If there is one thing we know, it’s that the world is an uncertain place. No one could have predicted in 2019 that the world will shut down because of a pandemic. So much for our predictions for the new year. Within the first few months, several companies permanently closed their operations. However, the pandemic was also an opportunity to learn more about some things. We found out that humans are adaptive, flexible beings.
Therefore, 2021 will include some surprises in store for us. There are some things that we can predict. The pandemic changed how we think about our workplaces and how we run industries. These changes are here to stay. However, many companies are still viewing Covid-19 as a singular event. Business owners must consider the potential interlinking of risks stemming from this pandemic.
Like any other department, it is also necessary to focus on evolving trends within accounting. Some of these trends were already underway before the pandemic. The pandemic has only increased the rate of disruptions. For example, companies were already automating processes for efficiency. However, several new trends also emerged because of the pandemic. Congress passed several new laws to help businesses survive in a post-coronavirus world. New Covid-19 era legislation, such as the CARES Act, provide loans to small businesses to keep their employees on the payroll. Therefore, firms have to keep an eye on the latest developments and trends within the sector to survive.
1. Holistic advisers rather than transactional accountants
2020 was a year of new processes and policies. Companies were panicking about keeping themselves afloat and comply with tax regulations. Therefore, clients are looking for strategic advisors. Many universities are trying to bridge the gap between the demand and supply of accountants with programs like online MAcc. Therefore, accountants have to take charge and communicate efficiently with clients and proactively reach out with insights and information.
2. Using Artificial Intelligence
AI has a significant impact on all industries. Companies are using technology to automate repeatable tasks so that professionals can focus on complex issues and concerns. According to Bernard Marr, artificial intelligence can also reduce errors and improve the quality of work. It can also monitor documents and flag those with issues. With a machine-learning algorithm, businesses can identify suspicious activity and save thousands of dollars. Some accounting firms like EY are already using AI to increase efficiency. Over time, more companies will focus on AI tech.
3. Remote work
Before 2020, only a few companies were working remotely. However, the pandemic changed everything. Companies had to create digital workplaces to keep working during the pandemic. Several companies like Twitter and Dropbox introduced a virtual first workforce. Accountancy firms will offer hybrid-working models in 2021 till the foreseeable future. Some team members will work from company headquarters, while others will provide remote support. Ask your teams and clients about which positions can remain remote and which cannot. The sooner you work on this, the better.
4. Data Analytics
Finance is becoming analytical. Companies use the latest predictive technology, such as forecasting tools and data analytics, to increase processes. These services make companies more proactive and analytical. Machine learning is changing the game for sales forecasts. By using this technology, accountants can disseminate real-time forecasts in evolving situations.
5. Cloud Accounting
Several companies are opting for cloud accounting in 2021. Unlike traditional accounting software, cloud accounting moves the process online. Therefore, businesses do not have to rely on a desktop application. This is beneficial for businesses that require out of office work, real estate management for example can benefit from using their phone, tablet or laptop to access their lease accounting software while on the road. They can save costs and increase accessibility and security. It is no wonder that most professionals opt for cloud accounting to share accounting operations instantly.
6. Diverse Skills
The modern workforce needs people with a diverse skill set. According to a survey, more than 76 percent of accountancy jobs demand candidates with soft skills. The recruiter is looking for accountants with communication skills. They want employees who can succeed in a collaborative environment and actively listen to clients. These skills will remain in demand in the next few years. Future accountants should focus on these skills to improve their portfolios.
7. Data Security
As companies shift online, data breaches are increasingly common. Finance departments are always most vulnerable to cyberattacks from hackers because they manage high-value commercial data. These attacks cost companies thousands of dollars and affect their reputation. Unfortunately, these attacks will only increase in the future. Therefore, accountants will focus on cyber threats by improving their security policies.
8. Changes in taxation
In March 2021, the Senate passed a $1.9 trillion COVID-19 stimulus bill with tax and regulatory policy changes. The Act calls for stimulus payments and employment benefits to qualifying taxpayers. It also contains changes to second-draw PPP loans and expense deduction. Accountants will have to navigate the Act to reassess the total tax liability of their clients and understand changes in tariff policies.
9. ESG Responsibilities
The Association of International Certified Professional Accountants recently increased responsibilities for finance professionals in 2021. CPAs will play an active role in ESG reporting. These disclosures will include reporting climate-related risks and environmental effects of company operations. Accountants will remain at the forefront of ESG strategies to increase diversity in hiring policies and recruitment strategies.
There will be fundamental shifts in industries throughout the world. The world of business and accounting will have to adapt to new processes and ideas to remain relevant in a post-coronavirus world. Therefore, accountants have to use technology and tools to improve efficiency and increase sustainability.