Embracing the future of accounting: Key trends and technological advances

/ Posted By - Bradleys Accountants / Categories - Taxation

Technology is taking the accounting industry by storm – things already work very differently than they used to ten years ago. Getting the hang of these trends can be overwhelming, and we would not blame you for missing the good old days when all you needed was a ledger to fill your transactions out by hand.

However, the sooner you embrace these new trends in accounting, the better you can reap the benefits of higher accuracy, scalability and service diversification.

Your accountant can help you understand them in depth – and if you have not hired an accountant yet, consider working with the expert team at Bradleys! In this piece, we give you a quick overview of the trends that will define the future of accounting and finance in the coming years.

1. Leveraging forward-looking accounting with predictive maintenance

We live in an uncertain world. The last three years alone have seen wars and a pandemic that disrupted global business processes, in some cases permanently. Businesses need to know how to stay financially healthy amidst these storms, so there is an increasing preference for accountants who can offer predictive services.

Predictive accounting involves analysing data to devise more robust business models and better selling methods to withstand market volatility.

Your accountant can assist in building strategies for improved financial health, identifying cost-saving measures, optimising operations, and exploring new avenues for growth.

In other words, your business will have to invest in more than just bookkeeping and tax returns and shift the focus from reactive measures to proactive strategies and enhance your resilience against disruptions. That is what the future of accounting holds.

2. Unlocking efficiency with accelerated cloud adoption

Cloud migration was viewed with scepticism before the pandemic, but no more. Businesses of all sizes are rushing to leverage the benefits of “anytime, anywhere” efficiency, including in the accounting department.

Cloud is not one of the emerging trends in accounting anymore but the present. Therefore, by moving your accounting systems and data to the cloud, you can access your financial information on the go and in real time using various devices.

This flexibility is especially valuable in today’s remote work environment, where your staff can work from different locations. Cloud platforms often provide scalability, allowing you to easily adjust your computing resources based on your needs.

This scalability is particularly relevant during peak periods, such as tax seasons or month-end closing processes when there is a higher demand for processing power.

In this scenario, your accountant can be called upon to advise you on which cloud platform to pick and how to best use it to meet your business goals.

They can evaluate different options for you, considering factors such as security, reliability, integration capabilities, and cost-effectiveness. They can also guide you on best utilising cloud technology to streamline your accounting processes and ensure data privacy and compliance.

3. Doing sustainable reporting with the UK’s SECR framework

The need for carbon disclosure is gaining international attention as countries like Belgium, Canada, Chile, France, Japan, New Zealand, Sweden, and the UK require financial disclosures aligned with the Task Force on Climate-Related Financial Disclosure (TCFD).

The Streamlined Energy and Carbon Reporting (SECR) framework has been implemented in the UK to address this requirement. SECR focuses on greenhouse gas emissions, energy efficiency efforts, and intensity ratios. The framework aims to promote transparency for stakeholders, encourage cost savings, and drive emission reductions.

Large organisations in the UK, including quoted and large unquoted companies and large Limited Liability Partnerships (LLPs), are mandated to comply with SECR. Quoted companies must report annual global emissions, intensity ratios, previous year’s energy use and GHG emissions, methodologies used, and information about energy efficiency actions.

Unquoted companies have similar reporting obligations, including UK energy use, associated greenhouse gas emissions, intensity ratios, and information about energy efficiency actions. Companies falling under SECR legislation must include energy and carbon information in their Directors’ Report as part of their annual filing obligations.

If that is the case with you, your accountant will need to assist you in adjusting your accounting and reporting processes. This may involve implementing new systems and procedures to track and report on green energy usage, carbon emissions, and other environmental indicators.

It will be necessary to accurately measure and disclose this information to demonstrate compliance and support sustainable business practices.

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    4. Optimising cash flow with digital supply chain financing solutions

    This emerging trend meets the credit needs of small and medium-sized businesses that may not be able to afford loans from traditional banks. Digital financing solutions allow these businesses to access cash as and when they need it without demanding collateral.

    If you are in a similar boat, your accountant can assist you in managing your cash flow effectively. They can help optimise payment terms, evaluate the impact of early payment discounts, and advise on cash flow projections. They also monitor the financial impact of supply chain financing on working capital and provide recommendations for managing cash flow gaps.

    Moreover, accountants ensure compliance with accounting standards, regulations, and reporting requirements.

    They help you maintain accurate financial records and prepare the necessary documentation for supply chain financing transactions. This ensures transparency and facilitates the smooth operation of digital financing solutions.

    Your accountant can collaborate with IT professionals to integrate digital supply chain financing platforms with accounting systems. This integration streamlines financial processes, enhances data accuracy, and provides real-time transaction visibility. They can also contribute to system implementation and provide ongoing support and analysis.

    5. Simplifying customer tax reporting through seamless digital onboarding

    Businesses must report customer tax data whenever they open a bank account with the business or enter a financial relationship with them (such as an influencer signing on for paid product promotions). Your accountant can help you set up digital onboarding processes that capture and validate customer information in real-time.

    This cuts down the time spent on onboarding, helps you access your product/experience quicker and ensures high degrees of accuracy when reporting. Moreover, options exist to integrate the onboarding portal with the existing CRM to give it the same branding and user interface, thus boosting the customer experience.

    6. Harnessing the power of AI, automation, and blockchain in accounting

    Unlike anything we have ever seen, many new and evolving technologies will change accounting. For example, AI-powered chatbots provide efficient and accurate responses to tax queries, improving customer service and support. Quantum computing enhances data processing capabilities, enabling more sophisticated financial modelling and risk assessment.

    On the other hand, APIs facilitate seamless data integration between accounting software and other systems, streamlining processes and enhancing accuracy. Blockchain technology ensures secure and transparent record-keeping, improving trust and auditability. Web3 technologies, like DeFi platforms and smart contracts, enable automated and transparent financial processes.

    Your accountants can help you in the following:

    • Evaluate and implement AI-powered solutions for tax queries and customer support
    • Utilise quantum computing for advanced financial modelling and risk assessment.
    • Leverage APIs for seamless data integration between accounting software and other systems.
    • Embrace blockchain for secure and transparent record-keeping.
    • Improve accuracy, enhance financial reporting, and provide valuable insights.

    Over to you

    If all of this sounds confusing and you do not have a reliable accountant to guide you, do not worry – that is what Bradleys Accountants are here for. We pride ourselves on staying up-to-date and conversant with the latest trends and technologies so our clients can ride the wave of progress before anyone else.

    Depending on your goals, capacities and growth potential, we will help you select the best and most cost-efficient tools and do all the operations for you so that you can focus on managing your business. The time to invest in the future of accounting and finance is now – get in touch with Bradleys Accountants to learn more.

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