Northampton, ranked as the top town to start a business in the UK, provides a very favourable environment for businesses to strive and grow. If you’re an avid reader of my blogs you’d know by now how important it is for businesses to stay on top of accounting and finance side of the business to be successful. While all business owners require an accounting professional to crunch the number, each business is unique and so are its accounting needs. In order to provide well suited, tailored solutions to businesses, it’s important for the accountants/ accounting firms to stay on top on advanced accounting trends and understand the nature of businesses and clientele they will be dealing with in 2020.
With the changing business landscape where the concept of global markets and remote work is on all times high, the following accounting trends will be seen in the coming year;
- Sophisticated Automation
- Blockchain Technology
- Millennial clients
- Niche focused firms
- Global competition & outsourcing
In order to stay relevant and to meet the needs of the business community in Northampton, it’s important for accountants/ accountancy firms to adapt to these changes. Let’s have a look at these in more detail.
- Sophisticated Automation
Over the last couple of years we’ve seen more and more businesses switching to automated accounting practices. While AI & Machine learning are designed to improve the efficiency of everyday business processes, there is still reluctance from a group of businesses & industries towards adopting it out of the fear of inaccuracy and lack of human intelligence involved.
Accounts payable professionals who automate invoice capture and payments save an average of one hour per day- Mineral Tree
However, with the advent of cloud based services and numerous apps and software, automation in the field of accountancy has been rapidly adopted. This is because, machines may be accumulating data but only human intelligence can interpret that data and make business decisions based on that data.
AP automation can save $16 per invoice or more, depending on the size of your company- Vanguard Systems AP shocking stats
In the year 2020, automation will not only get more common but will also get more sophisticated with improved technology, more accurate algorithms and advanced software. Keeping in mind the global developments in the industry, accumulating and analysing data in real time is no longer a business edge but a need of time, especially if a business plans on operating in the global market. This means if you as an accountant are not adopting the latest practices, you may not remain relevant in the industry for much long.
By 2020, labour-intensive tasks like tax preparation, audits, and banking will be fully automated- Forbes Study.
- Blockchain Technology
The number of organisations who view blockchain as a top-five strategic priority increased by 10% between 2018 and 2019
It wouldn’t be wrong to say that Blockchain has revolutionised accountancy with a single data point. It means that the client’s record is available at one place and can be accessed by the business owners, clients and the accountant at one place and the changes made by any party can be viewed by everyone. With the efficiency and transparency that it provides, it’s no wonder that it has become so popular amongst the accountants and business owners alike.
Between 2018 & 2019, the number of businesses who believe they have a competitive advantage with blockchain technology increased by 9%
How Can Blockchain Benefit Your Business?
If you’re a business owner and assessing the potential of block chain, here is why accountants are using and recommending it;
- It’s less prone to human error
- It’s very efficient when it comes to analysing business numbers
- Transactions that traditionally take long hours to complete can be completed within minutes using Blockchain
- Blockchain data removes the possibility of fraudulent activity
- The real-time feature provides users with improved transparency in transactions
81% of businesses surveyed are looking to replace their current systems of record
Considering the tight check over financial channels, to eliminate money laundering and terror financing globally, Blockchain- with the transparency that it offers- will remain a prevailing technology in the coming year as well.
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- Millennial Clients
We’re entering an era of millennial clients. Which means accountants will now be dealing with more and more young business owners, the younger lot, who tend to challenge the traditional ways of business approaches. Just like accountants themselves, the future CEOs want to adopt paperless accounting. Keeping a record of all the business numbers manually isn’t only excessively time consuming but also prone to errors. The young business owners understand this and they want to opt. efficient, eco-friendly and accurate methods of financial management.
67 percent of accountants feel that the profession is more competitive
than ever- Sage’s 2018 Practice of Now Report
This means that, unlike the past decade, the accountants are now supposed to work with clients with a different value system. Business owners are looking for these three basic qualities when approaching an accountant/ accountancy firm;
- Complete transparency in financial matters
- A personalised approach
- Proactive attitude
64 percent of accountants reported that a top reason for adopting new
technology was to promote efficiency, and 44 percent cited the ability to improve service quality. Sage’s 2018 Practice of Now Report
Business owners in Northampton will be looking for accountants with more than just number crunching skills. An ability to analyse data, a business partnering mindset and familiarity with the latest accounting practices are qualities that business owner look for when hiring an accountant.
- Niche focused firms
Accounting firms are now opting to stay focused on specific niches. This is great because this, first of all, helps a firm stand out from the crowd, but more importantly this helps accountants specialise in a sector of industry that they enjoy working with. Specialising in a specific niche not only beneficial for the accountancy professionals themselves but it’s also an attraction for businesses that are looking for someone with relevant industrial knowledge. Some of the major benefits of specialising are;
- Get clients through referencing & networking in the same industry
- Spend time working in your own area of interest
- Becoming an expert in the specific field allows you to offer personalised solutions to businesses
Now that we know how specialising in a specific niche can benefit accountancy professionals, let’s have a look at how niche accounting firms can help your business!
Depending upon the nature & size of your business, you might have specific accounting needs such as; bookkeeping, VAT, real estate, tax, forecasting etc. Niche based firms/ professionals are the best option in this scenario because an accountant offering generalised services may not know how to best tackle this.
- Global competition & outsourcing
With globalisation and the rise of “digital nomad-ism” many accounting firms, especially those based in the UK outsource simpler tasks to remote workers in other countries.
In the UK the percentage of work that was outsourced grew by 20% between 2017 and 2018 – Accounting Web
Outsourcing accounting tasks can be a great option for your firm in 2020 as it will give you a chance to assign simpler, less complex tasks to remote workers so that you can divert your focus on more important and complex tasks. Now business owners might worry about their data being handled by offshore workers with whom they don’t have much direct Interaction! Here is the good news; it’s only going to be in your favor. Remote workers are experts in their work as they need minimal assistance in getting things done, moreover, when an accountancy firm outsources tasks, it only creates a two-step check system where each task is reviewed by your firm after it has been completed by a remote professional.
You’ll also be able to maintain personalised communication with your accounting firm/ professional when they won’t be consumed by a plethora of tasks and as a result they will deliver the best possible service for your business.
Conclusion
As far as the business owner & accountancy firms relation is considered, the year 2020 will be impacted majorly by globalisation and millennial clients. Technology wise we are only going to move towards more sophisticated solutions that everyone in the field has to adopt in order to stay relevant.
