Accounting Trends For 2021

An essential aspect of any organization is perhaps the cash that comes in and the cash that goes out every single day. That is why accounting, though overlooked most of the time, is one of the most important processes when running a business. That makes accountants one of the most indispensable assets of a company. For that reason, accountants need to be aware of the latest accounting trends.

Accountants and bookkeepers constantly have the future on their minds. Clients demand more from the profession, plus the competition is as stiff as ever.

Meanwhile, business owners also need to be up-to-date with the latest accounting trends so they can navigate through this challenging year. The good news is that accounting firms are in a prime position to assist organizations in utilizing the best strategies to survive the pandemic’s effects.

The most significant trend in the accounting industry experts see is the rise of outsourced accounting services.

I. Accounting outsourcing services’ impact on small companies

A recent survey conducted jointly by Bill.com and CPA.com asked 1,700 business owners who outsource accounting services on how their businesses benefit from it. 

What they found out exhibits the potential of the kind of impact outsourcing companies can have for small companies, especially those who were seriously affected by the pandemic.

1. Saves them time

Eighty percent of those who were asked said that outsourcing their accounting saves them more time, allowing them to focus on their business more.

2. Accounting becomes simpler

Sixty-eight percent reported that the best practices implemented by accounting firms truly helped them a lot and made their accounting much more manageable.

3. Increased profits

Twenty-eight percent said the advice they received from their outsourced accountants and following them resulted in increased profits.

II. How can outsourced accounting help businesses

1. Help in managing your cash flow

An accounting firm will be able to see the operating costs, overhead, assets, liabilities, sales, inventory, and the cost of labor. By monitoring recurring expenses and estimated income while factoring in KPI thresholds and scenario planning for the forthcoming months and year, they will establish rolling financial forecasts and establish spending limits on less important items.

2. Help in managing your Paycheck Protection Payment (PPP) loans

For the average person, the details of loan forgiveness under the Paycheck Protection Payment can be confusing at times. In addition, there is the possibility of having your loan forgiven partially. Due to their experience, accounting firms are experts in handling PPP loan terms and can help you in dealing with them.

3. Help in getting your tax strategy in order

You would not want to miss out on important tax credits, especially those related to COVID-19. The Families First Coronavirus Response Act gives businesses tax credits to pay for certain costs of providing employees with paid COVID-related sick leaves.

Companies are also under pressure to make sure their taxes are foolproof due to stricter regulations on account balances, tax disclosures, and close cycles. If somehow you do not have a tax advisor, you might not be able to take advantage of all the different tax benefits available to you.

4. You can save time and money

Your business strategy needs your complete attention, especially at this time of uncertainty. Leaving your accounting to the more capable hands of an accounting firm will give you more free time for other important things. You also would not have to hire, train, and maintain an in-house accounting team, saving you more money in the process.

5. Help in revamping your process and procedures

Like manual data entry and using spreadsheets, the old-school way of accounting is a thing of the past. Accounting firms now use modern software to ensure that your records are accurate. 

III. More accounting trends for 2021

Aside from outsourcing, other trends in the industry include social media, skill refining, and big data.

1. Social media

Many industries now use social media platforms like Facebook, Twitter, and LinkedIn. Accounting firms are no different. In fact, those who are not on social media are missing out on a potent communication tool they can use to connect with clients. 

As a business owner, you want to know what your accounting firm is up to, and you can get updates about them by simply visiting their social media sites.

2. Skill refining

Accounting firms will continue to invest in their accountants and bookkeepers by providing them with relevant training. You are assured your outsourced accountants are up to date with the latest technology as accounting firms turn to automation.

3. Big data

As the technology used for data entry and record-keeping becomes more robust, business owners increasingly require their accountants to provide better value through predictive analysis.

Big data offers businesses a variety of information as well as analytical tools that can improve decision-making. The transformation in how data is used has changed accountancy into a role that uses advanced analytics for assistance with subsequent key decisions.

IV. Key takeaway

Some of the significant accounting trends to watch out for in 2021 include outsourcing, social media, skill refining, and big data.

Accounting is constantly changing and growing. Outsourcing your accounting and bookkeeping is necessary if you want your organization to stay on top of developing accounting trends.