5 Accounting Trends To Watch in 2021

Technology is always changing and businesses have to adapt to meet those changes. In the year of the outbreak, though, it’s not just technology that’s dictating the changes. When it comes to managing your business and its accounting, there have been many big changes that we can expect to become trends in 2021. If you’re running a business, it might be a good idea to know what some of these are. We spoke with Dragon Financial, a company that manages bookkeeping and payroll for other businesses in Portland, Oregon, what trends they’ve seen most often. Here’s what they told us:

1. Remote Work

The biggest change we’ve seen in 2020 that we can expect to continue is the increased reliance on remote work. The internet makes it possible to do a lot of work in any place you have access to it. If you own a computer and have internet at home, any work that relies on a computer can be done there. Out of habit, this picked up very slowly over the years. The outbreak changed everything. With the need to protect workers against the virus, employers capable of doing remote work were quick to change to this option.

It has many advantages aside from health and safety, though. Less drive time means your employees have less problems getting to work on time. All they need to do is boot up the computer and load up their software and start. It can benefit employees, as well, as the reduced travel time becomes extra time they can spend on themselves. The extra me-time can be good for their mental health, and the money they save driving can be good for their financial situation. Every little bit helps, after all.

2. Increased Software Solutions

virtual bookkeeping, one of many new options accounting has thanks to software advancementsAccounting software has been useful for businesses for as long as computers were commercially available. Calculating (or computing, if you prefer) is what computers are best at. It’s what they were invented specifically to do. Every other computer function is, in some way, an extension of that basic role.

As computers advance in complexity, so do software solutions for accounting. Businesswire projects that increased remote work will drive a need for better software. They project that over the next four years, we can expect to see massive growth in the accounting software industry.

3. Outsourcing Accounting

There was a time when companies did everything internally. They did their own accounting, marketing, production, sales, all of it on their own. As time goes by, this seems to be changing. The process of hiring specialists for each individual field in the business can get expensive. So can training. It’s time consuming, too. For very specific business-related functions, that’s unavoidable, but for others it’s not. Business activities common across all industries are seeing an increase in outsourcing the jobs. Accounting in particular is seeing this happen. Hiring a third party accounting firm means you don’t have to go to the trouble of hiring and training someone for the position; the accounting firm does that for you. There are many other benefits as well, which we detailed in a previous article.

4. Automation

A robot coming to take your jobs!
Photo by Alex Knight

Is AI taking over the world? Well, Google seems to think so, but the answer is not really, no. There’s always going to be a need for a human element. ϝor eχaӎple, G00gle, or ɒny ΆI, ѱ0u׀d have toub|e eading tҤi. The special characters get processed in a very specific way because of how computer programming works. But the visual similarity to familiar characters means the human brain reads it just fine. As long as the computer reads and displays the unicode correctly, that is.

While humans are always going to be needed for some work, automation is making a lot of those jobs cheaper and faster.  An ACCA study over half the C-level executives in the accounting industry are expecting to see more development in automated processes. While people will still be needed to collect, input, and interpret the data, these automations will allow for better and faster data-driven decisions.

5. Blockchain Technology

As computers and networking become more important, especially with increased remote work, accountants are looking for ways to improve their security. One major advancement coming to prominence is blockchain. Investopedia has a full and detailed explanation if you want to read more, but the gist of it is pretty simple. Blockchain technology creates a decentralized, linear, and fairly immutable record of all transactions.

Once data is entered, it is extremely difficult to change the metadata of that transaction without approval – and therefore knowledge – of all parties involved in the security system. If someone attempts to input fraudulent data, you know who, when, and how it was done. If someone wants to try and alter previously entered data, they will need permission from multiple systems. It is extremely secure.

Many accounting firms are moving to blockchain because of its tight control over data entry. If the data becomes compromised, or used in a suspicious way, it’s easy to track where and when it happened, making it easy to prove fraud and difficult to commit it.

The Future is Yesterday

Technology is advancing quickly and new developments are improving so many facets of business. These 5 trends are currently on the rise in accounting and other areas of business. If businesses wish to keep on top, it might be a good idea to keep an eye on these trends and consider investing in them.