Accountants have many exciting trends to anticipate in 2019, many having to do with technology. After all, technology is playing an increasing role in the business world. Far from displacing accounting professionals, these tools will simplify everyday tasks, allowing accountants to better use their time and knowledge for more in-depth work.
By allowing computers to take over some of activities like payroll processing, accountants can utilize their keen analytical skills to harness big data. This can help them take fresh approaches to larger business problems and advise their clients in ways that were previously impossible.
For students considering a Master of Science degree in Accounting, understanding and adapting to important trends in the industry is key. Here are some key points to understand about accounting in 2019:
- Big data is transforming the scope of information available for analysis, making IT-minded professionals more valuable.
- Small businesses are creating a market for client accounting services and cash flow consulting.
- New tax laws and compliance considerations are generating specialized opportunities for those who are familiar with these fields.
The Changing Scope of the Modern Accountant
Though automation, artificial intelligence, and software use are on the rise in the accounting industry, the role of the human accountant is as important as ever. According to the U.S. Bureau of Labor Statistics, employment for accountants and auditors is on the rise with no signs of slowing, despite the fact that routine accounting tasks are slated to become automated. The human touch is still essential.
Another factor contributing to the growth of employment opportunities is the globalization of business. This combined with the growing economy will create new openings for accountants who are prepared to offer products and services that are in line with the latest trends.
With the latest tools in hand, accounting professionals must next turn their focus to offering the right products and services to an evolving customer base. This includes addressing changing tax laws, learning to utilize big data, providing client accounting services, and entering the area of cash flow accounting.
Top Trends Accountants Must Know About
Properly anticipating the shape of the accounting industry through 2019 will equip accountants and potential accountants for success in this exciting area. Professionals should make sure they’re aware of these trends this year:
Data Is Increasingly Valuable
Big data is transforming the quality of audits. In the Journal of Accountancy, Jeff Drew says, “The need to collect, organize, and mine data for business insights — all in real time — will present the accounting profession with unprecedented challenges and opportunities in a rapidly approaching, radically different future.” Equipped with more information and a greater capacity to analyze data accurately, auditors are now able to all but eliminate data sampling, instead providing accurate information that includes outliers and exceptions.
Real-time data makes it possible to generate accurate and up-to-date market reports. With these reports, performance benchmarks are easier to identify. The wealth of information that’s available to the modern accountant allows him or her to simultaneously monitor the big picture and niche trends. This offers rich insights for educated decision-making regarding all aspects of accounting.
Cash Flow Consulting Is on the Rise
Cash flow accounting will likely become a sought-after service in 2019 and beyond. This is especially true for the 30.2 million small businesses in the United States. Half of small businesses fail by the fifth year, often due to poor cash flow management. Forbes contributor Elaine Pofeldt advises that “There is really only one way to address cash-flow crunches, and it’s planning so you can prevent them in advance.”
Thus, accounting firms that shift their focus to include cash flow consulting will position themselves to fill a critical need. Giving small businesses more accurate information on their cash flow potential can help these companies to weather the volatility that’s inherent in many industries.
Client Accounting Services Is Growing
Client accounting services (CAS) is one of the top areas for anticipated growth in 2019. Currently, 42 percent of accounting firms offer this service, but another 15 percent plan to add CAS to their offerings this year. Client accounting services is a broad area that can include many different offerings. There are typically three tiers of CAS.
At the lowest level, CAS includes a write-up of financial transactions that are provided after the fact. The client issues invoices, writes checks, and collects receipts independently. The accounting firm then comes in to transfer this information to a general ledger and create a financial statement for the business.
Clients who want a greater level of involvement with their CAS may hand over invoicing and payment processing to the accounting firm as well. In this arrangement, the firm is responsible for issuing employee payments, taking care of taxes, cutting checks, and more.
At the highest level, CAS is essentially an outsourced chief financial officer. The accounting firm takes over all financial activities for the client and assists upper management with key financial decision-making. In this arrangement, a CPA within the firm will take on primary management of the client’s account. This individual meets regularly with the client’s management team, offering strategic insights and information that will help guide business decisions moving forward.
There’s Greater Emphasis on Compliance
Compliance is a key concern for today’s businesses. With emerging cybersecurity threats, data protection issues, privacy rules, and changing tax laws, companies can easily dedicate an entire team to ensuring that business activities are compliant. Compliance professionals are a new breed. While they may find a home within nearly any business, they are particularly important in accounting firms.
Accountants with a background in law or an in-depth understanding of compliance issues may find opportunities to forge into this specialty. Aaron Karczmer, chief risk, compliance, and security officer for PayPal, explains the evolving role, saying, “Managing regulatory risk used to be reactive and advisory, and that led to the lawyer as compliance officer. Now, reflecting the rise of the compliance officer, it is more holistic, data-driven, and programmatic.”
Automation Is Streamlining Key Activities
Through 2019, accountants can expect to see a rapid increase in automation. According to Forbes, payroll, banking, audits, and tax preparation will be fully automated by 2020. Using an Accounting Automation Index to evaluate the accuracy of AI engines to correctly handle transactions from bank feeds, it was found that OneUp achieved an Automation Index rate of 95 percent, while QuickBooks Online ranked 77 percent.
Rather than taking the place of accountants, automation is expected to enhance the role of the accountant. Human professionals can use these tools to enhance their productivity so they can provide clients with a greater range of services.
Tax Laws Are Changing
Keeping up with tax reform is one of the top issues facing accounting firms in 2019. Among small firms, 54 percent list this as one of the biggest challenges for the year ahead. The same is true for 52 percent of midsize firms and 40 percent of large firms. This is the most commonly identified issue for all but large firms, where recruiting and training new employees takes the top spot for 2019 challenges.
Nearly a quarter of accountants expect tax time to be worse in 2019 than the year prior. This is double the 12 percent of accountants who expected 2018 to be worse than 2017. A whopping 47 percent of large accounting firms plan to have employees working on Saturdays through tax season. This weekend commitment is anticipated for just 35 percent of midsize firms and 28 percent of small firms.
Staying on top of the new tax laws will help accountants prepare for the potential challenges ahead. Though hours may be long through the season, those who are properly prepared can weather it.
Accountants who are interested in furthering their education in the field can do so from the comfort of home with New England College’s online Master of Science in Accounting program. Pursuing web-based coursework allows current professionals to better balance work and education as they work toward a higher degree. As the current trends for the accounting industry indicate, this profession shows no signs of slowing though 2019 and beyond. Current and potential accountants can expect to find many opportunities to flex their skills in this field.