It is a brave new world for accounting firms. New technology, pent-up client demand for advisory services, and ever-increasing compliance and regulatory oversight have created a new “business” mindset among accounting organizations — identifying clients’ needs and building the infrastructure to meet those needs.
Key Takeaways
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Modern accounting organizations are asking how can we:
How Plooto can help firms reduce operating costs, drive greater efficiency and gain more control
Demand for non-traditional advisory accounting services:
Advisory services include recommendations on how a business can use new technologies for increased efficiency.
Value-based pricing:
Value-based pricing provides both business owners and clients certainty on prices and prevents surprises. Value-based pricing is not only a way to improve a firm’s bottom line—it can be a crucial tool in enhancing customer service and improving client satisfaction. A recent PCPS/CPA.com National Management of an Accounting Practice (MAP) Survey found that use of value-based pricing approaches has soared while hourly billing continues to decline.
Cloud-based accounting software:
Cloud-based accounting systems allow you to access your data from any device with an internet connection, making it easy to share files and collaborate with others.
Systems Integration:
Plooto’s two-way sync with Xero and QuickBooks accounting software results in clear payment records, complete audit trails, and automatic account reconciliation.
Emerging technologies:
Artificial intelligence (AI), data analytics, machine learning, blockchain, and remote audit techniques will continue to transform accounting practices in ways not yet imagined.
The 2020 Rosenberg Survey, an annual study of the CPA industry in the U.S., list attributes that contribute to the profitability and success of larger firms:
Technological innovation — and with it, change, disruption, and new challenges — shows no signs of slowing down, leaving businesses in its wake wondering how can they navigate toward a more profitable, sustainable future.
The successful modern accounting firm will have a:
With increased automation and integrated systems, outside accountants can offer their clients:
To grow revenue and retain clients, modern accounting firms will offer more client accounting services, including:
By understanding the client’s ecosystem, the accounting firm will play a more prominent role in adding value across all aspects of the client’s business, including outside issues:
In short, the modern accounting firm’s role is to understand the client’s business at a micro- and macro-level, optimize its assets, and prepare it for the future.
The accountant’s role is changing. Clients today want to see their accountant as a trusted adviser, an informed partner who can help guide their business. It requires the firm to adopt a client management strategy. Client management requires a holistic understanding of the client’s business, strategic goals, and journey to achieve those goals. Failing to engage more deeply and often with the client will cause the firm to deliver a lower level of service, miss revenue opportunities, and potentially lose the client.
Accountants today play a more prominent role in advising small businesses. Technology and automation have enhanced the accountant’s ability to collect, manage, and analyze data, contributing to more significant insights and informed decision-making.
The internet and new digital tools have given small firms and businesses access to worldwide customer and talent pools that were once the exclusive domain of multinational corporations.
Technology enables accountants to replace time-consuming data entry and number-crunching activities with roles that require a more strategic outlook: data analysis, financial planning, and business consulting.
Technology also allows customization across every aspect of accounting, including data entry, reconciliation, and reporting. Customers want their individual needs to be met instead of getting cookie-cutter solutions.
Finally, technology supports accounting solutions that help provide companies with real insights — rather than just an overall financial position — so they can make informed, strategic decisions.
According to Finances Online’s report, 57 Critical Accounting Software Statistics: 2022 Data Analysis & Market Share:
To overcome inefficiencies within your organization, you need to optimize your internal workflows supported by digital technology. Appropriately implemented, digitalization can:
A strategy for efficiency starts with having clearly defined steps.
From managing cash flow to producing accurate forecasts, from hiring talent to dealing with artificial intelligence, from mastering cybersecurity to conducting business without borders, accounting and financial professionals have a wide and diverse range of challenges.
Cash flow
Cash flow is simply the movement of money in and out of a company. Cash flow suffers when an accounting practice bills only after completing the project, which could delay payment for several months. Charging a monthly fee ensures predictable income and healthy cash flow.
Accurate financial forecasts
Financial forecasting is used to predict a company’s future financial performance. It involves evaluating a company’s past performance and the market’s current trends. Forecasting helps you predict potential issues, make better decisions, and measure the impact of those decisions.
The major components of financial forecasting consist of projected income statement, cash flow, balance sheet, and funding sources.
Financial forecasting is a challenge when finance teams deal with data silos. To make accurate forecasts, finance professionals must understand other departments’ performance and goals. Digitalization that promotes the integration of data across multiple sources facilitates getting accurate financial forecasts.
For example, Plooto offers a single integrated AP/AR platform to manage payments and reporting. Businesses can easily track cash inflows and outflows and have greater cash flow visibility. With Plooto, you can see every detail of your payment’s status – when it was made, where it is, and when it will arrive in your account.
Challenged to hire and keep finance and accounting roles? You’re not alone:
Fortune reported that it’s simply not a decrease in interest in finance and accounting. The broader challenge is finding talent that combines a deep accounting and finance background with the right technological capabilities. This has given rise at many universities today where accounting majors are taking courses in machine learning, robotic process automation, analytics and statistics courses.
According to Finances Online’s report, 57 Critical Accounting Software Statistics: 2022 Data Analysis & Market Share, 57% accountants who believed that technology literacy is the most critical skill for future accountants.
