Top Technology Trends in Accounting and Finance in 2021

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The year 2020 was unlike what experts predicted as the novel coronavirus upended many practices and changed business functioning massively. Companies were already using technology to perform their tasks. However, their reliance on technology increased significantly when many governments administered lockdowns to combat the spread of the virus. Accounting and finance have evolved over the years as the technological progression has made many tasks straightforward and enabled accountants to process humongous calculations with ease. Although the virus still lingers in 2021, the world has reopened; albeit with some new rules in place. Many technological trends in accounting and finance that emerged in 2020 are still part of the field.

In 2021, accounting and finance professionals will continue to use technological tools to predict, analyze, and assist firms in designing better strategies concerning their financial matters. Due to the change in marketing demands, clients’ requirements, and generation transformation, a cultural shift is visible in the accounting world. Moreover, the pandemic resulted in a change in the work environment, leading accounting and finance leaders to discover new strengths in using technological tools for financial processes. Experts say that the accounting and finance trends in 2021 will continue to revolve around technology.

Some of the trends in accounting and finances in 2021 and beyond are as follows:

1. Cloud-Based Accounting

Plenty of firms shifted their working to work-from-home mode as governments administered lockdowns. They discovered different technical tools to resume working. Since cloud computing offers many advantages, many firms choose to continue working with cloud-based accounting. Although initially, some companies were reluctant to invest in it, they realized that its enlarged accessibility makes the investments worth it. Experts say that cloud-based accounting will be a significant component of the future of accounting as it enables accountants to work remotely and access files from any location.

2. Data Analytics and Forecasting Tools

Data has become a buzzword in modern-day business functioning as it has transformed business operations massively. Finance professionals derive insights from data analysis and use these bits of information to plan budgets and devise financial strategies. Besides, data analytics helps accountants and finance professionals in identifying patterns and predict the future. Data analytics enable business leaders to make more informed decisions with the help of finance and accounting people. Accountants are now wearing another cap of accounting consultants. Their additional responsibility requires them to possess technical skills and a strong focus on data analysis. These professionals can determine weak areas through data analysis and work on them to improve business efficiency. Data analytics has become an integral aspect of accounting and finance in the present age.

3. Specialized Software

All businesses’ needs are different, so not all practices apply to all companies. Software platforms have brought ease to business professionals as they have optimized the processes. Accounting and finance professionals are already using software for their operations, and their demands will only increase with time. Customized accounting software help accountants perform their tasks as per their preference and ease. Accountants and finance people are devising new ways of maximizing efficiency through software solutions. The key is to identify firms’ needs and resources and have specialized accounting software to make the most of it. In some cases, amateur accountants and finance people may invest in software solutions that do not align with their needs, thus, waste companies’ money.

4. Cybersecurity

Technology progression has many pros, but it has also brought different risks to the forefront. Criminals have devised new ways of stealing data and use it for their benefit. Cybersecurity has become the need of time as criminals’ main target is accounting and finance processes. Phishing emails, malware, viruses, malware, and data leakage are ways of extorting cybercriminals’ money.

Remote working has compelled accountants and finance professionals to put their data on the cloud, an easy target of cybercriminals. Accountants and finance teams should pinpoint critical areas and apply strong security measures to keep their processes secure. Cybersecurity protocols can benefit organizations’ finance and accounting processes significantly.

5. Use of Artificial Intelligence

Artificial Intelligence has changed many business practices, and experts say it will transform the accounting and finance operations in upcoming years. Firms are integrating AI to automate regular and repeatable tasks, enabling accountants to shift their concertation on other critical matters. AI helps in capturing information on the payable amount, terminal or renewal options, and commencement date. AI automates processes and allows finance professionals to focus on the task at hand and enhance their productivity. Integration of AI can help finance and accounting professionals lower costs of operations, perform functions with high precision, resulting in improved productivity. AI can also optimize administrative tasks, accounting and finance processes and enable business leaders to make better decisions.

6. Outsourcing Accounting and Finance Functions

Another emerging trend is outsourcing business functions. It let companies shift their focus on more critical tasks that they can perform efficiently in limited resources. Outsourcing finance and accounting processes save business costs on payroll, taxation, employees’ training expenses, and salaries. Companies no longer have to micromanage accounting and finance processes. The secret is to pick efficient accountants and finance professionals who can understand businesses’ needs and perform their processes accordingly.

Conclusion

Accounting and finance practices continue to change, but the year 2020 brought many significant changes to the forefront. Technology played a crucial role in keeping firms operational. Many companies turned to technical tools to have a smooth run. Modern-day finance professionals and accountants need analytical skills and academic knowledge of finance and accountancy, but technology literacy is of utmost importance. Accountants understand that they are amidst the significant change as companies heavily rely on technical tools, and there is a demographic shift. Accounting and finance trends help extend business. Experts predict that in 2021, technology will have a significant contribution in the accounting and finance field.