In the accounting and finance industry, change is constant and ever-present. With the future trends in this sector becoming increasingly evident, businesses must be attentive and flexible to retain their competitive edge. This article examines some of the crucial trends that companies need to comprehend, along with H Connect International’s proactive approach to adapting to these trends.
- Cloud computing
According to Sage’s press release, a significant 67% of accountants had already embraced cloud-based accounting software. Moreover, Accounting Today recently reported that the cloud accounting market is projected to reach an impressive $18.2 billion by 2025.
Cloud computing transforms accounting and finance by offering various advantages over on-premises software.
- Scalability: Can be scaled up or down as needed, which is ideal for businesses that experience fluctuations in their workload.
- Flexibility: Can be accessed from anywhere, which gives businesses the freedom to work from anywhere.
- Cost savings: Typically, less expensive than traditional on-premises software
Cloud computing plays a pivotal role in the BPM industry, facilitating remote access to diverse information, including client files and accounting software. ERPs like NetSuite, SAP, and Microsoft Dynamics, along with software like Xero and MYOB, are increasingly prevalent, especially among smaller companies. Interestingly, non-cloud solutions like QuickBooks Desktop, Sage 50, and Account Edge have also adopted remote access showcasing the influence and demand of this trend.
At H Connect International, we prioritize integrating remote access capabilities into our accounting processes, utilizing software such as Xero and Sage. This comprehensive approach caters to both cloud and non-cloud-based solutions, ensuring personalized services tailored to each client’s specific preferences.
2. Blockchain and Cryptocurrency
Blockchain is a distributed ledger technology that can be used to create a secure and transparent record of transactions. Cryptocurrency is a digital currency that uses cryptography to secure transactions. Both, make it more efficient and secure in recording transactions and making payments.
A study by PwC found that blockchain could save the global financial services industry up to $20 billion annually by reducing fraud and errors. Additionally, blockchain could be used to automate tasks such as reconciliation and auditing, freeing up accountants to focus on more strategic work.
Blockchain has several advantages over traditional accounting methods, including:
- Security: Blockchain is a secure technology that uses cryptography to protect data. This makes it a more secure way to store and transmit financial information.
- Transparency: Blockchain is a transparent technology that allows anyone to view the ledger of transactions. This makes it easier to track and audit financial activity, and it can also help to prevent fraud.
- Efficiency: Blockchain can automate many of the tasks involved in accounting and finance, such as reconciliation and auditing. This can save businesses time and money.
As these technologies continue to develop, it is likely that they will become increasingly adopted by businesses and accountants. Overall, we believe blockchain and cryptocurrency have the potential to revolutionize the way we record and manage financial transactions. At H Connect International, we aim to pioneer this change and are exploring several roles in this area.
3. The Increasing Use of Data Analytics
The use of data analytics in accounting and finance is rapidly growing. According to a 2022 survey by the Association of International Certified Professional Accountants (ACIPA), 64% of accountants use data analytics in their work. This number is expected to grow to 75% by 2025. Additionally, A 2021 study by PwC found that 72% of CFOs believe that data analytics is essential for their businesses.
There are many reasons for the increasing use of data analytics in accounting and finance.
- Budgeting: To track spending and identify areas where costs can be reduced.
- Forecasting: To predict future financial performance, which can help businesses make better decisions about investment and growth.
- Risk management: To identify and assess risks, which can help businesses mitigate losses.
At H Connect International have supported our clients in adopting Power BI and data analytics to enhance their daily accounting practices. For instance, we integrated Power BI software for a UK client, cutting task time from 5 hours to less than 20 minutes, achieving impressive efficiencies of more than 90%.
4. The Growing Importance of Compliance
As the regulatory environment for businesses is becoming increasingly complex, companies need to ensure that they are compliant with all applicable regulations to avoid costly fines and penalties.
- Anti-money laundering (AML): Businesses need to comply with AML regulations to prevent money laundering and terrorist financing.
- Sarbanes-Oxley (SOX): Businesses need to comply with SOX regulations to protect investors and ensure the accuracy of financial reporting.
- General Data Protection Regulation (GDPR): Businesses need to comply with GDPR regulations in order to protect the privacy of their customer’s data
- ISO 27001: This is an international standard for information security management systems. It provides a framework for organizations to identify, assess, and manage risks to their information assets.
At H Connect International, data security and compliance is embedded in our culture from day one. As a pioneer among Lankan BPOs, we follow ISO 27001 standards on top of keeping in touch with global data security Acts. We prioritize access confidentiality and use secure cloud-based storage adhering to the highest standards. We follow data privacy regulations in each region we operate in and are up to date with all compliance requirements and standards.
5. The Emergence of Artificial Intelligence
AI has significantly impacted the accounting and finance industry. According to an article published by Forbes, 54% of financial service organizations with 5,000+ employees are using artificial intelligence. As AI continues to develop, it is expected to play an even greater role in the accounting and finance industry in the future
- Automated tasks: AI-powered tools can automate tasks such as data entry and reconciliation, freeing up accountants to focus on more strategic work.
- Improved decision-making: AI-powered tools can help businesses make better decisions by providing insights into financial data.
- Risk identification: AI-powered tools can help businesses identify and assess risks, which can help them mitigate losses.
AI adoption is widespread, and leading companies like Intuit, Oracle, IBM, and Microsoft utilize AI for various purposes, including fraud detection, risk management, and compliance.
At H Connect International we place a strong emphasis on encouraging our employees to actively engage in AI and process automation learning and are well ahead of the local industry in AI integration into relevant areas of daily operations
Overall, with international exposure and encouraged research and development, the team at H Connect International is well-equipped to adapt to all upcoming trends in the finance and accounting space, and we are trained with precision to integrate these trends based on the unique requirement of each of our partners.
Get in touch with us today to learn more about how we can help you.