Accounting in the future
Accounting in the future

Trends in tax firms: 2020 predictions

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While I don’t have a crystal ball, my predictions for the future of tax accounting are as simple as the ABCs:

A – Automation, artificial intelligence and advisory services

B – Blockchain

C – Cloud collaboration

D – Data analytics and predictive analytics

E – Efficient movement of data and processes

While I could go through the whole alphabet all the way down to “W” for workflow, here are the top five areas you’ll want to know about.

Automation of data entry and the way data moves are key to workflow. There should be no more manual entry of data once it has been created by a transaction. Artificial intelligence should be able to look at the transaction if necessary, then integrate it into the workflow. Robotic process automation should be used to handle repetitive processes. Tax and accounting programs are capturing data at source in some manner, from scanning to pure automation, through the use of tools, apps or routines.

Blockchain is a technology that has the potential to eliminate huge amounts of recordkeeping and is designed to be immutable. There’s still quite a bit to learn about blockchain; for starters, get a list of the top 10 real-world applications of blockchain technology.

Cloud collaboration has many meanings, but at its core, it always means that you are connected via the internet. If your firm’s data and tools are managed by a third party such as Amazon, IBM or Microsoft, you can eliminate the need to have onsite technology help.

In my case as a sole practitioner, it makes sense to keep all of my tools in the cloud rather than retain a team. I use my computer, tablet or phone to reach out for what I need. For example, I recently went over a tax return with a client and used Zoom as my collaboration tool. Then, I finished his return and put it in the portal to deliver it. Clients who are on QuickBooks® Online have no problem working with me because I can view their information in real time. In the near future, all my clients will have to adopt online tools.

Data analysis is part of advisory services. More of us are providing tax planning, for example, in addition to compliance services, and in analyzing data, automation takes care of compliance as long as a client’s systems are set up correctly. As a result, we’re helping clients be more profitable, liquid and solvent. For example, right now, my clients want advice as to how to obtain business continuity funds from the government through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. That’s something I can help them with that is definitely a value-add to compliance.

Efficient movement of data is about the processes you put in place, from start to finish, to create a seamless workflow. Your workflow should be set up in the most efficient manner with the least amount of touches. It’s wise to use a tool like Microsoft Visio to plan your processes.

The world of technology is changing, and firm leaders who constantly learn, unlearn and then relearn will benefit. If you are familiar with Lean Management Principles, you are mapping the value stream, then creating flow

As tax and accounting professionals, let’s lead the way with innovation. All of us can set the example.

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