“The best way to predict the future is to create it” – P. Drucker & A. Lincoln
It’s nearly the end of 2024, and the world is experiencing a huge technological revolution: machine-based automation, Artificial Intelligence (AI), and cloud computing.
Do you think it’s the future of your Accounting and Finance business?
It is indeed!
All technological advancements are contributing to nearly every business sector, including Accounting and payroll. With the ever-increasing financial transactions and data entries, machine-based algorithms prove to be highly beneficial. Let’s gain insights into the current and future trends in your accounting and business solutions in Mississauga Ontario.
CURRENT STATE OF ACCOUNTING IN CANADA:
- Accounting is a highly in-demand profession in Canada right now and is likely to grow in the future, with at least 3,000 new job openings each year.
- In Canada, accountants are primarily involved in providing tax audits, financial reporting, tax planning, and other financial services to their clients.
- Bookkeeping is mostly done traditionally using manual practices, Excel spreadsheets, and paper-based documentation.
- The accounting industry in Canada comprises various sectors, including public accounting firms, corporate accounting departments, and government agencies.
- Accounting professionals are required to stay up-to-date with ever-changing rules and laws.
IS THERE A WAY TO TACKLE CHALLENGES FACED BY THE ACCOUNTING INDUSTRY?
Currently, the accounting industry is facing some challenges that can be resolved with effective strategies. The most commonly observed challenges are:
- Reduced accuracy due to high volumes of financial transactions.
- Errors and inaccuracy due to manual/paper-based documentation.
- Difficulty managing high volumes of data.
- Staying up-to-date with tax regulations and legal compliance.
- Demand for real-time financial data and analysis from clients.
How can these challenges be resolved? Well, the technical advancements we mentioned earlier are one of the best ways to tackle each of the challenges faced by the accounting industry in Canada right now.
They help you:
- Get access to real-time client data and financial records.
- Enhance efficiency and accuracy.
- Improve communication channels, leading to better understanding.
- Ensure compliance with the updated rules and regulations.
These key points might have given you a gist of what challenges are being faced in the Canadian accounting industry and how technology can play its role in helping you tackle them.
Keep reading to learn about the predictable future trends and advancements leading to improvements in the industry.
KEY TECHNICAL ADVANCEMENTS IN THE ACCOUNTING INDUSTRY:
As of now, we’ve witnessed many ongoing technological advancements that are greatly benefiting the industry. Major advancements include:
- Increased automation:
Automation refers to a wide range of technologies that reduce human interaction in processes, primarily by predetermining decision criteria, subprocess linkages, and related actions and enforcing those predeterminations through machines.
Due to this tremendous technological advancement, Robotic Process Automation has gained significant importance. Accountants use it for large-scale data entry tasks, generating reports, and other repetitive tasks.
One thing to add is that automation doesn’t mean human dependency is totally lost. Accountants must now grasp and interpret data more thoroughly, especially when drawing broad conclusions from it. Furthermore, accountants require access to modern cloud-based technology to leverage accessible data, record transactions, handle tax payments, and verify that the organization in question is operating at peak financial efficiency.
- Data analytics & Artificial Intelligence (AI):
All businesses now have access to top-notch AI tools that they can use to enhance their working experience.
Now, there’s no need to worry about incorporating your new data into pre-existing data, making plans based on data analysis, and much more.
AI helps you focus on analytical tasks by handling manual ones. For example, data entry has now become much easier and faster with these tools, allowing you to focus more on interpretation rather than input.
You can also create customizable reports based on specific queries.
It can help you handle your invoicing and payment procedures automatically.
- Cloud-based accounting software:
Cloud-based accounting has long replaced paper-based records and continues to evolve.
This is the major and most beneficial technological advancement of this era. If handled properly, it can help you access and manage your data from anywhere, anytime, with utmost security and reliability.
It helps you store and access your data from remote servers, eliminating the need for physical storage.
You can also manage access to your valuable data—who can or cannot access it and how it can be used. It maintains confidentiality and trust with your client and your service.
- Cash flow management:
There are over 1.19 million small businesses in Canada. These small businesses play a significant role in generating the Canadian economy, as statistics show that 98% of businesses in Canada have fewer than 100 employees.
What does this mean?
It means that most businesses are small businesses.
However, it has been observed that nearly half of these businesses receive late payments, even after the due dates. The good news is that when businesses work with an accounting advisor, they can implement new cash flow management technologies and maintain accurate cash flow forecasts. This way, businesses can better plan for the long term, make investments to grow their business, or hire staff to support expansion.
- Blockchain technology:
Blockchain technology is an advanced database mechanism that allows transparent information sharing within a business network. A blockchain database stores data in blocks that are linked together in a chain.
It helps accountants and auditors access clear database records without any hassle. You can leverage smart contracts for your business using this technology. It will directly automate several steps, making it easier for you to handle tasks such as invoice generation, deadline alerts, payments, etc., without any risk of error.
WHAT TO DO NEXT?
The technical advancements and evolving approaches toward the accounting business might make you wonder: what’s next?
Well, adopting these ever-growing trends is a wise decision to excel in your field and take your business to new heights. As the world progresses, businesses should too.
KEY TAKEAWAYS:
- The accounting and finance industry is undergoing a massive transformation with the adoption of automation, AI, and cloud computing, significantly enhancing efficiency, accuracy, and data handling capabilities.
- New technologies assist businesses, especially small ones, in managing cash flow more effectively, helping them plan for growth, manage late payments, and create accurate forecasts.
- As technological advancements continue to shape the industry, adopting these trends will be essential for businesses to stay competitive and efficient.
For more insights, explore our blog on the Benefits of Bookkeeping for Small Businesses and learn How to Become a Certified Bookkeeper: A Complete Guide.Want us to help you with your finances? Book your consultation slot now and let us give you a glimpse of our affordable accounting solutions near Mississauga.