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5 bold small business accounting predictions

By Meagan Wood

3 min read

Small Business Accounting Software is Evolving

 
For the past 21 years, I have immersed myself in the accounting profession, advising accounting firms and bookkeepers on how and why they must be more in sync with their clients. Much of this advice has centered on offering clients real-time numbers and real, actionable business advice. Along the way, I’ve also had the opportunity to familiarise myself with a number of small business accounting software and platforms.

With this track record and my gut as the foundation, the future landscape for bookkeepers and beyond seems almost predictable. Mix in some research and navel gazing, and I’ve settled on five predictions about accounting for small businesses. I believe this is what we can look forward to in the next five years.
 

1. Cloud Accounting Becomes Mainstream

 
There is a lot of noise about cloud everything at the moment. As a result, this will impact the nature of small business accounting software. But as of now, only about 10 percent of Australian SMEs use a cloud accounting product such as QuickBooks Online. The rest of the business community is using either a shoebox, a spreadsheet or a hard-drive-based accounting system. This will all change. Over the next five years we’ll see these old products and tools disappear. At some point, hard-drive-based systems will no longer be updated or supported. My prediction is that before the end of this decade around 80 percent of small to medium businesses will be on a cloud-based accounting system.
 

2. Accountants and Bookkeepers Might Become Redundant

 
With the advent of cloud accounting and its rapid rate of growth, there is far less data entry needed. Now there is more integration with (cloud-based) stock control, payroll and distribution systems. The systems are so powerful that business owners can run their own management reports and have more data than ever before to help manage their businesses. Because of the data’s integrity, there is less need for a double check by bookkeepers or accountants. We’re also seeing the beginnings of automation software that takes away the need to have an external bookkeeper or accountant. My prediction is that if bookkeepers and accountants don’t start offering valuable business advice, many will go the way of the dinosaur.
 

3. A Long-Time Question Will Finally Be Answered

 
Most small business owners have no idea how much free cash they have available from month to month. Looking at the bank balance is not the answer, nor is using convoluted spreadsheets. Just because you have $100k in the bank account doesn’t mean you have $100k available to spend. You may only have $5k available. With new small business accounting software and new algorithms, technology will be able to forecast for you and give you this answer. Technology will draw from past results, the expected results, the bank statements, the balance sheet, and the real-time profit to forecast cash availability. My prediction is that business owners will finally have an accurate cash forecast.
 

4. Accounting Will Be the Next On-Demand Community

 
The standouts for the on-demand or sharing community are Uber and AirBnB. You can book a car when you need it, or rent a home when the owners are traveling, all from your smartphone. These businesses are seriously disrupting the taxi and hotel industries. I see the same thing happening for professional accounting and bookkeeping services firms. What if we could tap into an app and get those who are available to bid for our work and then select who we wanted when we wanted? That would be cool. We wouldn’t need a full-service accounting firm. We could pick and choose based on projects or specialities. My prediction is that on-demand accounting is about to take over.
 

5. One-Click Government Filings Will Become a Reality

 
Let’s face it: most accountants and bookkeepers offer information that is redundant and based on old data. The nature of compliance-based accounting is that it is a reporting function for government agencies. The main reason the accountant is in place is so the right amount of cash is paid and the client is acting in a legal manner. But if technology can answer real-time accounting questions, it can surely handle organizing historical data for filings, right? We could have the technology to do reconciliations and lodge and file direct from our computer screens, bypassing the accountant altogether. My prediction is that one-click lodgment with government agencies will happen.

Yes, I have other thoughts as well.  For example, robots doing parts of the accounting function and artificial intelligence giving advice via a smartphone, but we’ll save those for another day.

To learn more about how small business accounting software such as QuickBooks Online can benefit your business, visit here.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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