The cloud and 'real-time' accounting
'Technology has a transformational quality - the PC was amazing, the internet was amazing, but in my view that was a preamble to what's happening now, with the real revolution off the back of cloud and new devices,' says Gary Turner, Xero's UK MD.
Arguably, 'the cloud' is the technological advancement having the biggest impact on accounting. Traditionally, software has been installed on individual computers, while data and reports were stored on hard drives and emailed to colleagues and clients. Cloud software, and all the results it produces, is housed on the cloud, making it more easily sharable within an organisation; it also makes it more affordable for a wider variety of businesses.
The 'real-time' aspect of using cloud-based accounting software means, for example, that an accountant can give a client up-to-the-minute financial information about their business with just a few clicks of a mouse. Even further, this functionality is being offered directly to the client, who can view live business data from a dedicated dashboard.
'Real-time accounting is not just happening - it's something that I'm promoting, trying to get clients to monitor their finances as a real-time business, as opposed to a traditional shoe-box accounting approach, where we churn out accounts for compliance-sake,' says Rudy Chen FCCA, founder and director of Yes Accountants, which uses IRIS cloud accounting software.
Automation and integration
Andrew Marder of software comparison company Capterra highlights two big trends in accounting - automation and integration.
'Automation is the flashier of the two, with data spending less and less time in the hands of software users and more time in the digital pipeline,' he says. 'Companies like HubDoc and Receipt Bank are using optical character recognition (OCR) to turn images and other unsorted information into usable accounting data.'
This would allow, for example, an accountant to take a photo of a receipt they want to submit for tax purposes on their mobile and upload it to Receipt Bank or HubDoc, where it would be converted into data you can then use in other software.
'This has happened in tandem with the integration side of things,' continues Marder. 'As more third-party developers are moving into the space, more core accounting systems - Sage, QuickBooks, FreshBooks etc - are embracing the add-on community.'
As a result, data is flowing more easily between accounting systems and support technology. 'The big accounting tech firms have realised that the more they allow third-party developers into their circle, the more raw power they can harness. Barcode support, detailed inventory management, payroll management and mobile payment apps are now all supported by most major systems. These apps vastly increase the value of the core product.'
Diversification - the end of shoebox accounting?
Cloud, integration and automation are so progressive that they're forcing accountants to rethink their traditional role and working methods. 'Shoebox accounting' refers to the notion that, once a year, a business owner hands their accountant a shoebox filled with receipts, invoices and whatever else they think needs to be submitted for tax purposes, leaving the mess for the accountant to sort out.
Given the new technology mentioned above means people can input data in real-time more effectively into cloud-based software, there is less need for the traditional accounting service. Not that accountants are no longer needed for tax and financial reporting, but considering software is providing more efficient ways of doing this - as is cheaper overseas, outsourced accounting services - accountants are being increasingly called upon by clients and management teams to offer more value, in the form of better customer service, business strategy advice or tax planning, among other things.
Social media marketing
In line with this need to diversify is the importance of social media in being able to reach new clients, share expertise, learn about client industries and market new services. Spending time maintaining a Twitter account, Facebook page and LinkedIn profile appeals to the younger generations of entrepreneurs and clients. A social media presence in itself can signify a contemporary, forward-thinking firm; a well-managed presence can deliver new clients, maintain old ones and develop communications across a specialised network.