5 Accouting tech Trends for 2017

If your accounting system isn’t up to snuff, you’re not going to make money. If you don’t understand your costs, how much your time is actually worth, and how you should best invest in your business, don’t expect to be in business five years from now.

Conversely, if you do understand the financial foundation of your business, you’re going to be leagues ahead of the competition. If you want to make the move to a better, stronger system in 2017, here are a few of the trends that you should be on the lookout for.

1. Cloud adoption will continue to rise

While we’re unlikely to hit the 90 percent cloud adoption rate that’s been predicted for the UK, the US is certainly going to see more small businesses in the cloud. If you’re just wading into the accounting software space or if you’re planning to make a change in 2017, you should take a close look at the pros and cons of cloud-based accounting.

I prefer the cloud, myself. You’ve got better access to your data – as does your accountant – the software requires less upkeep on your end, and it’s a very secure system. On the downside, it’s a recurring cost and there are companies that make extracting your data less than straightforward, which can impact switching costs.

More providers than ever have cloud offerings, so you should be able to find something that fits your needs. A few of the more popular accounting software options – FreshBooks, Wave, and Xero, for instance – are cloud-only.

2. Accounting software will decentralize

We’re used to accounting software packages being all-in-one collections of financial management. You can bill, generate reports, manage inventory, and run payroll all under one roof. I typically think of this as the ERP model. It creates a nicely unified view of your business, but it can be unwieldy at the same time.

In 2017, more businesses are going to offer decentralized offerings. Zenefits has made this move in the HR space with its Z2 offering. The platform doesn’t solve all of your HR problems. Instead, it focuses on core hiring and management issues, then offers a bucket of integrations to manage the less pressing issues.

Zenefit’s director of channel sales, Matt Plank, said, “A great trend that we’re seeing in the accounting space is not only using cloud apps as a point solution to solve a very real need for a business, but also leveraging several cloud apps that actually speak to each other and share information.”

I think accounting providers are going to start seeing the value in doubling down on double-entry accounting, generating more revenue with the partnerships they create with those integrations. It’s a win for the software vendors and a win for business owners, who will just buy the parts they need.

3. Workflow automation will take center stage

The main focus of the last few years in accounting has been that shift to the cloud. All we talk about is how we’re finally going to get away from an installed-base and catch up with the rest of the software world in the cloud. I think that’s going to continue, but I also think businesses are going to spend more time finding better ways to work across teams.

Accounting has always been a bugbear – no one opens a law firm to balance the books. To make accounting more accessible, accounting software is focusing on workflow systems. Take a picture of your receipt, and the software automagically reads it, turns it into data, enters it into your books, and assigns it to the proper account.

I imagine that more behind-the-scenes magic is going to make an appearance this year,. I think the bigger players, especially, will start to integrate some of this workflow management into their systems in an attempt to keep up with the underdogs.

4. Accountants are going to become consultants

In addition to changes in your software, you’re also going to be seeing changes in the accountant you work with. Don’t be afeared.

The most customer-facing change will be the way they bill your small business. Whereas you historically pay an accountant $X per hour, new plans will bill you for a set job. This gives your accountant more flexibility with their own time, gives you certainty in pricing, and allows your accountant to add in extra services that actually add value to your business.

Instead of just tax preparation, you can get a financial outlook on your next year along with recommendations on how to lower your next tax bill. Instead of just balancing the books for the month, you’ll get cash flow projections and inventory recommendations.

Accountants are going to “transform from number crunchers to trusted advisors,” Plank says. The rise of those workflow and cloud-based apps “reduces the time spent entering data in various applications and provides data integrity due to minimized human interaction.” That ends up being time that your accountant can spend making your business stronger.

5. Accounting will fight against commoditization

This last point may mark the biggest change in how you make your next accounting software purchase. With the rise of automation and software-managed accounting, the field has started to look a little same-ish. Everyone is offering similar tools, with similar success rates, and uptimes.

