The easy way to prepare your business for Financial Year End
We saw many trends emerging in the accounting industry in 2020 and 2021, and these are going to continue into 2022 – with a few additions. The role of the accountant has changed, remote working has become the norm, and digitisation is on the increase. Two new trends to consider are blockchain technology and sustainability reporting.
Gary Epstein, MD at EasyBiz Technologies, the authorised partner for QuickBooks Online Accountant in South Africa, and Christopher Botha, Director at Nwanda Incorporated, unpack the top trends and how they will affect the accounting field.
In 2020 and 2021, many accounting firms were either not familiar with cloud accounting or were reluctant to adopt it. They had to make a quick turnaround to be able to continue operating and to future-proof their business.
Cloud-based accounting has become the norm and has opened up a world of opportunities for accountants. It has enabled remote working, and through this, we have been able to adhere to COVID-19 guidelines and take on clients in other provinces and even other countries.
Not all clients have adopted or will adopt cloud-based accounting, though, so accounting firms may have to craft a hybrid system. Remote working doesn’t work for everyone – humans are social animals after all.
Remote working is seen by many as a positive change; however, there does need to be a considerable focus on employee wellbeing and more care taken regarding clients’ needs. In several studies conducted, employees experienced loneliness, lack of collaboration, distractions at home, different time zones, and struggling to stay motivated as negative effects of remote working.
A second study by HubStaff found that the biggest challenges for businesses with remote teams include communication, scheduling, tracking performance, language/cultural barriers, and building and maintaining trust between remote team members. Both the needs of employees and businesses need to be addressed for remote working to be truly successful.
Digital transformation is accelerating across every finance function, and the use of AI opens opportunities to service a much wider audience. Being able to readily access data helps accountants tell clients more about their business in less time.
Many AI vendors now enable the detailed analysis of client general ledgers for errant transactions or can review thousands of invoices to find potential anomalies, process millions of lines of transactions as part of the audit process, and more. This opens opportunities for accountants to add new business advisory services. With this comes a new demand for people with cloud capabilities and AI automation from a finance angle. As a result, there will be an increase in salary expectations.
Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. It is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.
Accountants can benefit from blockchain technology as it would improve efficiency and accuracy of transactional data, making reconciliation much simpler and improving the integrity of data. Accountants will need to interpret the results and be able to put together the entire picture of the business’ financial position.
A Company’s Sustainability Status
The 2021 United Nations Climate Change Conference (COP 26) saw an agreement signed by global powers to put legislation in place to compel companies to report on their climate change. But how does this involve accountants?
COP26 created a category for Chief Financial Officers (CFO) – the CFO Task Force – in the realisation that climate change efforts cannot be separated from business, and that there is an urgent need to involve key decision-makers in reporting on progress as it relates to the climate change agenda.
With more than 300 000 CFOs, FDs, Financial Managers (FMs) and Financial Controllers (FCs) responsible for the financial management of the $300 billion South African economy, South Africa is well placed to influence and lead the development of international standards and realignment.
In conclusion, with trends showing little to no change, remote working seems set to continue. However, with the Government’s new easing of COVID regulations, companies could see fewer remote workers. Digitisation and AI are here to stay, and blockchain is fast becoming accepted. Accountants need to support their clients in 2022 as it is seen as the year of recovery for most businesses that had a tough time during the last two years.