an accounts payable automation and payment automation platform, points out that companies investing in accounts payable automation solutions can save up to 64 hours each month. The Sage Advice study revealed that 54% of its 3,000 respondents felt that technology contributed to the increase of speed in its service offerings; 43% stated that this digitalization allowed them to give better client service.
There is some fear of automation replacing accountants, and Accounting Today has said that technology poses the threat of taking away the jobs of 94% of accountants and auditors.
Research firm Gartner debunked this fear, however, releasing a study which stated that artificial intelligence won’t replace accountants, but will actually create better job opportunities in the future. The firm predicts that two million new jobs related to artificial intelligence will be created by 2025.
Digital acceleration will continue in 2022 and beyond
The global economy has taken a huge blow since the start of the COVID-19 pandemic, affecting millions of lives and businesses. Companies need to prioritize adapting to the new normal –which requires the re-learning of methods and practices and the use of new technology in accounting.
These new trends in accounting serve as eye-openers for business leaders who are being challenged with shifting their mindset from surviving to thriving in the midst of the health crisis. Companies that use available accounting statistics to help predict the way the industry is moving in 2021 and beyond will be better prepared for the future as it pertains to the accounting facet of their businesses.