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Top 5 Technology Trends for Accounting in 2021
Technology has become an inseparable part of our daily lives over the last few decades, with every innovation tailored to making usual routines that much easier or more convenient. However, the most notable trait about technology as a whole isn’t its inherent usefulness but its consistent growth as time marches on.
What we use today for our jobs or leisure time is almost guaranteed not to be what we use ten or even five years down the line. This trend is most notable in the accounting field, where recent advances in the industry’s standard procedures make firms run quicker and smoother than ever before.
2021 also promises to be a year of significant change for accounting firms, primarily due to the Covid-19 pandemic rapidly speeding up the innovation process in several key ways. Several new applied technologies are slated to roll out in the coming months or become integrated into the accounting industry’s normal day-to-day. Below, we’ve listed the top five technology trends that accountants are most likely to use to make changes to their workspace in 2021.
1. Cloud Accounting
Most people already use cloud-based storage for their photos, videos, music, and passwords as a way to keep them all in one place. So it was only a matter of time before professional industries realized their potential in the workplace and started to adopt it for themselves. The accounting sphere is no exception.
Cloud storage allows accounting firms to store their financial models in one central location and grants streamlined access to them. Additionally, having all necessary information available in one place bolsters accountants’ ability to collaborate on projects without an extensive email chain.
Accounting companies have had to pivot towards remote working environments during the Covid-19 pandemic, and remote work has become more popular than ever as a result. Cloud accounting lets firms stay ahead of the slowly growing trend, keeping or improving efficiency if they decide to switch over.
Blockchain technologies are another technological trend steadily growing in 2021. While blockchains have seen plenty of use in cryptocurrency transactions and investments, other industries have increasingly started to adopt them as well.
A blockchain can be complicated to understand, but its core purpose is relatively simple to explain. Blockchains function as a type of database that stores specific sets of data in blocks; those blocks have certain information they can hold and are chained together once they’re full.
Using this system, you can create an organized and easily searchable timeline of transactions that significantly lowers the possibility of error. The added precision makes a clear picture of a client’s assets, bolstering efficiency and cutting costs of balancing the accounts.
3. Social Media
While the overall success of remote work led to many companies adopting it permanently, it also inspired them to take other aspects of their business online as well. Their marketing, for instance, has shifted away from traditional print ads and press releases and has instead started to turn towards social media.
Social media acts as a powerful marketing tool in the digital age, allowing many industries to reach thousands of interested customers at once. In 2021, accounting firms realized the usefulness of these platforms and started taking steps to build their brand in the public’s eye. Doing so affords them an easy way to drive more traffic to their website and network with interested parties.
4. Automated Accounting
Automated systems at CPA firms transform the most time-consuming aspect of an accountant’s role into a quick and efficient process. These systems, otherwise known as computerized accounting software, handle all numerical calculations and transaction tracking to allow accountants more time to accomplish their other responsibilities.
However, automation requires digitizing the counting process, opening the system to potential security risks and fraud without consistent inspection. Still, many firms take the risk and automate their systems to reduce mistakes and remove ambiguity in their calculations, saving money, time, and energy.
5. Remote Accounting
As mentioned above, the Covid-19 pandemic caused many businesses to re-examine their work environments as the emergency forced them to shut down physical locations. One of the few benefits of the national shutdown was companies having to embrace remote work and witnessing that it could still be a profitable business model, eliminating the costs of maintaining office space and benefiting the wellness of their employees.
As we go through 2021, the pivot towards remote work has continued as technology advances and makes working from home more convenient and less costly for the company as a whole. The benefits of this trend are especially notable in the accounting industry as recent innovations in its procedures and practices allow accountants to assist clients from anywhere.
As automatic accounting, cloud-based storage, and blockchain databases become increasingly prevalent in accounting firms, more and more of their business will shift online. Making the information available on the net does mean that it’s more vulnerable to fraud and theft. Still, if carefully monitored, the central online location of client accounts enables far greater efficiency and effectiveness.
It’s clear from the above technological trends that the accounting industry is in the middle of a massive shift. While the slow embracing of remote work and online tools isn’t unique to accounting firms, they’re the most equipped to utilize both to their fullest. Accountants can quickly transfer their usual responsibilities to a digitized state, putting systems in place that handle the most rigorous aspects of the job and allowing them more time to provide direct service to the client.
When an accounting company embraces the trends that usually appear as time passes (or at least doesn’t reject them outright), they tend to gain an edge over the competition. It’s common for people to assume that an emerging new technology or procedure is just a flash in the pan, but, more often than not, it’s here to stay.
A successful firm can modify its tactics to match new trends and use them to its advantage to increase its knowledge, expertise, and profits.
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