2018 witnessed a revolutionary takeover of the accounting industry by technology. Accountants and bookkeepers across the UK transitioned to digital accounting tools and automation. They started optimising their processes to go paperless. The dawn of the cloud accounting age further accelerated these changes. The arrival of Making Tax Digital (MTD) in April 2019 will greenlit the beginning of this progressive technological movement, which will pave the way for future practices. The year saw a sudden shift in demand for advanced technological procedures and systems, which significantly reduced workload for accountants and allowed them more time to spare for other activities. Outsourcing bookkeeping services and tax returns has added to the quality time available for accountants. These changes have been positively welcomed by most accountants and firms as they are innovative, transparent and systematic, thus opening new doors for the industry to thrive.
Statistics clearly reflect the aftermath of the shift. It has been reported that by 2026, the global accounting market will be worth around $11.8 billion, and this climb can be evidenced in steady subscriber growth numbers. Xero’s users increased by 24% over the past year, and QuickBooks’ online subscribers increased by 41%. In addition, top accounting firms in the UK hit a record £15 billion in fee income in 2018. These numbers represent only a fraction of what 2019 has to offer.
Here are 5 Accounting trends that are set to rule the UK accounting market in 2019.
- Data security: Accounting practices will be regulated and monitored to ensure adequate protection of clients’ data. Accounting organisations will be required to take preemptive measures to safeguard against data thefts, hacks and violation of data privacy. Data security laws are set to be tightened, and organisations should take strict action against sources that breach valuable data. The main task for most accountants is to prioritise data security while dealing with clients. Accountants will need to take more important steps, such as becoming GDPR compliant and achieving Cyber Essentials accreditation, to preserve and protect clients’ data. Once the UK exits the EU, accountants will need to ensure compliance with the Data Protection Act 2018, which is the UK’s almost identical copy of the GDPR.
- Cloud accounting: Cloud accounting has integrated itself into most of the commonly used accounting practices in the UK. The trend will cement its place in the industry after the implementation of MTD in 2019. It will not only encourage mobility and simplify remote work, but also offer a wide range of benefits, including enhanced security and advanced data recovery options. Simplicity of use and ready accessibility make it even more enticing for accountants and firms. It will help establish smooth relations with clients by enabling collaborations and facilitating transparent operations.
- Compliance work: Automation has replaced a majority of manual processes in the accounting industry. It is a very efficient method but elevates the need for better compliance mechanisms. Accountants using this new method must ensure that they conform to the regulations prescribed by the HMRC. When MTD comes into effect later this year, it will bring about reforms in the current system of filing tax returns, as it will move it from once-a-year tax filing to quarterly digital VAT return.
- Global resourcing: Staff retention and upskilling are two of the major problems companies face, as these entail significant contributions in terms of both time and money. Global outsourcing is being largely used by UK-based accounting firms to tackle these problems. Outsourcing offers a plethora of solutions, such as improving the work life balance of in-house staff, employing new technologies to maximise the efficiency of compliance processes, reducing costs substantially and rapidly increasing the productivity of operations. Companies are using this tactic to deal with staffing shortages by employing offshore workers to complete complex tasks. This is especially helpful during the tax season and the tax reporting period.
- Millennial market: The market is dominated by young entrepreneurs, who are establishing lucrative businesses. Due to this, the number of millennials who require accounting services is growing by the day. They have precise specifications for their accountants, such as following a proactive and hands-on work approach and adding a personal touch to their services. New-age business leaders are tech savvy and open to use new digital tools to become successful. They are socially responsible and value money above all other things. Keeping these things in mind, accountants have to constantly stay ahead of new developments and practices to offer services that are best suited to their clients’ interests.