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HOW TECHNOLOGY IS CHANGING ACCOUNTING

Mike Whitmire is Co-founder and CEO of FloQast,

 

The fundamentals of accounting have been around for hundreds of years. They’re not likely to change any time soon, other than adapting the way they interact with new business regulations and tax laws. But the day-to-day process of accounting has seen a rapid change in the past few years resulting from disruptive new technology. But, is this a good thing or a bad thing?

Taking the Accounting Department on the Road

Cloud-based technology is one of the most significant shifts in the modern accounting department. If 2020 has taught us anything, it’s the importance of location flexibility for businesses. With cloud accounting platforms and applications, accountants can work from almost anywhere.

Even on a typical, office-based day, cloud tech allows an accounting team to collaborate seamlessly, sharing access between several people in real-time. No need to worry about multiple versions of the financials when the current iteration is always just a click away.

Cloud technology also makes it easier to integrate apps into the base accounting software. In addition to an accounting suite, many companies use inventory software, AR/AP software, and other specialized tools to meet their needs. With so many cloud-based apps available, it’s getting easier and easier to set up an entire ecosystem of apps for your business that sync and integrate seamlessly with one another. Not only does that save time and effort, but it also reduces the chances of mistakes, omissions, and accidental double entries of data from one system to another.

 

Convenience for Accountants and Clients

For those accountants working in private practice or in the public accounting sector, technology and cloud-accounting can be a lifesaver. Files and documents can be uploaded digitally and client work can be handled remotely with no need to ever visit the client’s place of business. This makes for a more flexible and much less disruptive workday for many accountants.

For clients, this is a more convenient way to work too. They no longer need to travel across town to deliver a stack of documents and across town is no longer the limit of their accountant options. They can just as easily work with someone across the state or across the country, allowing them to find the best fit for their business needs. This is a win/win for both parties.

The New Role of Accountants

Technology has all but eliminated some part of the job for accountants, and that can be scary. As

AI takes a bigger role in accounting, many of the manual tasks are being automated. Connected bank feeds and AI can match transactions and even automatically reconcile accounts in some cases. But that doesn’t mean the job of the accountant is disappearing. In fact, it’s the beginning of a whole new role for many accountants.

But those aren’t bad things. Quite the opposite, in fact.

With their time free from the drudgery and monotony of manual data entry (and all that double-checking and second-guessing about typos and transposed digits) more and more accountants are taking on a strategic role. The numbers are beginning to take care of themselves, but businesses still need people who know what the numbers mean and can apply them to business problems.

For example, as technology makes reconciliations easier, the accounting team can get through more reconciliations each month and close the books with more confidence. They now have time to follow through with things like flux analysis and future projections. These strategic moves let the business make better business decisions, backed up by solid financial data.

 

Preparing for the New Accounting Landscape

Adapting to new technology is a key skill for the modern accountant. Those looking to get into the industry, or looking for upward mobility in their accounting career, need to seriously consider upping their tech comfort level.

Accounting degree programs are increasing their focus on technology and creating more tech-savvy accounting grads. Those already in the industry should take the hint and seek out continuing education to increase their own tech skills and understanding.

But the new accountants won’t only need tech skills, they’ll also need greater communication and teamwork skills. As they take on a more strategic and integrated role in the company, accountants will need to work well with other departments and communicate financial information to non-financial team-members. These “soft skills” have been lacking in the caricatured accountant, but they’re making a serious comeback in the new generation.

Conclusion

The future (and present) of accounting is bright. Technology is making the job easier and taking over a lot of the tedious tasks but the job outlook continues to grow. Instead of data entry and number crunching, accountants are free to analyze, strategize, and guide their clients and businesses with their financial insights.

 

Finance

HOW COVID-19 HAS RESHAPED THE PAYMENTS LANDSCAPE

By Mohamed Chaudry, Group Chief Financial Officer of FoodHub

 

The year 2020 may well have sounded the death knell for the saying cash is king. As the pandemic took over our world, consumer behaviour altered considerably as people embraced contactless payment, e-commerce and delivery services for many of the things we once handed over notes to buy.

Finextra reports that research carried out by YouGov for the ATM network Link found that 58% of Brits are using cash a lot less often thanks to the pandemic, with 54% avoiding it altogether and using alternative payment methods.

Some 76% of those questioned by YouGov added that they think the crisis will affect their future use of cash over the next six months.

 

Adapt to survive

Many businesses, particularly those in the food sector, quickly worked out they needed to pivot and adapt if they were to survive. Social distancing measures, lockdowns and the economic downturn hit the hospitality industry hard.

Safe and convenient online payments provide food businesses with a solid foundation from which to operate. The year 2020 saw the rise of payment gateways and the size of the market is likely to escalate in the coming months, giving online merchants more choice over the gateways they choose to work with.

Many of these platforms are embracing the changes in innovative ways, adapting to the altered way of life and creating different ways to facilitate recurring online payments and members’ due models. They can also put in place order ahead services for restaurants and expanded delivery options.

 

‘Seamless’ payments process

As lockdown restrictions continue to drive more people online, the e-commerce industry needs to offer seamless online payments to maximise its soaring popularity. The right payments provider should be able to guarantee security, offer access to fast-growing markets and a plethora of relevant payment methods for each market, all components that provide expansion opportunities and a better consumer experience.