Artificial intelligence (AI) is playing a crucial role in accounting and finance by automating routine tasks. AI technologies — including Machine learning (ML) and deep learning — help accounting and finance professionals perform their work more efficiently.
AI will transform the productivity of accounting firms and their ability to scale. According to a study by the Institute of Management Accounts (IMA):
Adopting AI and ML platforms will help accounting firms streamline their processes and speed up the work.
Upskilling is gaining new knowledge, tools, and abilities. Employers may upskill staff through training programs to achieve a more proficient workforce. Workers may upskill themselves via continuing education, certification, and private training.
According to PwC’s 23rd Annual Global CEO Survey, 74% of CEOs are concerned about the availability of critical skills in the workplace. Upskilling is especially crucial for accountants and finance professionals. They must be open to change and adaptable to technological advancements in today’s digital work environment.
New regulatory changes and new accounting standards have been a challenge for accounting teams over the past few years. KMPG Advisory sites 10 key regulatory challenges of 2022. Technology will be a major area of focus:
How does cybersecurity affect accounting? Accounting cybersecurity practices ensure that your firm protects sensitive data, not only for your firm's compliance but for the safety of your clients who've entrusted you with their financial, personal, and professional information.
As accounting firms manage and store valuable financial data and sensitive business information — credit card credentials, bank account details, and other e-wallet passwords — cybersecurity is becoming ever-increasingly important.
Critical steps to protecting your client's accounting information include:
Globalization is the increasing flow of goods, services, capital, people, and ideas across international boundaries. We see and experience the core benefits of globalization daily:
But globalization comes with problems. When conducting business worldwide, businesses must overcome the following challenges:
Different local regulations for every country
Generally Accepted Accounting Principles (GAAP) vary from one country to another.
Consolidation of entities in a group
Accounts of each individual entity need to be maintained per the rules and accounting standards of the country of operations.
Calculation of impairment of investment in subsidiaries
This is especially critical in the entities which are making losses or are in inaccessible locations or countries with a challenging political scenario.
Transfer Pricing (TP) is fixing the price of goods and services sold between the related entities within a group of entities.
Access to good data drives successful strategic planning and execution. Plooto is a cash flow company, and when you make payments through our platform, we collect data that enables you to see:
Plooto records this data in your accounting software automatically as well.
You can then filter the raw data. For example, you can look at specific suppliers. For further analysis and reporting, you can easily export this data into an Excel/ csv file, which can then be imported into third-party data tools for study. Plooto provides the data you need to make more informed and better decisions.
Plooto dramatically reduces accounts payable processing costs and manual touches through smart automation and robust integration with your accounting software.
Plooto helps companies gain greater efficiencies by automating all the processes around data entry:
Plooto is a cloud-based, end-to-end payments automation company that helps accounting firms and small to mid-size businesses (SMBs) automate, streamline, and improve the efficiency of their domestic and international payment operations.
Cloud technology allows you to avoid the bother and worry of:
Additionally, cloud technology with data storage protocols, in conjunction with Plooto’s security practices, ensures that your documents are secure.
Plooto securely stores your records — including contact lists — and audit trails, including
You also have the ability to export the audit trail of some records in Plooto.
The bottom line: Plooto enables you to track payment from start to finish. And with your data stored in the cloud, you can access it anywhere.
News about technology — and how it will change how we live, work, and think about the future — drowns the mediasphere daily. A reoccurring refrain comes from this cacophony: “Will a machine replace me?”
While plenty of books, movies, and articles paint a bleak picture of technology’s impact on society, the latest studies today reveal a different view. According to the Gartner research firm, artificial intelligence (AI), a technology that figures prominently in the news, will create more jobs than it will replace and generate several other substantial benefits.
Artificial intelligence is based on the principle that human intelligence can be defined in a way that a machine can mimic human cognitive activity. AI automates manual, repetitive tasks with greater accuracy and less time than humans.
Initially, accounting used AI to handle tax preparation, payroll, and audits. Today, accounting software uses AI to automate account payables and accounts receivables workflows. But the accounting field is more than just entering data and totaling numbers. It requires someone to analyze and interpret the data.
AI frees accountants to focus on strategic tasks requiring analysis, creativity, and collaboration. AI’s ability to organize vast amounts of data will help accountants drill down on the “hows” and “whys” of issues and play a more creative and strategic role.
Becoming a modern, automated accounting firm requires change. Accounting firms that focus on the past or ignore current developments will certainly miss the future. There is plenty of evidence today that leveraging the latest technology, adopting a business mindset, and automating operations will help firms grow their client base, create new revenue streams, and become more efficient and responsive to changing market conditions. In the end, the modern, automated accounting firm is the fusion of present and future possibilities.
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Frequently Asked Questions
What is accounting automation software?
Accounting software technology helps businesses record and manage their financial transactions. An accounting platform can include accounts receivable, accounts payable, general ledger, payroll, journal, and trial balance features.
Why is accounting automation important?
Accounting automation software enables accountants to replace time-consuming data entry and number-crunching activities with roles that require a more strategic outlook: data analysis, financial planning, and business consulting.
What is accounting software used for?
Accounting software manages and records the day-to-day financial transactions of an organization, including fixed asset management, expense management, revenue management, accounts receivable, accounts payable, reporting and analytics.