The Top Trends That Will Invade Accounting in 2020

In 2018, the UK’s accounting industry witnessed a revolutionary takeover by automation and digital accounting tools. A lot of accounting firms optimised their processes and adopted the paperless approach.

In 2019, the arrival of Making Tax Digital (MTD) green-signalled the dawn of a technological movement, which paved the way for automation and cloud applications. The year witnessed real-life uses of automation in significantly reducing the workload for accountants. These advancements made some of the critical processes more systematic and transparent, and a lot of accounting firms were receptive to these changes.

Now let’s fast forward to the future: Disruption is imminent. Shifting customer demands and technological changes are demanding a new approach and forcing accounting firms to create more value for clients. It’s true that some accounting services will be more vulnerable to disruption than others. For instance, essential transactional services have been largely automated (though the level of automation varies significantly across geographies and size of accounting firms). Tax compliance will soon be automated, and advisory services will be the next service to follow that trend.

One thing is sure – the next few years are going to be an exciting time for accountants. With steep learning curves and high usage of apps, accountants will focus on offering more of advisory services and strengthening client relationships in the process.

Here are three trends that are expected to rule the UK accounting market in 2020:

1. Automation

Automation will be a game-changer for the accounting industry. It will not just streamline critical processes, but also help in minimising errors and improving work quality. This is the reason there’s an increased acceptance by accounting firms to invest in automated solutions. Have a look at these stats:

• 80% of accounting executives believe that automation gives them a competitive advantage, while 79% say that it increases productivity. (Journal of Accountancy, 2017)
• 55% of accountants plan to utilise AI for automation in the next three years. (Sage Practice of Now, 2018)

What do these stats mean for accounting firms?

Accountings firms and automation will be two sides of the same coin. Firms that use automation will see a drastic reduction in time taken to complete specific processes and reduce the number of errors. While your firm might still be a fair way away from implementing automation tools into day-to-day activities, it’s worth monitoring potential uses and trying to be an early adopter.

The trend of cloud accounting started cementing its place in the industry after the implementation of making tax digital (MTD) in 2019. Cloud accounting will not only encourage collaboration between clients and accountants but also offer enhanced security and data recovery options. Ready accessibility and simplicity of use make it even more enticing for accountants.

Here are some stats:

• Accounting firms that use cloud accounting reported a 15% growth in the year-over-year revenue. (Xero)
• Accounting practices that used cloud accounting reported five times more clients compared to the ones that don’t use the cloud. (Xero)
• 90% of accountants say that cloud accounting can be the key differentiator in the near future. (Journal of Accountancy, 2015)

What do these stats mean for accounting firms?

By adopting this trending technology, your accounting firm can establish itself as a leading brand that provides accurate and timely accounting services. Accounting services like payroll, asset management, accounts payable, and purchase can be quickly handled with the help of cloud-based accounting solutions.

Hiring, training, and retention are three of the many problems almost every business faces, and accounting firms are no exception. To handles these problems and to overcome staffing shortage issues during the busy tax season, accounting firms in the UK will continue to outsource their vital processes. Look at these stats:

• Reduce costs, focus on core functions, solve capacity issues are the most common reasons for firms to outsource. (Deloitte, 2016)
• 65% of the firms that have outsourced in 2017 would likely continue to do so. (Outsourcing Insight)
• The most common accounting tasks to be outsourced include bookkeeping, accounts receivable, accounts payable, payroll, and procurement. (Microsourcing)

What do these stats mean for accounting firms?

The value of accounting outsourcing is clear for all to see. Convenience and profitability are two of the many reasons why outsourcing should be a lucrative strategy for your accounting firm – especially if your firm is servicing clients across time zones. You can also consider the ‘follow the sun’ approach. This means outsourcing to a company based in India will be the right decision because your offshore team will be more than five half hours ahead of your UK team and 12 hours ahead of your US team.

Wrapping up

Don’t pull any stops for tech. In 2020 and beyond, the accounting firms will not just be a one-trick pony. In fact, they will evolve to become interdisciplinary, through innovation and restructuring, and strive to deliver more value and expertise to their clients.

To get your firm started with either or all of the above upcoming trends, reach out to us for a free strategy consultation at [email protected] or call at +44 (845-838-2452).