In the past few years, new technologies have developed which have transformed almost every aspect of a business. The accounting industry was thought to be stagnant for many years, however, with the emergence of new technologies it certainly looks ready for disruption. There are a few drivers that must be seen in an industry before it dives into disruption.
What drives Disruption in an Industry?
Complacency is one of the biggest signs that disruption is on its way, as businesses become mundane and instead of focusing on the future, boasts about their past accomplishments. This is an ideal opportunity for new players to come into the market and make an impact.
Frustration and Lack of Automation
Customers today are highly demanding and want better offerings. If existing practices in the accounting industry are not able to cater to their needs, they will look for some other option. Manual tasks usually take longer and frustrate the customers who want quick results. Automated solutions are in high demand in such an environment, which ultimately leads to disruption.
Many new start-ups entering the market force the big players to either change their approach to innovation or acquire the emerging of new companies. Such a scenario can drive disruption in any industry.
When two or more of the above-mentioned drivers are present in an industry, it is set for disruption. Looking at the financial sector, we see that they are in play, one way or the other.
5 Trends Driving Disruption in the Accounting Industry
Customers want better connectivity
All service-based industries are opting for processes that are customer-centered and offer better value to them. With the advent of new tools and cloud technology, accountants are able to connect with their clients in newer ways, which builds healthy relations between both parties. All the business plans and future scenarios are discussed in real-time because of high-speed connectivity and problems can be solved as soon as they arise.
We can see this trend all around us as both service providers and clients have access to real-time information. It is all about information and whoever has access to the most relevant and rapid information has a competitive advantage.
The advancements in business intelligence, big data, and machine analytics have far-reaching consequences in every aspect of the business. Big data allows businesses and decision makers to access an extraordinary amount of information and analytical tools to decide for their future.
Today, accounting professionals are using these tools to enter data, record keeping and analyze the future prospects for their business. Big data is a massive amount of consumer data and financial trends, which enables the strategists to view things from a broader perspective, allowing them to predict the future needs of their clients. The demand for business analytics professionals is on the rise because they are specialists in organizing big data and finding utilitarian patterns out of it.
Customization and specialization
It can be observed everywhere, as businesses are acquiring a taste for customization. This has been one of the driving factors to disruption in every industry, as clients only want to see or use the products that are fit for their specific needs. Social media users can choose to view content that they desire while smartphone users have access to the apps they want.
In accounting, this has resulted in an increased demand for specialized products instead of bundled packages. Businesses only want to pay for the specific services they require and cut costs on unnecessary services. If a company wants to outsource only its bookkeeping, the service providers need to oblige. Consequently, the accounting industry is seeing a shift in product offerings and price structuring of accounting software and other services to fit the need of their clients.
Smartphone usage has risen rapidly in the last decade and almost every business owner now owns one. This is one of the biggest challenges for accounting service providers as they must evaluate the kind of devices their clients use and then develop seamless apps for those devices. Many small business operators want to perform most of their accounting functions, like managing accounts, recording expense and tracking financial information on the move.
The accounting industry is coping with this challenge by equipping these clients with apps and portals specifically built for this purpose. The security features are becoming more advanced and user-friendliness of these apps is being worked upon continuously. Other value-added features like useful tips and advice are also helping service providers to attract new clients who want to keep track of their business on the go and stay on top.
We are witnessing the disappearance of manual data entries. Things like electronic documents, automatic imports and software solutions are becoming more of a norm. Businesses are better able to utilize their resources because of automation, as it saves them valuable time and cut HR costs. Real-time reporting is possible through automation and accuracy is improved significantly. Automation is going to be a key driving factor in the disruption of the accounting industry in times to come.
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