The following article aims to discuss accounting outsourcing and other accounting trends that are shaping the future of finance.

The accounting industry is evolving, and this is primarily brought about by trends such as technological advancements, cloud connectivity and other market forces that shape the accounting industry today. In order to remain competitive in the industry, it is important for businesses, especially those providing accounting services, to keep up with these trends:

Automation

The first accounting industry trend is the path towards automation. Accounting firms now have the technology needed to automate repetitive accounting tasks and processes such as reporting, bank reconciliation, journal entries, revenue recognition, lease accounting, and depreciation.

Artificial Intelligence

Accounting firms can improve processes through the use of emerging technologies such as robotic process automation and artificial intelligence. Programming using languages such as Python, R, Java, and C++ and machine learning frameworks can be assigned to programmers with the proper knowledge and expertise to help businesses stay competitive by being able to quickly build and train models, software development services and AI models efficiently.

Artificial intelligence and robotic process automation allows accountants to focus on higher-value activities such as making decisions such as corporate policy, data analysis, forecasts, prevention of fraud, and reporting.

Cloud-based accounting

Cloud-based accounting solutions enable easier accounting process management and handling. Cloud-based access to internet and related tools are becoming more popular among all industries. Integrated enterprise resource planning systems consolidate data from different areas of the business to provide more actionable insights.

The creation of cloud-based solutions and integration of other cloud-based project management software, CRM software, and payroll software can help make managing operations centralized and more efficient.

Data Analytics

Accounting firms need to be able to handle and manage large-scale databases and handling large data sets and relational databases. Data analytics and forecasting tools for finance functions are becoming more analytical, pushing accounting and finance departments towards becoming more proactive and analytical.

Accounting Outsourcing

There are a number of accounting companies that want to improve operations and reduce costs while maintaining high-quality standards. A great way to achieve this is through outsourcing, specifically Finance and Accounting Outsourcing (FAO), the practice of contracting out accounting and financial services to a third-party provider who hires you a team of qualified professionals with a comprehensive understanding of accounting principles and a proven track record of delivering accurate and timely financial information and overall support such as bookkeeping, financial analysis, payroll processing, tax preparation and planning, accounting, accounts payable, and accounts receivable. Furthermore, they provide support in the management of various accounting software applications.

The Finance and Accounting Outsourcing market in the U.S. is estimated at US$18.3 Billion in the year 2021. The country currently accounts for a 45.7% share in the global market.

Outsourcing finance and accounting functions can prove beneficial for organizations of all sizes. Startup finance companies may opt for outsourcing accounting to avoid hiring new staff, whereas larger companies may outsource accounting functions to save on costs.

Finance and Accounting Outsourcing can also provide access to specialized skills, technology stated above, and expertise that would be difficult or expensive to acquire through hiring and building infrastructure in-house. This practice offers a practical solution to be able to expand the capabilities of a business.

Outsourcing allows businesses to focus only on the core competencies while outsourcing functions not core to the business and keep up with the accounting service trends discussed above such as: cloud-based accounting, financial reporting, data analysis, and process automation. Through outsourcing, the business can rely on the expertise of a third-party provider specializing in supporting accounting and finance companies. This results in significant cost savings, since businesses do not need to spend time to invest in expensive accounting software, infrastructure, and staff.

Finance and accounting outsourcing services include accounts payable, accounts receivable, general ledger maintenance, financial analysis and reporting, payroll processing, tax preparation and planning, and budgeting and forecasting. Outsourced accounting staff ensure accurate financial data that help companies make informed decisions.

Roles you can outsource:

AP/AR Specialist: Accounting Outsourcing lets you work with Accounting professionals that have the right technical expertise and experience in aspects that can improve your cash flow.

Outsourced accountants can provide effective accounts payable management and ensure that suppliers a company works with are paid properly and on time. Outsourced accountants review outstanding or pending payables to ensure proper processing, documentation and timely payment.

Certified Public Accountant (CPA): Certified Public Accountants handle all our accounting operations and the financial activities of the company, while ensuring compliance with all tax regulations.

Outsourced Certified Public Accountants update the Accountant Scorecard and deliverables status, publish financial statements on time, reconcile Accounts Receivable & Retainage Receivable and other Balance Sheet Accounts Reconciliation, handle monthly, quarterly and annual closings, maintain accounting records such as profit and loss accounts, ledger accounts, and the balance sheet of the company.

Businesses can also hire outsourced Senior Accountants to oversee the finance department, manage the outsourced staff and provide assistance to the Accounting Manager and reinforce financial data confidentiality and conduct database backups when necessary.

Controllers: Controllers verify bank reconciliation ties with the General Ledger. Their tasks also include reconciling Accounts Receivable & Retainage Receivable, and other Receivables. They also reconcile Prepaid Accounts, Deposits, Inventory, Fixed Assets, and Investment. Aside from this they also reconcile Accounts Payable & Retainage Payable, and Credit Card Payable, and other assigned related roles.

Accounting Technician: Businesses can extend to offloading bookkeeping and data entry services to Accounting Technicians.

Outsourcing accounting functions can extend to offloading bookkeeping and data entry services such as efficient recording of financial transactions, payroll management, accounting records, budget reports, invoice and billing management, processing of incoming payments along with the issuing of necessary paperwork, payment posting, and managing and reconciling balance sheets and financial statements.

Accounting Technicians can collate, identify invoice eligible for payment, categorize invoice for you for proper records keeping for documentation and audit purposes.

Accounting Technicians manage payroll transactions and establish an effective payroll procedure and transactions for a company and ensure all employees are properly compensated in a fair, accurate and timely manner.

Financial Analyst: Financial Analysts provide support for day-to-day operational decisions and macro level project decisions through data analysis on operational performance and financial analysis and insights for actionable solutions.

They work with the Strategic Finance team members to create tools, standardized reports and establish best practices around financial reporting and analysis.

Stay ahead in the evolving financial landscape. Explore our blog post trends shaping the financial services industry to deepen your understanding of the current trends, including accounting outsourcing, that are influencing the future of finance.

Outsource accounting support services to Connext Global Solutions today.

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References:

Finance and Accounting Outsourcing Marketing Report. https://www.strategyr.com/market-report-finance-and-accounting-outsourcing-forecasts-global-industry-analysts-inc.asp. Strategyr.

Bookkeepers and Accountants save Time by Automating Fixed Asset Depreciation. https://gocodes.com/bookkeepers-and-accountants-save-time-by-automating-fixed-asset-depreciation/. GoCodes.

Emilie Pires. How to Automate Bank Reconciliation For Your Startup. https://www.zeni.ai/blog/how-to-automate-bank-reconciliation#:~:text=What%20is%20Automated%20Bank%20Reconciliation,it%20repetitive%20and%20error%2Dprone. Zen.ai.

Jamie Johnson. How AI and Automation Technology Can Help Accountants. https://www.business.com/articles/ai-and-accounting/. Feb 22, 2023.

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