2016, the year it all changed.
Well, not exactly, but it was quite a year for technology developments in the SME market. Many industries are being shaped by the rapid adoption of Software as a Service (SaaS) and cloud subscription platforms. In particular, the accounting industry is being completely revamped with the shiny and new perks of SaaS.
If you aren’t already aware, cloud-based accounting has recently taken the accounting SME market by storm and this is why it matters.
As accounting SaaS subscriptions become more accessible for small businesses, they are being adopted at an exponential rate. Intuit saw 41% increase in their Quickbooks online subscriptions over the course of 2016, trailing Xero, who saw a 51% increase in their subscribed clientele. So, what does this mean for the industry as a whole?
For starters, improvements in automation. With integrated cloud-accounting programs, many organizations are capitalizing on the automation of data collection, entry, processing, etc. There is even movement on automating audit evidence collection and analysis, simplifying the entire audit process. These changes will impact many service offerings of accounting firms and open doors for new and improved offerings by accounting professionals.
We will only be seeing more improvements in accounting automation as the technology evolves, so it is vital for accounting firms to adapt to these trends if they want to stay relevant.
These technology trends in the accounting industry are an introduction to a new style of accounting: DIY.
Since cloud-accounting platforms are now extremely accessible, affordable, automated, etc. many companies no longer require outsourced accounting. Part of staying relevant for outsourced accounting firms will be reliant on proactive and forward-thinking services. Client retention will be critical as these SaaS and automation technologies develop.
With 2016 having established itself as the year of change, 2017 will mark the beginning of awareness and preparedness for Blockchain Technology, which plans to revolutionize the accounting world. To quote Louise Penny, “Life is change. If you aren’t growing and evolving, you’re standing still, and the rest of the world is surging ahead.”
On the horizon: Blockchain technology
Although blockchain technology is still in early stages of development, there are high expectations of its future capabilities. Also known as “distributed ledger technology”, this platform allows for transactions to be recorded in a shared-ledger between multiple organizations. This removes the massive inefficiencies of documenting all transactions in a privately managed database, and opens all activities to be handled automated in the shared-ledger. Here are some features that we can expect soon:
- Ledgers on both sides of the transaction are recorded simultaneously in a shared ledger
- Transaction authentication
- Traceable financial transactions
- Traceable audit trails
- Tracking ownership of assets
- Automatic invoice generation
- Automatic invoice payment