It seems that what had become the norm in the accounting industry in 2020 and 2021, will prevail in 2022 – with a few additions.
This specifically pertains to changes to the accounting role itself, especially considering AI; how remote working has brought about adaptations; and how digitisation has shaped the way we work. Now there are new considerations … blockchain technology and sustainability reporting.
Gary Epstein, MD at EasyBiz Technologies, and Christopher Botha, director at Nwanda, unpack the top trends and how they will affect the accounting field.
With the new year in full swing, we only need to look back briefly to the last two years to see what started then and how it has now taken root. 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
Cloud-based accounting has become the norm and has opened up a world of opportunities for accountants. An example of this is remote working – not only have we been able to adhere to Covid-19 guidelines, but it also tore down borders, meaning that people could remain in one province or country and service clients anywhere.
The opportunity for South African accountants to now service overseas clients could become a fulfilling and lucrative one.
One must consider, though, that not all clients have adopted or will adopt cloud-based accounting , so accounting firms may have to craft a hybrid system whereby some clients will operate online, and others will maintain face-to-face interactions and more traditional methods of accounting. Remote working doesn’t work for everyone – humans are social animals after all.
Remote Working
Remote working is seen by many as a positive change, as employees are no longer office-bound to perform their duties. There does need to be a considerable focus on employee wellbeing, however, as well as more care taken regarding clients’ needs. In several studies conducted, employees experienced loneliness, lack of collaboration, distractions at home, different time zones, and staying motivated as negative effects of remote working.
Meanwhile, a separate study conducted by Hubstaff found that the biggest challenges for businesses with remote teams include communication, scheduling, tracking performance and language/cultural barriers. Another challenge it mentions is 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
Digital transformation is accelerating across every finance function, and it is a massive priority for finance leaders. The use of AI opens opportunities to service a much wider audience. Being able to readily access data helps accountants build and tell clients more about their business by cutting the time previously needed to gather and analyse such data.
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, such as continuous audits.
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, as remuneration needs to be commensurate with these broader skills.
Blockchain Technology
Also, a trend in 2022 is embracing blockchain technology. Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.
Accountants need to be open to the benefits of blockchain technology as it would improve efficiency and accuracy of transactional data, making reconciliation much simpler and improving the integrity of data. Again, the role of accountants as ‘number crunchers’ is changing – an accountant must interpret the results and be able to put together the entire picture of the business’ financial position.
A Company’s Sustainability Status
Another interesting development is the requirement for companies to report on their sustainability status. The 2021 United Nations Climate Change Conference (COP 26) to address climate change issues, saw an agreement signed by global powers to put legislation in place to compel companies to report on their climate change efforts in pursuit of a net-zero emissions target by 2050. 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 with the understanding 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.
With trends showing little to no change in the current status quo regarding remote working, this seems set to continue. However, with the government’s easing of Covid regulations, companies could see a change in the number of remote workers. Digitisation and AI are here to stay, and blockchain is fast becoming accepted.
More responsibility will be placed on accountants now that sustainability reporting is becoming a requirement, but ultimately, we should not forget that business is the mainstay of our economy, and so it must receive the attention it deserves. Accountants need to ensure that they 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.