5 Key Accounting Trends for 2020

Facebook Twitter LinkedIn

Email

If you’re an accounting professional who wants to advance your career in the ever-competitive
marketplace, you should commit to recognizing and understanding the important new accounting
trends for 2020. Developing an understanding of the trends affecting the accounting profession is
important when it comes to putting together a strategic plan for your business.

According to Forbes, the role of an accountant has expanded beyond the lessons learned in
certification courses. Almost 70% of small business accountants today now believe their
advisory roles will become more strategic in the future with the use of technology. Having a
deeper understanding of company strategy will push accountants into a more proactive role in the
future of the business. Company leadership will look to accountants for more input, helping them
shape the direction of their firm and provide real-time insight on strategic decisions.

Ottawa University’s online Master of Accountancy (MAcc) degree prepares you for staying
well-informed of the latest trends in the accounting field with a focus on developing graduates
who are skilled financial practitioners with an innate understanding of the intricacies of
contemporary business to help them advise executives in making strategic financial decisions for
their companies.

Below are five prevailing trends for 2020 in the accounting profession:

#1 - Focus on Data Analytics

One of the key accounting trends in 2020 is the focus on data analysis of underlying accounting
and financial information. Since information is key to making responsible financial decisions,
advancements in data centers, database techniques, and software have ushered in the age of big
data and mining of data to aid management decisions. The information generated by accounting
has always been a crucial component of business decision-making.

The process of analyzing numbers enables businesses to cull valuable insights to identify process
improvements, increase efficiency and manage risks. New technology automates specific
accounting tasks, and therefore the industry is shifting its focus to data analytics. Accountants are
taking on new roles as advisors, with unique skill sets that revolve around analyzing data.

Although data analytics as part of accounting services is not entirely new, it is now more
powerful, presenting financial performance in a new light for better actionable insights. Larger
accounting firms apply data analytics in tax, consulting, risk management, and auditing.
Meanwhile, CPAs in other organizations are utilizing the capabilities of the best data analytics
solutions to support industry-specific needs.

#2 - Automation and Artificial Intelligence

A study by Forbes suggests that 2020 will usher in a new wave of automation in the accounting
industry. Accounting professionals will increasingly be automating the labor-intensive tasks such
as audits, banking, tax preparation, payrolls. This will result in a drastic reduction in accounting
errors and workload, allowing accountants to take on more advisory responsibilities.

One of the exciting prospects of using artificial intelligence to automate accounting processes is
the potential to effectively add a “virtual” member to the team to answer multiple questions and
carry out simple tasks 24/7 even when the office is closed. This emerging technology will be
used in the day-to-day running of firms allowing complex and repetitive tasks to be automated
with AI, machine learning and robotics with extreme accuracy. According to global research
conducted by Sage in 2019, 58% of accountancy professionals are expecting to automate tasks
using AI solutions within the next three years.

The use of automation and AI in today’s accounting practices eliminates confusion and
minimizes errors, which is why companies are more inclined to invest in these emerging
solutions. Since these methods rely heavily on computers, there will be an increased demand for
internal auditors to check for any data inaccuracies. Thus, the converse fear of in-house
accounting services being replaced by bots is not an issue.

#3 - Cloud Accounting

Accounting Today reports that by 2026 the global market for accounting software will have a
value of nearly $12 billion. The arrival of cloud computing or cloud accountancy has been
hugely transformative in how accountants work on a day-to-day basis, and ultimately how they
communicate with their clients. Between 45% to 60% of businesses have already moved to cloud
computing, which removes the need to for businesses to install and maintain accounting software
on each computer. Instead, software will be cloud- or server-based. As a result, software updates
will be streamlined on the cloud without the need for time-intensive in-house renewals and
downloads.

The concept of using shared resources, including accounting software that runs on the providers’
servers and being able to access financial information in the cloud, has made accounting
information more accessible and the process more efficient. Furthermore, the result will be even
more remote accounting jobs for collaborative accounting. Moreover, online accounting also
gives the data an additional layer of security from hacking, damaging or being lost.

Adopting technologically-driven solutions is a trend that will intensify even more in the coming
years. As the demand for digital accounting grows, accounting software companies will address
this need with better solutions. These software platforms possess a range of functionalities
accountants value the most, such as optimizing processes and minimizing manual tasks.

#4 - Outsourcing

The COVID-19 pandemic has triggered some of the most radical employment trends in recent
history, including a sudden spike in remote working throughout all industries, accounting
included. While traditional accounting firms are centered around cohesive in-house teams,
there’s now a growing inclination for outsourcing specific tasks and projects to third-parties.

Businesses outsource in order to save money. In fact, according to recent surveys, 300,000
positions are outsourced every year and 59% of businesses choose to outsource in order to
reduce their expenses. Outsourcing has many advantages, including enabling your organization
to take on new clients, offer a wide range of services, and fill important skill gaps for highly-
technical projects.

Outsourcing accounting functions has multiple benefits. It allows companies to focus more on
their limited resources, while increasing profitability. It also saves them employment costs like
payroll, taxation, salaries, benefits and training expenses. Hence, outsourcing accounting
functions is becoming a popular strategy among many companies. This gives rise to the number
of outsourced accounting service providers, which is one of the fastest-growing areas in the
accounting industry.

#5 – Blockchain

Blockchain is a major trend in accounting that has been increasing in popularity over the last few
years. The emerging technology refers to the use of a network of independent computers to
record, share and synchronize transactions into an immutable ledger of accurate financial
information. Continued investment in blockchain technology in 2020 is poised to yield real-
world results beyond the big players as it becomes more practical, scalable and integrated into
the operational structure of smaller firms and traditional global corporations alike.

Blockchain itself can be seen as a technology based on accountancy, according to Forbes. It

records and stores assets, liabilities, transactions, and provides methods of recording cash flow
and reconciling accounts. It’s a “natural” for the accounting industry which to date has relied on
paper trails and even cloud-based technology to perform accounting functions and transactions
and to ensure that regulatory requirements are met.

Blockchain is a formidable trend in accounting, and its applications will only continue to
increase. It will change the way accountants operate. Accounting won’t become irrelevant, but
rather will become more efficient. The same way computers and the internet have changed
workplaces across all industries, blockchain will provide solutions to industry-wide issues in
accounting.

The accounting industry promises a significant future for anyone willing to adopt new skills and
technology. This is where Ottawa’s Master of Accountancy degree program can help. This 30-
hour online graduate professional degree will prepare graduates for the aforementioned
accounting trends, provide for career advancement and the opportunity to increase earning
potential. The MAcc will also help you meet the 150-hour educational requirement to sit for the
Certified Public Accountant (CPA) exam in most states.
Keep up with the major trends in accounting by advancing your career with Kansas City’s best,
fastest and most affordable online Master of Accountancy degree. To learn more about earning
your online MAcc degree at Ottawa University, contact us today!