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The accounting industry was already poised to continue its trend toward sensible tech adoption in 2020, but the global pandemic shifted that trend into overdrive. Technological options such as cloud adoption, automated processes, data analytics, blockchain and even social media have seen widespread usage increases over the summer and into the fall. What choice did companies have, after all, but to use every tool at their disposal to adapt to new and unpredictable ways of doing business?

As we approach the final weeks of the year, and businesses face tough re-opening decisions, the tech question becomes: What tech innovations are going to prove the most useful to firms in 2021? The MICPA has composed its own list of predictions for the state of technology in accounting for the year ahead.

Here to Stay

1. Cloud services proved their salt in 2020, as firms still operating under traditional accounting processes discovered the necessity of accessing important files and documents from anywhere amid shutdowns and stay-at-home orders. Moving into 2021, accounting firms and professionals are expected to continue adopting cloud services at an accelerated rate as 80% of companies plan to implement some form of hybrid return to work policies₁.
2. Automated Processes will continue to see progress in 2021. Automation of routine and compliance functions will continue to gain ground in the coming year. Accounts payable, payroll, signatures, data collection and delivery were all high on the list of automation in 2020 and will continue to see expansion as reverting will create a competitive disadvantage₂.
3. Blockchain will drive efficiency among accounting firms as Distributed Ledger Technology will allow firms an unobstructed view of internal workflows to maximize budgets and efficiency. Progressive accountants should look forward to improved traceability of historic events for auditing purposes₃.
4. Big Data and data analytics will see improved regulation and protocols for responsible use regarding financial gain, as they are key to collecting valuable financial insights, detecting operational inefficiencies, tracking client progress and developing accurate forecasting models in 2021₃.

Coming Soon

1. Remote collaboration will accelerate the virtual office trend, facilitating the continuation of allowing clients to collaborate from anywhere. Forbes predicts this will handily increase the number of clients advisors can feasibly serve₄.
2. Outsourced accounting functions is one of the fastest-growing areas of the accounting sector, according to the INAA Group. By outsourcing specific tasks to third-parties, firms free up time and resources which can be devoted to expanding current services as well as new offerings to clients₃.
3. 5G will move to replace wired Internet connections as the back up as it offers unmatchable speeds and bandwidth in 2021₂.
4. Increased cyber awareness and security will require a company-wide strategy to combat growing sophistication of cyber criminals, as the FBI reports a 300% increase in attacks since the start of the pandemic₁.

What to Avoid

As the accounting industry trends toward technology adoption, focusing on innovation and doing more with less, it is important to carefully evaluate any and all tech strategies prior to implementation. The biggest mistake to avoid in 2021 is over-automating and over-digitizing. According to Forbes, the biggest risk lives within automated communication, such as chatbots self-service solutions which can takeaway the personal aspects of a company differentiating it from its competitors. The less human-to-human contact a client has with a company, the less opportunity for emotional connection which is a key driving factor in generating customer loyalty₅.

1. Dahl, Catherine. “Why the Tech Revolution in Accounting is Only Just Starting.” Bloomberg Tax. 16 Nov. 2020. Accessed on 7 Dec. 2020.
2. Kepczyk, Roman. “2021 IT Prediction and 2020 Results.” CPA Practice Advisor. 4 Dec. 2020. Accessed on 7 Dec. 2020.
3. “5 Predictions for the Future of Accounting in 2020.” INAA Group. 28 May 2020. Accessed on 7 Dec. 2020.
4. Forbes Council Members. “14 Finance Experts Share Their Biggest Fintech Predictions for 2021.” Forbes. 13 Nov. 2020. Accessed on 7 Dec. 2020.
5. Hyken, Shep. “Ten Business Predictions for 2021 – Part Two.” Forbes. 29 Nov. 2020. Accessed on 7 Dec. 2020.