The wonderful thing about trends is that they rarely stop on a dime. Instead, they evolve and change over time. Last year at about this time, many were waxing philosophical about what was trending in the world of accounting. The lists were long and diverse. We revisit a few key trends here, with an eye for what they will mean as we move into 2019.
The Promise of the Cloud
In 2010, the Pew Research Center’s Internet & American Life Project released a report stating that 71 percent of technology experts surveyed predicted that by 2020, most of us would be using cloud-based software instead of running software on our computers. In the accounting space, cloud software is definitely gaining traction. According to Forbes, accounting software-as-a-service (SaaS) continues to be more the rule than the exception. Accounting Today cited a Gartner report that said adoption of cloud accounting software among global companies would grow six percent between 2017 and 2020, and that by 2025 fully half of all global companies would have transitioned to cloud-based accounting.
It’s easy to understand the value a cloud-based approach brings to companies large and small. Small Business Trends magazine identified benefits such as flexibility, scalability, collaboration, data management and reporting.
However, it’s important to understand that cloud doesn’t mean the death of PC-based accounting software. That same Forbes article said that, in 2017, about 80 percent of QuickBooks Online users were first-time users of accounting software. They started in the cloud; they didn’t migrate to it. That means a substantial number of PC-based QuickBooks users out there will continue to use the traditional approach.
Automation and Machine Learning
As with the cloud, technological advances in automation and machine learning have been and will continue to be trending. As computers — and software — become more intelligent, they are able to assume some of the more tedious work accountants did in the past. This frees CPAs to move into bigger, more strategic roles for their clients.
Last year, in Accounting Today, Herman Man, a vice president at software developer Xero, said that these technological advances would give accountants the opportunity to serve as consultants and virtual CFOs. Those higher-level services cannot be replaced by a computer or other machine. Therefore, clients would benefit more from the expertise their accountants could bring.
A study published in 2018 in Strategic Finance echoed this, saying that accounting professionals would move away from traditional “number crunching” into more strategic roles. This shift will benefit clients, as the ability to interpret the data requires an expert eye. Plus, by freeing up their time, accountants will be in a better position to advise their clients.
The Cryptocurrency Conundrum
Is Bitcoin the wave of the future or a passing fad? Should you invest in it or run in the opposite direction? There seem to be endless debates on the future and value of cryptocurrency, but one thing is certain: the U.S. government is determined to tax it.
According to The Motley Fool , the IRS is focusing on taxing capital gains, both for investments and purchases, as well as cryptocurrency mining income. Accounting Today reported that the novelty of cryptocurrency means accountants need to be ready to answer a lot of questions about it. For example, the IRS taxes Bitcoin as property, not currency. As such, it will be incumbent upon accountants to explain these tax nuances to their clients.
In any event, given the increased focus the IRS is taking with regard to cryptocurrency, it’s safe to say that it will continue to be a trend moving into 2019, and CPAs and investors alike need to be prepared.
While these are only a few of the many trends affecting the accounting industry, they are fairly significant. It will be interesting to see how they play out, not only in the coming year but over the longer term.
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