Software breaking into apps, the change in billing, the push to the cloud, and all the rest of this is just a push toward differentiation. The problem with a heavy shift to the diverse is that it creates too many options to make sense of.

Luckily, you’ve got two great options. First, you can check out the Capterra accounting software directory, read reviews from verified users, and search based on the features you need. Second, you can talk to your accountant to get their recommendation.

Plank says, “[People] who have spent their entire careers in accounting are now extremely well-versed in software applications and can do the vendor vetting for you.”

Find a trusted source to separate the wheat from the chaff.

2017 and beyond

All of these trends are going to continue for the next few years. Things will shift in importance and new trends will be added, but this is the landscape for the foreseeable future. If you want to end up on top of the pile, you need to get a handle on your finances. This can be your year.

http://blog.capterra.com/5-accounting-trends-for-2017/

The Top 5 Business Challenges for Accounting & Financial Services Firms.

Any decision-maker at a CPA firm knows the industry is undergoing a wide range of dramatic changes – and the effects of those changes are hitting all at once to produce a whole new set of major business challenges.

At CPA firms across the country, aging baby boomers in senior roles are approaching retirement and driving consolidation. Throughout the marketplace, a pitched battle is underway to secure the top talent. In this demanding and highly competitive environment, the ability to anticipate emerging challenges can spell the difference between the market leaders and the also-rans.

That’s why we set out to better understand the business challenges that will define the future for accounting and financial services firms – to give them a competitive edge.

The Hinge Research Institute surveyed 530 professional services firms of many different industries and firm sizes, as part of an ongoing study of professional services firms and how they grow. Here, respondents were primarily owners and marketing executives.

With this research, we were able to determine not only the business challenges facing professional services firms, but marketing initiatives those firms are undertaking to address their challenges. What’s more, we were able to break down the results to examine industry-specific challenges for accounting and financial services firms – and the results were revealing.

The Top 5 Business Challenges

So what were these leading challenges, and what do they mean for firms seeking to remain competitive in today’s demanding marketplace?

Attracting & Developing New Business

Cited by over 70% of respondents, attracting and developing new business is the top challenge for accounting and financial services firms.

This is in line with a trend across the professional services industries. In many market segments, it’s growing more and more challenging to generate new clients. The competition is fierce.

Specifically, accounting and financial services firms are feeling significant pressure from international competition. In light of significant competitive pressure, organic growth is a critical goal for firms.

Finding & Keeping Good People

Noted by 51% of respondents, this is a trend we’ve been tracking for some time, and the race for talent is only continuing to heat up. Talent acquisition is becoming a major focus with many firms.

What lies behind this challenge? We’ve already touched on it briefly above: generational change and cyclical labor shortage. As baby boomers retire, it’s increasingly urgent for firms to secure strong talent and plan for the next wave of leaders.

A firm’s brand plays a crucial role in this process, and part of a firm’s brand is its reputation for employing and cultivating leaders. But how do you build that reputation? Consider the next challenge, intimately tied with this one…

Leadership & Internal Change Issues

Here again, we see the effects of baby boomers’ mass retirement: this challenge is cited by 33% of respondents. Firms are expending a great deal of energy addressing questions of leadership and internal change.

This plays into the question we raised in the last section: how do you build a reputation for employing and developing leaders? For that matter, how do you develop leaders in the first place?

The answer lies in high-visibility experts. Perhaps you have such experts in your firm already: figures widely recognized in the industry and even beyond for their talents. These well-known professionals, who we call Visible Experts®, boost the perception of your overall brand among both clients and employees.

Our research shows that it’s possible to cultivate Visible Experts® in your firm through a program of consistent, replicable techniques. Consider how a Visible Expert® program may help you develop the next generation of leadership while simultaneously acting as a draw for potential employees who wish to build their reputations.

Technology Issues

Over 30% of respondents report technology issues as a top challenge for their firms. This is best understood as the struggle to keep up with evolving technological needs and related client expectations.

