5 Small Business Accounting Trends for 2023
Technology is constantly evolving, so there are many small business accounting trends. Accountants must understand how to make the most of these new trends to provide clients with the best possible services. You'll need to find an experienced accounting professional who can take advantage of these innovations for small business owners.
It is time to invest in automation for accounting
Although automation has been a popular buzzword for a while, small business accounting will see a significant increase in automation by 2023. Automation will not be the subject of debate. Automating rule-based tasks will increase efficiency, reduce errors, and improve margins. Small businesses can benefit from automation by having accountants use it internally.
Automation makes internal processes more efficient and improves the services that accountants offer small businesses. These processes can be automated and include bill pay, expense processing, and bank reconciliations. In addition, automating information allows for faster access to data, which can reduce turnaround times.
Automation also allows accountants to offer services they might not have been able to provide a few years back. For example, accounting firms have yet to be able to assist clients with accounts receivables traditionally. Using apps to automate A/R collection, such as sending reminders or tailoring reminder messages, accountants can now take another burden off the client's shoulders.
How many accounting firms are now automated?
A recent Deloitte survey found that accounting processes in 75.7% are either very manual or largely manual, according to accounting and finance professionals. Many professionals plan to use technology to automate their accounting processes, such as cloud-based solutions for budgeting, forecasting, reporting, and other tools (36.2%) and data analytics and visualization (39.7%).
Accounting firms who want to keep up with the curve and help their clients stay ahead must consider automating processes. Automation can speed up processes, increase the number of services offered, facilitate communication, and provide deeper insights.
The new generation in banking: What are neobanks and how do they work?
Neobanks are an excellent example of the innovative accounting technology we're seeing. They are faster and digitally enabled and early adopters of the latest tech. What are they exactly? Neobanks are online-only institutions that offer all the services you would expect from a traditional bank, including checking and savings accounts, business loans, credit card access, and more. You don't even need to go to a physical location.
With so many banking options available, accountants can be bank advisors. An accountant can help you choose the right bank by understanding your small business. A small business requires only a part of the range of services provided by a traditional bank. For those looking for a more direct, faster banking experience, Neobanks is the best choice.
What are the advantages of neobanks in small business accounting?
Neobanks are more agile than traditional banks, and they will often work well with cloud-based accounting software. For example, if you receive a check deposit from a bank, you may only see the amount and the 'Check Deposit' when it is transferred into your accounting software. Neobanks allow you to view more information and a photograph of the check.
Neobanks also offer loans and credit cards. Credit cards provide more functionality. You can control what expenses you can pay for and how much each credit card is allowed to be used. Receipts can be automatically matched to transactions and synced with your accounting software. Acquiring small business loans is usually much more straightforward than traditional banks.
It can be overwhelming to sort through all the small business apps
There has been an increase in small business software. Many people work remotely around the globe, so it is more important than ever for small businesses to be able to sort through the noise and find the right apps. Small companies require inventory management apps, CRMs, cash flow management tools, and CRMs.
This is where the problem lies. All these apps must be able to communicate with small businesses accounting software. As with banking, accountants can recommend apps and help with software implementation. An accounting integration allows accountants to help you choose the best POS system and e-commerce platform, then connect it with your accounting solution.
A small business should also be able to navigate between the apps they use efficiently. Otka Inc. found that companies use an average of 129 apps and are unhappy about this. Small businesses need a simple but effective suite of apps that can be integrated and assist with work.
Artificial intelligence in accounting
Although complex and overwhelming, artificial intelligence (AI) is still a daunting concept for many. However, many tools are available that make AI easy to understand, making it easier for small businesses to work with the accounting industry. AI does not necessarily replace jobs. Instead, it can simplify mundane tasks and make more time for meaningful work.
What can AI do for accounting?
Most noticeably, a survey of accounting professionals found that 60% said advisory would be their primary growth driver for the year. Traditionally, advisory services were only financially-based. With technology playing such an essential role in the generation and analysis of financial data, it is now necessary to find a hybrid approach that bridges this gap between accounting technology and financial advisory services.
Accounting automation, software implementation, and artificial intelligence should all be combined to improve the quality and efficiency of advisory services. For example, accounting professionals can now create an environment where data flows seamlessly between applications and manual tasks are automated. This gives accountants more time to provide insights into various areas, including growth profitability, strategies, and business intelligence.
We expect more agile approaches to building strategies with more efficient processes. The ability to monitor and analyze data more frequently can give accountants more opportunities to discover new insights. This flexible approach allows businesses to seize opportunities sooner than if they were to follow a more structured approach.
Technology can improve customer experience in general. For example, communication between small businesses and accountants can be more accessible. In addition, with data in the cloud and available at the touch of a button, there's a greater expectation for a seamless, instant, and location-independent interactions.
The key takeaways from small business accounting in 2023
Small business accounting moves quickly, and significant changes will occur in 2023. The overarching theme is tech, tech, and more tech. As a result, accounting professionals must stay up-to-date on the latest innovations to bring maximum value to small businesses.
Sources: Deloitte & The Association of Accountants and Financial Professionals in Business. (2020). From mirage to reality: Bringing finance into focus in a digital world. Https://Www.Imanet.Org. Retrieved January 9, 2023, from https://www.imanet.org/insights-and-trends/the-future-of-management-accounting/from-mirage-to-reality-bringing-finance-into-focus-in-a-digital-world?ssopc=1
