Hot Accounting Topics You Need to Know in 2018April 11th, 2018 by Integrity Accounting
From the counting of goats as a sign of wealth to the record keeping of income from the temples in lower Mesopotamia; accounting and account tools have been the “language of business” since the dawn of civilization. In fact, Egyptian and Mesopotamia clay tables show the recording of tax accounting as early as 2000 to 3300 BC.
Fast forward to today, and accounting remains a major player. The big difference is the disruptive advent of technology and the desire of accountants and bookkeepers who want more efficiency and automation in their practice.
Take for instance, businesses and individuals who need assistance on their taxes turn to QuickBooks Online which recently hit 2.55 million subscribers worldwide for the self-employed. Or Xero accounting software for small businesses which now has 1.2 million customers. These software tools are not only important to individuals and small businesses but also to accountants because of their relationships with these users as they navigate their financial data.
Since we’re well into 2018, here are some of the trends in these types of technology for accountants, small businesses and freelancers that have been defining the year thus far:
Impact of the Gig Economy
If you’re an independent worker, you’re aware of the challenges of short-term contracts and freelance work. You go from “gig to gig” as opposed to having a permanent job where your taxes are automatically taken out by your employer. The McKinsey Institute’s October 2016 report Independent work:Choice, necessity, and the gig economy found that 162 million people in the US and Europe are currently engaged in “gig” work.
An accountant can you help navigate the tricky world of self-employment and provide guidance on the expense claim process. They can also assist with things like getting access to tax self-assessment apps and learning materials, so you can better understand your income and what must be reported to the IRS.
Tax System Changes
You should have already received your tax documents for the upcoming tax season. For employees, it’s a W-2. For Freelancers it’s 1099 forms. Something else to keep in mind is that the IRS recently released their 2017 Digital Services report which includes implementing online tax accounts and developing application programming interfaces (APIs) to better engage with third-party software. An accountant can help you understand the new legislation and how it affects your taxes going forward.
The Growth of Artificial Intelligence (AI)
Because accounting is such an old profession, there hasn’t been much innovation besides software that assists in number keeping. But now AI and machine learning technologies have gotten into the bookkeeping industry. Accounting software vendors you’re already familiar like Intuit, OneUp, Sage and Xero already have out new functions like automation for data entry, reconciliations and more.
And according to Forbes, by 2020, mundane accounting tasks like tax, payroll, audits and even banking will be fully automated. Ask your accountant about AI tools that are already out there. For instance, there’s Sage’s chatbot Pegg, Xero’s Discuss, Quickbooks’ Assistant for small and medium enterprises (SME)s—all of which can eliminate accounting errors that are generally hard to find. These advancements are important because they help reduce accountant liability, so they can focus more on being your advisor.
More Focus on Data Security
With big data breaches happening more and more, accountants understand the importance of safeguarding your financial data and personal information. Be sure to ask your accountant about what type of security software they’ve invested in before you do business with them.
The Rise of DIY Accounting Solutions
Even though software like Intuit’s Quickbooks Assistant and Xero have virtual assistants that make accounting tools simpler to use, SMEs still need a strategy for the future. Personalized insight is something software can’t provide. So, accountants have an opportunity to redefine their roles and offer customers their in-depth knowledge of accounting systems and weight the financial climate to help your business thrive.
What accounting trends have you noticed in 2018?
It’s never too late to start planning for your success. Use these trends as part of your 2018 strategy and reap the benefits. Integrity Accounting can answer questions about the latest technology for tax preparation and offer guidance to help your business grow regardless if you’re self-employed or have employees. For more information, visit www.accountingnewmexico.com or call 505-205-1900.