Often, common business challenges in an industry double as rich opportunities, and this is just such a case for accounting and financial services firms. For just one example, firms that leverage the power of marketing automation and join it to distinctive expert insights have the opportunity to differentiate themselves. It’s precisely because the field as a whole is struggling with technology that using it successfully can be so effective.

Dealing With Client Demands & Expectations

Dealing with clients’ demands and expectations represents a high-priority challenge for over 29% of respondents. Clients are expecting stellar service – and more to the point, they’re expecting to have their problems solved. We’ve seen the importance of these expectations in previous research, and it takes a lot of management attention to ensure that clients are satisfied.

One key step for firms to address this challenge is to know which type of client you succeed with best – and develop a program aimed at securing more clients of that sort. Often, success is a matter of well-matched partners.

Conclusion

Attracting and developing new clients is a key business driver for CPA firms today. As clients’ needs, buying behaviors, and expectations evolve, firms’ marketing efforts must adapt alongside them. At the same time, these marketing efforts must also focus on attracting and keeping the best talent.

As CPA firms attempt to address all of these challenges, the need for highly strategic, coordinated marketing is greater than ever, and many firms may require expert guidance. The firms that are able to build a nimble and multi-purpose marketing machine will be the ones that compete successfully and grow.

https://hingemarketing.com/blog/story/the-top-5-business-challenges-for-accounting-financial-services-firms

Top 5 Trends Shaping Accounting’s Future

What trends will have the biggest impact on accounting firms and their clients over the next five years? How well-prepared are accountants to take advantage of these trends? These two questions were the focus of a new report released on Monday by Wolters Kluwer, CCH, a global provider of tax, accounting, and audit information, software, and services.

Close to 500 accounting professionals who specialize in tax, audit CFO/consulting, and other financial services at CPA-led firms with as little as two to more than 500 employees were polled in August for the 2014 Wolters Kluwer, CCH Preparedness Survey.

Key results of the survey were presented by Wolters Kluwer, CCH President and CEO Teresa Mackintosh during her keynote address on Monday morning at the CCH Connections User Conference 2014 in Orlando.

“There are ample opportunities for all accounting firms to boost productivity and profitability, but what’s critical is knowing where those opportunities exist and how to leverage them to improve client satisfaction,” she said. “The combination of understanding these survey results along with listening to industry peers describe how they capitalize on key trends to succeed can be highly influential in charting a course of future business growth.”

The report reveals that the most significant outcome of well-prepared firms isn’t just a high overall level of confidence, but results. In addition to reporting being more productive and more profitable, “very prepared” firms strongly believe that technology is the key to managing change and driving better business results, according to Wolters Kluwer, CCH.

However, the survey found that only 18 percent of accounting firms say they are “very prepared” to take advantage of the top five trends Wolters Kluwer, CCH identified as having the most significant impact on the future of the profession. Eighty-two percent of firms are “less prepared.”

According to the report, the five top trends facing the profession are:

1. Increased focus on client service: Providing enhanced customer service, leveraging technology to automate processes and free up staff, while providing more personalized and strategic advice and counsel to clients.

Client service has progressed from the traditional one-on-one, face-to-face connections of the past to a continuous loop of client engagement opportunities. The connections between a firm and its clients have shifted from infrequent and deep to ever-present and open-ended.

“Agility trumps ability,” Doug Sleeter, founder and CEO of The Sleeter Group Inc., said in the report. “The pace of change is faster than ever, and accountants who focus more on agility than on raw ability will thrive in the coming years.”

According to the survey results, eight in 10 “very prepared” firms say that placing an increased focus on client service will have a huge impact on the future of their business. Also, when asked to rate the importance of technology across a variety of functions essential to accounting firms over the next five years, 76 percent of those who feel they are “very prepared” said technology will have a major impact on their ability to provide service, support, and added value, as well as to retain existing clients.

