Expert Roundup – Top Accounting Industry Trends in 2020

The accounting industry is transforming much like every other industry today. The latest trends, such as –

• Cloud offers great opportunities for online collaboration.
• Big data provides more in-depth insights and analysis of the application and data.
• Artificial Intelligence brings automation to the table.
• Machine learning has made manual tasks much more manageable.

Staying up to date with the latest technological progressions in the accounting industry will help your CPA firm keep up with top competitors and prosper long into the future.

Ace Cloud Hosting, has reached out to five industry experts to get their thoughts on trends that will dominate the accounting industry in 2020 and their future implications.

1. Mike Milan

Mike is one of the highest-rated instructors in the nation on the topic of financial management for small business owners. He has built or helped build multiple companies from the ground up by transforming ideas into multi-million dollar enterprises.

Clear Path To Cash is based on the belief that every business owner can fulfill their dreams by understanding and acting on the financial issues they encounter every day.  Ultimately, business owners can make more money and build a lifestyle-friendly business where they get more time for themselves. He is passionate about helping business owners focus on what matters most in their business – Cash.

You can follow him on Twitter and LinkedIn.

Industries are always evolving and looking for new ways to delight customers while increasing their customer lifetime value.  The accounting industries are already shifting their focus from short term project-based interactions to more fruitful long-term customer relationships.  The latest trend is offering more advisory services.  Here are three things I see happening and expanding.

a) The accounting firm as a brand: Client buying behavior is consistent across industries, meaning a great online presence is your first impression. This is requiring firms to invest more to create a strong online brand presence to attract new clients.

b) Defining a client migration strategy: Not all clients are created equal, so accountants will spend more time with those clients that move up the value chain in terms of buying additional services.

c) An increase in financial education: The biggest obstacle in expanding advisory services is the lack of confidence in financial analysis. Accountants and their clients will find ways to learn more about how to view their businesses through the eyes of the financial statements.

2. Jasen Stine

Jasen has been in the tax and accounting industry for over 20 years and is responsible for setting training and education strategies at Intuit. He is a thought leader, writer, and speaker on the 4th industrial revolution and AI’s impact on the profession.

He is a published author in AccountingToday and Intuit’s Tax Pro Center. He also recently implemented Natural Language Processing technology in Intuit’s educational programs that are currently pending patent. Feel free to connect with Jasen via LinkedIn or Twitter.

a) Automation and workflow efficiency have been leading trends for quite some time now. And we will see an acceleration of innovation around this in the coming years, especially 2020.

b) Integrations will allow for increased productivity, enabling accounting and tax firms to automate their compliance work and spend more meaningful time with clients to help them reach their goals. This will result in firms needing to evaluate and assess staff skills to invest in the technology to enable speed as well as evolve their services to Advisory. 

3. Randy Johnston

Randy is one of the partners at K2 Enterprises. In his role at K2 Enterprises, Randy helps to create and deliver technology-focused training to business professionals throughout North America. You can find him on Twitter and LinkedIn.

This year of 2020 was a trend breaker, with so many professionals forced to work remotely from COVID-19 stay at home orders (Will Coronavirus Make Working from Home the New Norm?). While we expected emerging technology like artificial intelligence (AI) or machine learning (ML) to dominate the technology adoptions this year, business disruptions have changed our minds.

This “new normal” makes us focus on the probable trends for 2020, which include: security issues, advisory services, and compliance services.

Remote work has placed new emphasis on security, with fraudulent schemes on the rise. Possible business failures and fundamental need for assistance have driven many firms into the advisory role helping with cash flow, bank financing, and other business survival needs. In response to the crisis, compliance regulations for tax and audit change each day. What are the best actions to respond to these needs?

Don’t let your guard down on security:

1) Use multi-factor authentication.

2) Mandate encryption on local drives and for email.

3) Monitor firewalls and update their security services frequently and at least weekly.

4) Update anti-virus and other malware services daily.

5) Maintain strong levels of spam control on your email services.

6) Ask if your IT provider is running multiple levels of security protection.

Recommended Reading:

• How important is data security? This accounting firm was hacked
• Security Toolkit: Data Protection Best Practices for CPA Firms

Consider your client’s needs for advisory services:

1) Cash flow planning and management

2) Bank debt renegotiation

3) Tax planning

4) Fringe benefit analysis

5) Personnel management including furloughs and other crisis support

6) Executive coaching

Recommended Reading:

• Does Your Firm Have a Clear Vision on Advisory Services?
• How to Protect Client Financials During the Covid Pandemic

Extraordinary compliance services:

1) Tax deadlines have been adjusted in many jurisdictions

2) Special tax incentives are available

3) Mandated audit deadlines have been deferred

4) Special forms that are new to clients need to be completed

5) Routine tax and accounting work will continue to exist, except in the case of business closures

Recommended Reading: 

• Families First Coronavirus Response Act – HR 6201 Leave and Credits
• Help Businesses And Families Now – COVID-19 Responses

While this vision of 2020 is quite different because of the “new normal,” you should create a plan and work it.

4. Gary DeHart

Gary DeHart has worked in media for more than 25 years and has been instrumental in developing new revenue streams and business opportunities for the companies he has worked for.

Prior to launching Insightful Accountant (formerly Intuitive Accountant), Gary was the Associate Publisher of Accounting Today. In addition to being the Publisher and Managing Partner of Insightful Accountant, Gary works with select clients within the accounting market on channel development and growth.

He is an Assistant Scoutmaster with the Boy Scouts of America, enjoys fly fishing, time on the beach, cooking on the Big Green Egg, and spending time with his family. You can find him on Twitter and LinkedIn.

I believe we’ll continue to see increased competition for QuickBooks, especially for the mid to large user segment, while QBO continues to gobble up the small market.

General Ledger developers are acquiring more of the key solutions in the ecosystems that surround them.

Increased pressure on small accounting firms to provide more comprehensive services for their clients – Advisory Services, Client Accounting Services, Outsourced Back Office. While it seems like a threat to small firms, it is a HUGE opportunity for firms that can develop the right service model to take care of their clients.

5. Cyrus Vanover

Cyrus Vanover, MBA, is a financial copywriter who has written for companies of all sizes. He is also the author of the personal finance book, “Earn A Debt-Free College Degree.” His goal is to help families save money, make more money, and achieve financial independence. In addition to that, he runs a personal finance blog called Frugal Budgeter.

Based in the mountains of Virginia, he enjoys hiking the local trails, listening to 80s music, and reading books on military history in his spare time. You can find him on LinkedIn.

1) Increased adoption of cloud accounting software

2) Increased use of a remote accounting workforce

3) Increased emphasis on data security

With the world currently embraced in the coronavirus pandemic, many employers are telling their workforce to stay home and do their work remotely. This trend will result in increased adoption of cloud accounting software, allowing accountants to access information and work from anywhere.

Because of this, many employers and employees will come to the realization that it isn’t always necessary to come to the office. Many tasks can be done remotely. When the pandemic is over, a permanent shift in the accounting workforce will occur where many accountants continue to work remotely.

This will also result in an increased need for data security to prevent hackers from breaching firewalls and stealing client data. Passwords will be replaced with physical security keys as Google is already using.

Takeaway

Technology is advancing, and successful accounting firms are adapting to the change. As we progress further into the fiscal year 2020, it is vital to train your team about the latest technological progressions and leverage them to keep your accounting and financial processes productive and reliable.