Accounting system of an organization is considered as the backbone of every business, as it plays a very important role in the proper functioning of business activities. The changing dynamics of the business world in recent times makes it necessary for the accounting industry to upgrade itself to meet the requirements of the modern world. After the 2008 financial crisis in the business world, businesses make necessary steps to update and modernize their accounting system. In this article, we will discuss the new trends in the accounting industry and their applications in the businesses that use them.
Cloud-Based Accounting Systems:
The introduction of cloud-based technologies are warmly welcomed by the accounting industry and now it has become an essential part of most of the business organizations. These applications allow their users to access their required data from anywhere they want. This technology has solved many issues related to data security and communication faced by accounting industry in recent times.
Usage of cloud-based accounting applications are increasing day by day and has become a major trend for types of organizations irrespective of their sizes. The main advantages of cloud-based accounting applications are:
- Save a lot of user time by automation of operations
- Allow user to access data in real-time from anywhere through internet
- User-friendly interface and easy to learn
- You do not need to install the software on your system.
- There is no need for an internal server for the storage of financial data.
- There is no worry about data loss due to any loss of the physical asset.
The growing use of accounting applications has become a top trend in medium to large organizations, where a lot of financial data is produced on a daily basis. It becomes very expensive and time consuming for organizations to record and process all the data manually.
These tools and applications provide more accurate data entry, data processing, and data security. Accounting system automation saves a lot of accountant time by eliminating manual calculations and human errors. Now the accountant can manage other things instead of just bookkeeping in the extra time which ultimately beneficial for the business.
The drawback of these applications results in fewer jobs for accountants because due to the easy user interface of these applications, there is no need for deep accounting knowledge to prepare accounting reports. The user can get any system report by just one click.
Benefits of automation are far more than their drawbacks and accountants should learn these skills to move forward in their career.
Increased Out Sourcing:
Among the current trends in the accounting industry, outsourcing of accounting activities is now one of the top trends. Now business entities increasingly outsource their account department to other companies. This facility allows entities to focus more on their core business like manufacturing or promoting their products, while the headache of bookkeeping is transferred to some specialized and professional hands. It also reduces the risk of fraud at the same time.
The cloud-based accounting applications are playing a major role in aspect as there is no need that the accountant should present on the business site.
Changes in Accounting Standards:
International Accounting bodies are working round the clock to update the accounting standards with the new trends in the business. Accountants are also bound to follow certain rules and standards applicable in their work jurisdiction, so accounting professionals need to keep updated with new changes and trends.
After the adoption of cloud technology by the accounting industry, the term “mobile” accountants are created and used by many businesses. As the world is moving towards a paperless environment, it grows the acceptance of electronic documentation in place of paper-based invoicing, voucher and receipts.
You can say that mobile accounting is a just like the outsourcing of account department, but the difference is that your “mobile” accountant is working from some other place and not present physically on the company site.
Know the importance of Data Analytics:
The core business of the accounting department is to record business transactions and organize them in such a way that it becomes useful for decision making. The use of new technologies like artificial intelligence, automation applications, and data centers gather a lot of data on a daily basis, which can be very important for management. Organizations are paying special importance to the analyses of data generated by the accounting department and use them for decision making. The famous applications used for data analyses are:
- Apache Spark
After the 2008 financial crises, the accounting industry focuses on transparency in accounting system much more than ever before. International accounting and auditing bodies give emphasis more on these areas. It is the need of the hour for accountants in the era of accounting irregularities and financial scandals to focus on transparency and objectivity to restore trust and credibility.
In the changing business environment, the accounting industry is shaping towards betterment and enhanced business decision.