2. Technology integration challenges: Making sound and strategic investments in technology today, while providing a smooth migration and integration path to new and emerging technologies.

What are the rewards for integrating technologies? According to the report, the average time it takes a firm to go from initial client engagement through invoicing to cash in the bank varies significantly between the “very prepared” and “less prepared” groups. The survey found that the “very prepared” group is 10 business days faster – with an average of 14 days compared to “less prepared” with an average of 24 days.

3. Digital mobility opportunities: Reducing capital costs; increasing service and employee productivity by leveraging mobile devices and digital platforms; and consolidating and integrating cloud-based information repositories.

Nearly 80 percent of “very prepared” firms say digital mobility opportunities will play a “very significant” role in their business within the next five years, according to the survey results.

In addition, among the 93 percent of accountants who say they’ve already implemented mobile solutions or have plans to within the next three years, the No. 1 benefit they’ve realized, or hope to realize, is improved client service (58 percent), followed by improved productivity (55 percent) and improved work-life benefits for staff (49 percent).

The survey also found that more “very prepared” firms have already adopted cloud technology compared to “less prepared” firms (62 percent versus 55 percent).

4. Talent management and succession planning: Identifying and managing talent, developing new and different skill sets, and managing the retirement of senior leaders.

According to the survey, nearly seven out of 10 “very prepared” firms are ready to take advantage of talent management and staff succession planning in looking at the future, compared to only 30 percent of “less prepared” firms.

More than 60 percent of equity partners in US public accounting firms are over the age of 50, and 75 percent of the membership of the American Institute of CPAs will be eligible to retire by the year 2020, Bill Carlino, managing director of Transition Advisors, noted in the report.

“That translates into a huge talent void,” he said. “Larger firms with 50 or more employees typically have formal succession plans in place, with efforts to retain talent. Among smaller firms with less than 25 employees, roughly 70 percent do not have any type of succession plan in place, nor path to equity among their employees.”

5. Social media as a business tool: Becoming more sophisticated in the use of Twitter and other social media to market their business, finding and engaging clients online, and monitoring the competitive landscape.

Sixty-nine percent of “very prepared” firms have already implemented social media as a business tool, while 28 percent plan to in the future, according to the survey. Among “less prepared” firms, 55 percent are already using social media platforms, while 34 percent plan to in the future.

Firms say the greatest benefits to having a social media presence are to enhance client satisfaction, followed by the benefit of attracting and winning new business.

“Using social media to ‘listen’ to clients and understand their industries is a powerful way to connect and deepen your client relationships,” Tom Hood, CEO of the Maryland Association of CPAs, said in the report. “Re-tweeting, ‘liking,’ and sharing their news and stories can keep your firm in front of the market continuously.”

http://www.accountingweb.com/technology/trends/top-5-trends-shaping-accountings-future

5 Trends Driving Disruption in the Accounting Industry

Double-entry accounting was invented at least a 1,000 years ago. Big changes are long overdue.

SEPTEMBER 23, 2016
Over the past few years, new technologies and tools have emerged and transformed just about every aspect of business, including marketing, management, web design and HR. It’s easy to feel like accounting and bookkeeping have been forgotten. Until recently, the industry was stuck in the dark ages. But with the emergence of powerful new technologies over the years, it’s finally beginning to look like an industry that’s ripe for disruption.

Before delving into the specifics of the accounting industry and the impending disruption, let’s take a moment to review some of the common drivers behind general disruption.

Complacency: This is the biggest sign that disruption is on the way. When businesses get complacent and decide to coast on past accomplishments, outsiders take notice and see an opportunity to come in, and stake a claim.

Frustration: Couple complacency from vendors with frustrations from customers, and some friction starts to develop. Customers want better offerings, but the vendors realize they have nowhere else to turn. Again, outsiders take notice, and see an opportunity.

Lack of automation: Everything is about automation in business. If there’s a task that’s still being performed manually, it’s costing companies time. Someone else will try to come in, and disrupt the industry by offering an automated solution to satisfy the frustrations of existing customers.

