Prepare Your Business for the Future of Accounting
We live in a world where a new iPhone is released every year, and a new social media platform becomes more popular by the time we finally understand the current one. It comes as no surprise that the millennial generation has revolutionized the way businesses use technology nowadays; just imagine what the next generation, Gen Z, will introduce to the modern world in terms of technological advancement. You may be asking yourself, what does this have to do with accounting?
Successful business owners understand that they have to use the information their accounting systems provide to make the best possible decisions for their company. As a business owner, have you thought about what the future of accounting will look like? At CPA by Choice we want to make sure that our clients are taking a proactive approach in this transformational era of innovation, here are some items we should be observing in order to prepare for the future of accounting:
Be on the Cloud
Chances are that by now, in 2021, your business is already using an online-based accounting software like Quickbooks or Sage Intacct (see blog on accounting software). These software are affordable, user-friendly, and convenient for your accountant and your clients. If you are not using one of these software yet, perhaps because you are a new business owner, we recommend that you transition to the cloud. Cloud technology allows for better monitoring of your business, immediate accessibility from anywhere in the world (as long as you have internet), increased security benefits than in-house systems, and enhanced collaboration amongst everyone involved in your business, that includes your clients.
Automated Accounting
Automation is the technique of making a process or system operate automatically. According to the Association of Chartered Certified Accountants (ACCA), more than 50% of executives expect automated accounting systems to develop in the coming years. Automation is used in everyday life nowadays, for example if you drive to the gym every day at 6pm from your home, your cellphone has now recognized that this is part of your routine and next time you get in your car from your home at 6pm it will automatically alert you of your estimated time of arrival to the gym; technology has learned to use less human intervention to calculate this. The same will apply to accounting systems, your business accountant will need to develop new processes and procedures in their practice to determine which data can be automatically entered and what must be manually entered. Automation allows for business owners and accountants to spend less time reconciling and more time on helping clients and growing the business. Added benefits to automated accounting include improved margins, improved customer service, improved accuracy, and faster turnaround time. Some areas where automated accounting is already popular today is in payroll automation and tax preparation.
Cryptocurrency
Most recently cryptocurrency, such as Bitcoin and Ether, have become more widespread and it is only a matter of time before more and more people understand how it works and invest in it. Cryptocurrency is a medium of exchange, therefore it is likely to have significant ramifications in the accounting world. With the rapid growth of cryptocurrencies, it is expected that the government/IRS will increase reporting guidelines on this currency and business owners and their accountants should remain informed in order to have a competitive advantage and to be able to answer questions for their clients. It may be a while before your business fully engages with cryptocurrency, but definitely worth mentioning as part of what the future holds.
Assess your Business & Request Feedback from your Clients
With technology rapidly changing, we must listen to our clients/customers/patients and find solutions; this is what successful business owners do. Years ago a company called RadioShack, which was founded in 1921, was a leader in American electronics. Unfortunately, by 2015 they had to file for bankruptcy due to a shift in more electronic sales happening online and for taking a loan that they were not able to pay. RadioShack could have done a better job analyzing their sales if they had a system in place that showed the change in purchasing behavior, moreover they would have had more data to understand the feasibility of paying back the loan. Your accounting systems need to remain relevant and you must continuously evaluate them. Regular assessments will enable you to identify upcoming trends than can affect your company.
Do not be afraid to try new accounting software, apps, or automation. These systems can help improve your products, increase your capabilities, and gauge your performance. We know you already have many things to take care of in your business, allow us to take on the accounting responsibilities of your business. At CPA by Choice we can help you prepare for the future of accounting, feel free to call us or send us a message.