The future of financial accounting
Despite the grim toll that COVID-19 has taken on almost all sectors of business, the market for accounting services in Australia, whether that’s small business accounting or wider financial accounting, will recover as the post-COVID normality begins to emerge through 2021.
According to the CommBank Accounting Market Pulse, published in June 2020, accounting firms in Australia played a huge part in helping the wider business community cope with the measures that were introduced to keep the pandemic under control. As federal and state governments launched a range of assistance packages, accounting firms came to play a key role in making the help that was on offer as accessible as possible. This meant offering practical support in the form of guidance through the often complex eligibility criteria and application processes for the various relief funds.
In the shorter to medium term, it’s predicted that accountancy services will concentrate on areas such as recovery and insolvency, as well as offering general business advice to clients coming to terms with the new landscape. In addition, the enforced working restrictions resulting from the pandemic accelerated the process of digital transformation within the accountancy sector – this trend is tipped to completely transform the delivery of accounting services in the future. Among the trends set to play a role in that transformation are the following.
The first moves toward automation have already taken place within the accountancy industry, with time and work-intensive activities such as auditing, banking, payroll systems and general tax preparation being switched to automated platforms. Companies such as Xero provide machine learning and AI software that automate processes such as data entry and reconciliation.
According to the CPA Journal, robotic process automation (RPA) can cut the time spent on tasks such as processing audits and contracts from months to weeks. Clearly this will mark a major selling point for those accountancy firms able to offer automated services, but it will also mark a shift in the skills needed to be truly successful.
With automated processes doing much of the “heavy lifting” of accountancy, the companies best placed to succeed will be those that blend this technological prowess with the kind of analytical and managerial insights that only come through a blend of expertise and experience.
Using the cloud
For accountancy services, cloud computing offers the chance to instantly access resources such as data. A cloud-based system means accountants and their clients can make decisions based on the latest data as it is updated in real time. To remain truly competitive, accountants will have to learn how to make the best possible use of the data freely available through cloud computing, as well as developing the ability to cut through the sheer volume of data that can be accessed in order to hone in on the information that is genuinely useful.
The global market for accounting software is tipped to be worth as much as $11.8 billion by 2026, and much of that will take the form of Software as a Service (SaaS) applications. Accountancy companies that delay using cloud-based tools of this kind will quickly find themselves left behind by the competition, as cloud-based accounting becomes the minimum clients expect.
Using data and time
Recognising the weight of data offered by cloud computing and the time saved by automation is one thing, but the accountancy services of the future will depend upon making the best possible use of the extra time and data. Rather than simply completing tasks for a client, the best accountancy firms will be able to identify areas of greatest need and most opportunity, and use the insights gathered to create added value in the form of actionable advice.
To summarise, the services offered by accountants post COVID-19 will leverage technological advances to shift the sector on from simply delivering services with fixed parameters to working in a much more strategic and holistic manner.
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