Year in Review: Accounting Trends from 2016
Accountants are busy wrapping up year-end tasks and getting ready for the new year.
Demand for accountants is changing, as employers are looking for skills beyond just accounting know-how. They’re looking for soft skills, such as leadership, IT capabilities and the ability to work in non-financial departments. With these enhanced skills come higher salaries. Robert Half projects salaries for financial professionals to rise 3.7 percent in 2017. This change in accountant job descriptions reflects some of the other changes that the accounting profession has seen this year.
Trend: Accounting Continues to Move to the Cloud
In 2016, the accounting profession's slow but steady migration to the cloud continued to press forward. In the summer of 2015, 39 percent of business accounting software users were using cloud-based applications, with QuickBooks® being the most popular software choice, a Capterra survey found. At that time, half of accounting profession leaders supported the idea of adopting paperless payments, and 41 percent planned to implement a cloud-based client payment solution by the end of the year, a Bill.com poll showed.
Cloud adoption continued to grow in 2016, and QuickBooks Online is leading the charge for small businesses. In August, Intuit® reported that QuickBooks Online subscriptions increased by 41 percent during the fiscal year.
Trend: Accounting Software Supports More Integrations
At one time, accounting software stood separate from invoicing, credit card payment processing and payroll. Now — as a result of moving to the cloud — these functions are all rolled in together.
Functions that aren’t native to accounting programs are being integrated through third-party apps. Shoeboxed, for example, scans receipts and converts them into digital format for automated processing through QuickBooks and other popular software.
Trend: Automated Scanning is Replacing Manual Data Entry
The downside of bookkeeping is dealing with entering data from handwritten notes from clients, or piles of receipts stored in shoeboxes and grocery bags. This makes trending away from manual data entry, and toward automated processing of paperwork, all the more exciting.
Today, labor is reduced through optical character recognition (OCR), which can recognize alphanumeric characters from images and digitize them. OCR has been around for decades, but it has grown more sophisticated in recent years. In conjunction with the rise of smartphone cameras, OCR has made it easy for accounting clients to turn physical receipts into digital documents, making the accountant’s job easier.
Trend: Outsourcing is on the Rise
In 2016, outsourcing of financial functions was projected to increase by 27 percent globally, according to Deloitte.
Tax preparation is the most popular candidate for outsourcing, delegated to an outside source by 71 percent of companies, followed by payroll (50 percent), auditing (48 percent), tax planning (30 percent), personal finances (16 percent) and bookkeeping (14 percent).
Accounting firms that are prepared to take advantage of this trend will be poised for growth in 2017.
Trend: Accountants are Expected to do More Than Bookkeeping
Accountants are increasingly being called upon to be not just bookkeepers, but also consultants. This change is occurring because of advancements in mobile accounting and data analytics, which provide tools that make it possible to instantly receive real-time financial updates and automatically analyze their implications.
Clients want this information; they also want their accountants to be proactive, rather than reactive, Wasp Barcode’s survey results showed.
Accounting firms can capitalize on this by identifying the financial areas where their clients need the most help. The survey found that the accounting-related functions that companies most need assistance with are accounts receivables and collections (51 percent of companies), cash flow (44 percent), managing paperwork (33 percent), closing monthly books (28 percent), and managing payroll (27 percent). All of these represent opportunities for accounting firms to offer value-added services.
Companies that head into 2017 conscious of these trends will be better equipped to serve the needs of their clients and make the most of the new year.