Four Trends Affecting The Accounting Industry In 2019
The accounting industry has seen a dramatic shift towards the integration of technology and the automation of many processes. Some of these trends are positive overall for both the consumer and firms, but with automation and other technologies making many responsibilities obsolete, the question many accounting firms are asking is what the future for the accounting industry is. Below are the top four trends that are affecting the accounting industry in 2019.
Automation is a hot topic in bookkeeping, as bookkeeping is an industry particularly at risk of losing jobs through automation of the entire sector. Accounting firms and bookkeepers need to consider these developments and how to utilise and take advantage of them rather becoming victims of automated technology. Innovative new software exists, such as an automated tax service for consumers and cloud-computing software that consumers and firms alike can take advantage of.
Open banking is an initiative launched in the EU that has now spread globally. It is a directive aimed to make banking data more readily available for reputable and established organisations to analyse. What this means is that information is more easily processed and made available for people to analyse. Accounting firms can view bank records, income statements and cash-flow statements all at the same time, streamlining processes considerably. This can cut down waiting times for having access to financial information from weeks to minutes.
For a business to operate properly, it is important to have readily available cash in the bank. This is why cash-flow statements are so important for long-term planning of company finances. Failing to acquire accurate company cash-flow reports can result in terrible long-term planning and serious financial difficulties. This problem hits right at home for smaller businesses, who may have less cash and resources available to them. Accounting firms have begun to specialise in cash-flow consulting, developing innovative and easy to use fintech technologies. Now companies have access to things such as automated lending, funding options, and other great solutions to cash-flow planning.
Blockchain Technology & Cryptocurrency
Blockchain technology is seeing rising popularity across many different industries, and bookkeeping is no exception. Blockchain technology works by recording a growing list of records, known as blocks, which contains data about the previous block. This provides readers of said blockchain the overall historic data of transactions. Blockchain helps bookkeeping firms by improving the efficiency of operations and providing clarity in data.
Often associated with the blockchain is cryptocurrency, which is a new form of digital banking and currency. Accounting firms will have to soon accommodate this growing trend and will have to adapt accounting models to triple-entry accounting rather than double-entry accounting, as cryptocurrency transactions involve three parties, rather than two.