Emphasis on innovation: Finally, disruption starts to boil over when you see startups enter the marketplace, and prioritize innovation. This leads to larger companies taking notice and either purchasing these startups or revamping their own approach to innovation.

When two or more of these drivers are present in an industry, then you can accurately predict disruption is right around the corner. Looking at the accounting industry, it’s easy to see how all four of these drivers are in play. In other words, disruption is imminent.

While it’s easy to see how those four factors are present in the accounting industry, let’s dig a little deeper and actually analyze some of the trends that are driving disruption at this very moment.

1. Clients want better connectivity.
Take a look at any service-based industry, and you can identify ways in which processes have become more customer-centric. Well, with the Internet, cloud technology and remote tools, accountants have the ability to connect with clients in meaningful ways. And it looks like they may be finally taking advantage of these capabilities.

“Online technology is giving us real connectivity with our clients and their team,” Brett Bennett said. “It means we’re having completely different levels of discussions regarding their farms. We can collectively discuss scenarios and business plans, and our clients recognize that value.”

2. Automated data entry.
Automation is the key driving factor in accounting and bookkeeping disruption.

Specifically, we’re seeing this lead to the disappearance of manual data entry. Thanks to things like automatic imports, electronic documents and robust software solutions, some businesses are even able to eliminate data entry completely.

This leads to more efficiency and allows businesses to better utilize human capital.

“The greatest disruption will result from automation of data entry and workflows. This alone leads to three major changes. One, faster processing which translates into real-time reporting and more timely financials. Two, increased accuracy with less human error. And three, significant reductions in cost on an order of magnitude of 50 to 75 percent”, accounting technologist Louie Balasny said.

3. Growth of the DIY approach.

One trend that we’ve been keeping any eye on for years is the growth of accounting software. And now that cloud solutions – such as QuickBooks — have entered the marketplace, we’re seeing a lot of small businesses trying the DIY approach.

On a related noted, things like web tutorials, YouTube videos, webinars and search engines, now allow businesses to access just about anything necessary to handle their own accounting and bookkeeping needs.

“This act of moving accounting online doesn’t precipitate the end of accountants,” accounting expert Jonathan Poston said. “However, what does push accountants to the margins is how inexpensive and user-friendly the new online accounting software is.”

4. Machine learning and powerful insights.
Accountants are generally able to sort through data, and deliver predictive insights based on past information. However, as technology advances, things like machine learning and artificial intelligence (AI) are making it possible for accountants to access real-time insights that can be used in the moment to add value to businesses and clients.

“An accountant will be able to look at [the insights], and hopefully the big data systems will be intelligent enough to be able to say: Here are the key things happening in this business which are different to other businesses in that category,” one expert says. “This business is not performing in these areas, so go out and have a discussion with your client about those things.”

Related: 3 Benefits of Cloud-Based Accounting Tools for Small-Business Owners

5. Demand for specialization.
We’re seeing it everywhere. People and businesses are getting a taste of specialization, and they’ve now come to expect it in every product or service they use.

If you think about it, specialization is one of the driving factors of disruption in every industry. Cable customers are cutting the cord and choosing à la carte alternatives. Social media users can tweak filters to see only the content they want to consume. Smartphone users can pick which apps they want. The list goes on and on.

In terms of accounting, this is boiling over and creating a demand for specialization over bundled packages. Businesses only want to pay for the accounting and bookkeeping services they need. This is ultimately putting added pressure on the marketplace. As a result, accounting software providers are adjusting their product offerings and pricing structures accordingly. In the future, look for accounting solutions to become à la carte.

There’s no doubt that disruption is right around the corner. The accounting industry is still in the dark ages, when compared to other industries, but there’s currently a major emphasis on modernizing through automation.

It will take a few months, but don’t be surprised to see an entirely new accounting industry in 2017 and beyond.

https://www.entrepreneur.com/article/281931

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