3 Biggest Trends in Accounting Technology for 2016
Talk to any business owner and they'll tell you that two things matter in life: how often people buy from them and how much they spend. They might use terms like âcustomer satisfactionâ and âbrand advocacy,â but what they need is simply for more people to buy more expensive things more often.
The world of accounting software is just like the world of retail in this regard. What accounting software companies and accountants want is to sell more things and to keep us coming back for more. In 2016, those two ideas are going to drive most of the change we see in the market.
At SleeterCon last November, I had a chance to see the newest and greatest little tricks coming down the pipeline, and they're all designed to make your life easier while keeping you closer to software companies.
I'm actually upbeat about this year in accounting technology. The space has lagged behind many of its colleagues, with change taking its sweet time to sweep through. This year looks like it could be the year accounting finally gets things in gear and starts to take itself a little more seriously.
With all that in mind, here are the three biggest trends in accounting technology for 2016.
1. Cruising altitude will now be in the cloud. It would seem three years behind the curve in any other industry, but 2016 is going to be the year that accounting starts to move, in earnest, into the cloud. At Capterra, we did a bit of research on this last year, and we found that nearly four out of 10 accounting software users are in the cloud.
That's insanely low. We're talking about a time in human history when you can take a picture of a check with your phone to deposit it in your bank account. A time when you can pay $15 for two doughnuts simply by swiping your card through a tiny piece of plastic attached to an iPod. A time when â¦ you get the point.
The main drag on the move has been providers' lack of robust options in the cloud. Cloud-based offerings were always secondary to local installations, paling in strength and flexibility.
Now, we're seeing companies like Intuit make drastic moves to get more and more people into the cloud. Back in 2014, QuickBooks announced that in March 2016 it's discontinuing its sync manager for desktop. While not explicitly spelled out as a move toward QuickBooks Online as the primary product, that's the subtext I got.
Putting information in the cloud makes business sense. Intuit can charge users a recurring monthly fee, which businesses love. Your accountant can access your files more easily, saving you and the accountant time. You can access your accounts from anywhere, making it easier to enter expenses and revenue while on the road.
This shift has been a long time coming.
2. Computers will be doing the reading, from now on. If you're not familiar with optical character recognition (OCR), get ready to make a new best friend. OCR is the technology that makes that scanner in your office useful for things besides photocopying.
OCR is technology that turns images into readable and editable text. That means you can take a picture of your whiteboard after a meeting and have a document with all the handwritten notes typed out, produced in minutes.
For accountants, OCR is the technology that finally kills the hand-entered receipt. Until now, you've sent your accountant a huge envelop of receipts with a note that says something like, âHope you can read, haha.â Then your accountant pours him or herself a glass of scotch and tries to figure out what âdnt uz fr dog fud last time +52â could possibly mean.
Seriously, your bad handwriting is killing these people.
Anyway, OCR ends that nightmare, by uploading the receipts you get right into an online accounting platform, pulling out all the relevant text and data along the way. There are a couple of big players in this space, including Receipt Bank, Expensify, and Hubdoc.
Over 2016, expect to hear more about this and for it to take less and less time to process documents. The technology has already made leaps and bounds, but there's plenty of room for process improvement.
3. It all ends up in the same place. On that note, 2016 is the year that everything tightens up. There have been a lot of gaps in the accounting market for a long time. Payroll was kind of over there, and invoicing was a bit off to the left, and if you had credit cards, well, they trickled in halfway through the month.
Now, if a package doesn't come with some sort of invoicing system built in, we think something has gone wrong. This year, we're going to see more components of the financial ecosystem start to be integral to basic accounting packages.
For the few tools that don't make it into the core system, we'll see tighter integrations with third-party systems. Those systems will be harnessing the power of â you guessed it â the cloud and OCR.
These integrations do two things. They:
- Keep you invested in the software brand you've chosen.
- Give your accountant more tools.
That gives him or her more time to focus on helping you save and make money.
Silicon Valley wasn't built in a day. These are trends that will continue through 2016 and on toward 2020. If I make a trend list over the next three years that doesn't include more accounting in the cloud, I'd be shocked.
Still, these are the areas where we're going to see the biggest changes this year. Luckily, while everything is being driven by more money and more customers, everything also points toward less work for small business owners. So far, 2016 is shaping up to be a solid year.