BY MAYRA DIRICO
QUEENS CHAMBER OF COMMERCE
Updating and modifying your small business’s accounting practice gives you more time to spend working on your business. New, innovative trends allow you more useful ways to interact with your data and generate new insights about your business.
Here are the three new accounting trends for the coming year paired with analysis on what they mean for your small business.
1. Allow Automation to Reduce Your Paperwork
Much of the automation work in accounting revolves around “optical character recognition (OCR)” technology, which scans a physical document and spits out its contents in a digital format. For example, when you take a picture of your receipt, OCR processes the image, pulls the numbers and writing out, and generates structured data on the back end.
Two things are happening right now, making this automation even more valuable:
• The speed of OCR is accelerating. This means images scanned into your system can be converted into data faster, close to real-time.
• Use automation and programs to make recommendations, generate smart forecasts, and tease patterns out of complex data.
What it means for small businesses: Automation is great for compliance and is getting better at categorization. Xero, QuickBooks, and expense management software brands like Expensify have already begun implementing this.
2. Potential New Rates for Accounting Services
Everyone is benefiting from the time accounting and expense management software is freeing up. With that free time, accountants are moving toward a consulting role.
Compliance used to be a huge part of your accountant’s day. There were always things for your accountant to straighten out or put in the right place, but as software gets smarter, this type of work lessens.
Your accountant can now spend more time, for example, recommending investment strategies, helping forecast expenses and revenue, forecasting cash flow crunches and providing general business advice.
What it means for small businesses: Expect the change in focus to come with a change in billing. Instead of being charged for filing your taxes or a small, singular task, more accountants will charge a recurring fee for acting as a consultant.
3. Better Visual Representations of Financial Data
Well-visualized data helps business owners make better decisions. Small businesses are trying to make data easier to consume and interact with. In 2018, we’ll see more built-in and standalone options for viewing your financial data.
The strongest versions will allow you to use visualization to play with forecasts and budgets. Quickbooks and other accounting software are already putting this into practice.
What it means for small businesses: Better visualization means better decisions and less reliance on someone else to tell you what’s working and what isn’t. Of all the trends listed here, visualization is the one most likely to change the small business world.
Giving people more certainty about their choices means they have a higher chance of getting it right. This decreases major mistakes and leads to fewer companies slowly sliding out of existence.