Automated, adaptive and intelligent technologies are infiltrating our lives at a rapid pace, and they are also redefining the landscape of accounting and financial services. As this pace continues to accelerate, Cloud Accounting is becoming more commonplace, but how does this digital capability affect how financial services are offered? To learn more, read on.
What is Cloud Accounting?
Cloud accounting simply means being able to store, access and edit your accounting data (and bookkeeping data) ‘in the cloud’ – over the internet – instead of relying on a physical hard drive/computer or other data storage device like a USB. Cloud accounting has revolutionized the financial sector, with the benefits including:
- Flexibility – When everything is in the cloud, you can access your data wherever you are and whenever you choose. This also allows for real-time analysis and informed decision-making wherever and whenever it is called for.
- Automation – Accounting and bookkeeping processes that were traditionally manual tasks can be automated using cloud accounting. This saves time, increases efficiency and boosts productivity when it comes to freeing up time for other business growing focus.
- Accuracy – This flexibility allows accountants and bookkeepers to upload their data in real-time which keeps important information up-to-date, allowing for easy access to accurate data for important analysis and decision-making.
- Scalability – The flexibility and efficiency of cloud accounting enables individuals and firms to scale to meet the growing demands of their business.
The Rise of Combined Services
In the past, accountants primarily charged for their work by the hours clocked, but this is changing fast. Currently, many bookkeepers and accountants are shifting to fixed prices and are basing their rates on the value they offer.
With so many trends towards outsourcing (and/or offshoring) accounting tasks, the current system allows for considerable margins, given the relatively low costs involved with delivering these services. Despite this, accountants often still charge traditional or inflated rates. It will only be a matter of time before this bubble bursts and client demands create the need for a business model overhaul. More than ever before, clients want and expect convenience, and many accounting companies are offering combined service packages to include accounting, compliance and advisory-based work under the same fee.
Specializing to Remain Competitive
Not so long ago, accounting firms and sole trader accountants and bookkeepers all relied on local, word-of-mouth trade. Businesses would turn to their local accountancy firm, based on proximity and direct recommendation from associates, family and friends. These days, however, the limitless reach of the internet and advancing technologies places everyone is in competition with everyone else no matter where they are physically based.
This new ultra-competitive landscape has led to people thinking more outside the box in terms of how they can remain relevant and competitive. As new technologies and the eCommerce boom have taken over, more and more niche income avenues have developed leading to more opportunities for the services that support them.
As with many sectors, one of the best ways to stand out in the modern world is to specialize in a niche service, such as bookkeeping for eCommerce for example. Innovative accounting firm, Accounts and Legal, states, “Accountancy firms and sole traders in financial services can no longer rely on competing solely on location or price – they are quickly learning that drilling down upon a speciality area helps to keep them visible and have their expertise sought after.”
The Protective Capacity of Blockchain
Blockchain has become synonymous with the popularity of the digital currency, bitcoin. Blockchain technology itself, however, is a computer-based system that records data using cryptocurrency.
The possibilities for blockchain to enhance accountancy practices lies in its potential to create a new accounting ledger model – one that can be updated, edited and verified continuously without the concern of it being corrupted or in any way altered. The advances in blockchain technology are sure to grab the attention of more and more financial services professionals.
Accountants Will Always be Needed
Such rapid technological advancements invite the question as to whether humans in the sector will become obsolete. Yet, demand for accountants is on the rise, with a projected growth of 4% by 2029, according to the US Bureau of Labor Statistics.
Despite the level of automation, many believe that professionals in the accounting sector will never be replaceable. According to their report, no matter how sophisticated technology becomes, it still cannot solve the complex issues that accountants’ clients face.
There is no escaping the fact that accounting and financial services have changed considerably and rapidly, and this is primarily due to the emergence of intelligent (AI) technologies. There’s certainly no fighting it – at this stage, it’s a matter of adapt or bow out.
In the imminent future, successfully working in accounting and financial services will be subject to evolving with industry technologies and trends. It’s vital for financial sector professionals to keep up – but so long as they do, the future of accountancy work should be in no jeopardy.