The Future of Accounting: 5 Trends That Will Define 2021

How do you say goodbye to a year like 2020?

You take all the valuable lessons from this excruciatingly challenging year and step into the new decade.

We are close to stepping into 2021 and now is the right time for accountants to look back and analyse what worked for them and what didn’t.

2020 was a game-changer for accountants. The year was spent supporting clients and evolving into a new breed of accountants who can do more than just making financial reports. We noticed a massive shift in their role and this shift was attributed to reasons like marketing demands, regulations, generation change, client demands and investments. With such transformation taking place in the industry, accountants need to think strategically and implement practices that make their firm future-ready not only for 2021 but many years that follow.

Source: Sage

Here’s a list of 5 emerging accounting trends that are going to have a remarkable impact on the accounting industry in 2021:

1. Advisory Services to Drive More Growth & Profits

Jobs like bookkeeping, payroll, tax returns are immensely time-consuming and not to forget, low-margin. There was a time when the role of an accountant was just to calculate numbers and translate that into a report. However, this definition of an accountant doesn’t work today.

With the rise of AI, accountants are expected to move their roles from number crunchers to consultants and advisors. They need to help their clients, not just with numbers but the analysis as well.

Advisory services are going to be the main growth drivers for accountants. Accountants can optimise the power of automation and skip the calculation bit and jump to the part where they analyse and draw conclusions. They may also use accounting outsourcing to increase efficiency and reduce errors. These strategic roles help accountants provide more value in less time. 

2. More Focus on Client Retention

Client retention is a common problem that accountants have always been struggling with since ages. The challenge is the abundance of competitors available in the market.

In 2021, around 42% accountants intend to focus on deepening connection with the clients and building more fruitful relationships. The idea is not just to provide great services but also have a great understanding of client’s business which helps customise solutions for them.

So, become a true partner, be that irreplaceable ‘go-to’ accountant for your clients and provide them with tailor-made services which have no substitute available in the market.

3. Cloud Accounting and Automated Accounting Processes

Cloud accounting and automated accounting process are the two biggest technological developments that the accounting industry has witnessed in the last decade. The demand for such computerised accounting is growing, accounting software solutions are evolving each day and in the near future, it is just going to intensify even more.

Accounting software solutions like QuickBooks, Sage, Xero, etc. have enabled accountants to leave behind all the drudgery of manual data entry and optimise all their accounting processes. Accountants can now deliver up-to-date, high-quality financial information while sitting in their homes. They get real-time analytical data and comprehensive reporting that enables them to help their clients with their business decisions.

According to McKinsey, 50% of accounting tasks can be automated through currently available technologies. Accounting firms are keen on taking that big leap and leverage technology to get that necessary competitive edge. Here’s an insight on how accounting firms are embracing automated accounting processes:

Source: Accounting Today

4. Centre Stage to Outsourcing

Outsourced accounting services have become more crucial than ever. Almost 64% of accountants look forward to outsourcing their compliance work from outsourcing firms so that they can cut costs, spend more time with their clients and increase their profits by offering higher-value advisory services. There’s also an added advantage of getting access to experts who have the right skills and knowledge of the latest practices, new technological developments and legislations.

With more free time in hand, firm owners can upskill their in-house team and make their firm ready for what comes next.

5. Virtual Collaboration for 2021 & Beyond

If there’s one good thing that happened in 2020, it is the work-from-home work setup. It broke the archetype of a 9-5 job, with defined structures and rigid routines, and gave each one of us the gift of flexibility. Now accountants can choose to work in their most productive hours without having to worry about reaching home on time.

Thanks to technology – it enabled accountants to bring maximum productivity while working from home. This increased level of productivity has led many accounting firms to plan to continue working from home in the long run. Employees have location independence; they are producing better work and there’s better job retention. What else could employers ask for?

To a New Beginning…

All these five accounting trends funnel down to digitisation. With so much transformation happening in the accounting industry, we can conclude that the year ahead is going to be full of opportunities. All that accountants need to do is to upgrade themselves to align with the changes that take place. Be adaptive and vigilant because that’s the key to becoming an invaluable asset to your client.

Stay tuned for more updates and follow us on LinkedIn and Twitter with our social media handle @QXASLtd or reach out to our experts for consultations. Our experts will be happy to help!