The accounting industry continues to quietly undergo a transformation that will be revolutionary once the history books are written. This transformation is mainly the fruit of rapid developments in the technological infrastructure that powers the day-to-day functions of accounting practice.
Those organizations who are adaptable and among the early adopters of these emerging accounting trends stand to capitalize significantly over their competition. On the other hand, organizations that are resistant to change will fall farther behind and may even become obsolete.
In this article, we take a closer look at three emerging trends in accounting practice for 2022 and how they can help your business.
1. Accounting Automation
Accounting automation is enabled by cutting-edge software programs that allow daily accounting functions to be completed with minimal human involvement. Any routine accounting function that has a clear set of rules can now be designed by software and executed by these programs automatically without human intervention.
The automation of accounting functions will be a rapidly growing trend in 2022. There are tremendous benefits for organizations who adopt automation technologies in their accounting practices. The two most significant benefits are increased efficiency and reduction of errors.
Prior to automation, many daily accounting tasks were done manually. These manual tasks were time-consuming and required substantial amounts of human resources. With accounting automation, these tasks that were once done manually are now done automatically by software programs. The result is that those tasks are completed much faster and with much fewer human resources.
This increased process efficiency enabled by automation allows the members of your team to focus on activities that are more valuable to your organization. These high-value activities include delivering better customer service and spending time on strategy and planning. Since the manual tasks are now automated, your accounting team is freed up to delight your customers more as well as spend time and energy planning how to make your business even better for the future.
Reduction of Errors
If your accounting team is overwhelmed by a mountain of daily tasks that they have to do manually, they will have to work faster to try to get everything finished on time. This rushed process will inevitably result in more errors in their work. Accounting errors are not only a source of liability for your company, they also take up a considerable amount of extra time by having to diagnose, correct, and readjust downstream books and records that were impacted.
By implementing automated accounting technologies in 2022 your organization will experience tremendous benefits because the automated programs will be able to detect and even prevent accounting errors from occurring. Furthermore, if an error is detected by the automated accounting program, it will be much easier and less time consuming to fix because once the error is corrected, the software will take care of adjusting all downstream books and records that were affected by the error.
2. Agile Accounting
A recent survey found that 54% of CFOs plan to make remote work permanent for their accounting teams even after the coronavirus pandemic is over. This phenomenon represents a major shift in thinking about traditional processes within accounting departments.
One of the most significant consequences of this shift is that accounting teams will need to be more agile in 2022 than ever before. In short, an agile accounting team is one that can have its members working in different locations at different times, but still meeting the goals of the accounting practice.
One of the keys that is going to enable agile accounting is cloud storage technology. Prior to the dawn of agile accounting in the industry, firms stored their accounting data on local servers within their organizations. As a result of this local storage, team members generally needed to be onsite to access the accounting data. With cloud services, an organization’s accounting data can now be securely stored within the cloud and accessed from anywhere in the world. In this way, cloud storage is a game-changer and has revolutionized the approaches businesses are now taking towards implementing more lean and agile accounting processes in their organizations.
In addition to bringing increased agility to accounting teams themselves, agile accounting is also going to have an impact on hiring and retaining top accounting talent in 2022. Agile accounting methods have obvious attractions for potential new team members. With an agile model, job candidates are attracted by the ability to work from their current cities and not have to move to a new location. They are also enticed by being able to work at different times during the day or night depending on what best suits their lifestyle.
In short, agile accounting methodologies—enabled by cloud storage technology—will be a major disruptor in 2022. Accounting teams will become more agile and leaner than ever before. Organizations who don’t adopt agile methods may encounter problems hiring and retaining top accounting talent in 2022.
3. Outsourced Accounting
The year 2022 will also see a continued increase in outsourced accounting. Outsourced accounting encompasses many accounting functions including:
- Accounts payable
- Account receivable
- General ledger accounting
- Budget projections
- Time and expense reporting
With outsourced accounting, these standard accounting functions—as well as many others—are outsourced by businesses to specialist accounting firms.
Many organizations will continue to realize in 2022 that outsourced accounting firms bring a wealth of experience to their business. Additionally, by entrusting their standard accounting functions to qualified experts, businesses are freed up to focus on high-value activities such as revenue generation via more sales and better customer service.
Two additional benefits that businesses will realize from outsourced accounting services are the application of advanced technologies to their accounting processes and consultative financial expertise. Third-party outsourced accounting firms are experts in the latest accounting software programs. These outsourced partners can help businesses build valuable accounting software ecosystems that will automate many of their accounting functions.
Outsourced accounting partners also bring tremendous value to their clients in the form of consultative financial guidance to help their business planning and strategy. With outsourced accounting, you get access to a highly-experienced controller or CFO who can leverage their decades of experience to help you optimize the accounting and financial aspects of your business even further.
Staying Ahead of the Accounting Curve in 2022
As you can see, 2022 is going to be a year of rapid progress for the accounting industry. Accounting teams who are quick to adopt automated accounting technologies will make leaps over their competition in terms of vastly increased efficiencies.
Additionally, companies who become leaner and more agile will enjoy higher employee satisfaction and be able to attract top accounting talent. For organizations who are feeling overwhelmed by the demands of running a top-notch accounting practice, outsourced accounting services will be more necessary than ever in 2022.