Payment providers allow food businesses to focus on their core business and meet new customer demand while they take over the non-core competency tasks. Platforms such as online food portals need to design their site or app to make it as easy as possible for merchants to onboard and customers to use.

As the use of online payments racks up, online security has never been more important. Increases in one inevitably result in the increase of fraud or cyberattacks. Platforms and businesses must ensure customer data is protected. Payment partners can ensure security is key, their greater size and expertise providing the added edge to small businesses that do not have that capability.

 

Building a loyal customer base

Payment security is what will encourage—and keep—customers who haven’t previously used online food portals. Building a loyal, local customer base can encourage businesses to consider expansion—perhaps opening more venues in their region or county or even nationwide.

Promoting the ways in which a platform can benefit customers and a community—in the midst of a pandemic, for example, many people will be conscious that their local takeaway/restaurants, etc., are suffering and they’ll be anxious to help—is another way to broaden a platform’s appeal. An app that doesn’t charge a service fee or take a commission from its partners is one way to do this.

Covid-19 has accelerated consumers’ whole-scale move to online payments faster than anyone can have imagined, and they want convenient, relevant and secure payment services for markets that have previously been served mainly by cash or card.

The pressure is on for retailers (and especially food retailers who want to survive) to ensure they can meet this demand.

 

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Finance

2021 FINTECH PREDICTIONS

2020 has been a year like no other. The way we live, work, socialise and more has completely changed as we found ourselves in a new world.  Of course the fintech industry was no exception and had a challenging year that resulted in great successes and accelerated growth. Certain elements such as mobile payments have been implemented far quicker than anticipated at the start of the year fast tracking past projections by in some cases years.

So what can we expect in 2021? With better virus management, treatments and vaccine programmes rolling out worldwide we can start to cautiously anticipate a slow return to normal but what does this mean for fintech? Björn Goß, CEO and Founder of Europe’s leading mobile wallet Stocard,  looks at what we could see in the next year from the industry

 

A change in how we pay 

The pandemic has accelerated the digital services industry as people were forced to integrate COVID-19 friendly payments.  We have thus seen an increasing amount of solutions offered by fintechs such as for trading or peer-to-peer payments. This openness for digital solutions has allowed fintechs to pass the initial phase of growth.

We fully anticipate that now people have seen the benefits of digital payments and services that there is no looking back. In 2021 investment in mobile and contactless services won’t just be limited to major players but also for smaller businesses who are expected to facilitate digital payments by consumers.

In addition we are also already starting to see indications that the upper limits of payments will increase from £40 to £100 in the UK making contactless even more appealing for organisations and consumers alike. We can also expect more focus on value added services such as mobile loyalty cards integrated into a smooth payment experience.

 

The rise of the super app 

As more of the services we use to lead our lives move over to our phones we anticipate more of the so called ‘super apps’, like we’ve seen in Asia.  Consumers search for simplicity and typically favour one app that has an intuitive and easy to use interface that allows them to do everything they need in one place. We expect that these super apps will have an accelerated growth in 2021 following the pandemic as users seek to streamline their digital services and use trusted, simplified apps.

We therefore expect a merging of shopping, payment and financial services in one wallet app. The advantage here is that the consumer can choose which elements are the most important to them based on their individual needs. It can therefore provide the user with an attractive proposition as they know they can access all key services in one place.

 

More regulation, more choice 

In 2021, Payment Service Directive 2 (PSD2) will come into play ending the decades long lock in effects of banks that has dominated the industry and allowing fintechs access to customers’ bank accounts. For years financial institutions have sought ways to work around the PSD2 regulation and lock in consumers and provide them no choice.

This mandatory change will enable consumers better access to fintech services that are more convenient and effective for individual needs. This will drive the next wave of growth and 2021 will see consumers have the power back in their hands when it comes to financial services.

As more providers enter the market to offer financial services we expect lots more debate and discussion around regulation in 2021. For example there has been talk of legislation where banks are incentivised to increase the wealth of their customers and get sanctions imposed when they sell products that are not in the best interest of the customer; through this, providers would need to focus more on offering and selling relevant, beneficial products instead of the ones that bring them the highest margin.

 

Is buy now, pay later here to stay? 

Over the last year we saw a rise in buy now, pay later (BNPL) services as consumers turned to online shopping. Recent research found a 168% increase in buy now pay later apps this year.  Many consumers saw this option of purchasing as less of a risk and will have enjoyed the convenience of it during lockdowns.

That being said: the high growth statistics are only an acceleration of this trend caused by the covid-19 pandemic, and despite its recent popularity the overall share of wallet of BNPL remains very low.

In 2021 we will see whether the shift towards this new way of payment is a short term trend or a long term change. BNPL options both instore and online will become increasingly accessible for consumers due to all the investment made by retailers and payment providers. However, at the same time there has been much discussion around regulation for these services which may slow down the growth they are currently experiencing.

 

Europe’s hidden success stories 

2021 will be a growth year for European fintech companies. Having already had a strong year the continent will build on this as it continues to innovate in the sector. Maybe surprisingly, big and really successful companies are already substantially coming from outside of the big hubs of London, Paris and Berlin.  What we can expect is greater offerings from outside of these big hubs from less expected places across Europe.

So as you can see 2021 is set to be an exciting time for fintech. More regulation leading to greater choice, a permanent change in consumer behaviour driving digital services and new hubs of innovation all combine to make fintech a very exciting industry over the next year.

 

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