Predicting the future is a lot like, well, predicting the future. It’s a tough game and it’s one fraught with half-truths and near misses. The problem most people make is assuming massive changes are right around the corner, when in reality, things change very slowly.
Accounting software is no exception to the rule, and 2016 is no longer than any other year – not counting the upcoming February 29th. So when we look to trends for the coming year, we’re really talking about extensions of existing trends, deeper penetration from current technology, and small changes to large systems.
Two separate, but conjoined, groups are driving all this – accountants and software manufacturers. In this sense, accountant is an imperfect word meant to cover everyone who works with accounting software. This is the group that buys and consumes, and makes demands of the vendors.
Vendors, in turn, are making technical advances that allow them to add new functionality and reward behaviors that make their business more profitable. The accounting software field is a healthy one, in my opinion, due to the happy balance between new tech and real needs.
Rarely are vendors creating options and new systems just to milk more cash out of their customers. Instead, brands are making meaningful changes to their software options that reward both customers and sellers.
With the preamble out of the way, here are the three biggest accounting software trends I’ll be watching in 2016.
Cloudy, cloud, clouding
The days of local storage are, largely, fading into the rearview mirror. The cloud is becoming the new home of accounting, and that’s a trend that’s unlikely to get anything but stronger in 2016.
First of all, we’re working on more and more mobile devices, so putting data in a place where we can access it from anywhere just makes sense. Mobile payments, invoicing, estimates, and time management can all feed into an accounting ecosystem, making it even more important to store your data in an accessible place.
Accountants love the cloud, too. It keeps them closer to their clients’ finances and allows them to provide timely insight without having to muddle through file transfers and other paperwork.
Apart from being easier to connect to, we’re also over the biggest security hurdles. At this point, most people are banking online, and the guidelines for storing sensitive information keep getting tighter and tighter. Break-ins will still occur, but they should be the exception – not the rule.
Finally, from a vendor standpoint, cloud-based accounting just makes business sense. You cut down on compatibility issues, you keep all your users up-to-date on their upgrades, and you make more money through the subscription revenue system.
Cloud-based accounting seems like a winner for every party involved and I can’t think of any reason why this trend would start to slow in 2016.
Less data entry through intelligent scanning
Optical character recognition (OCR) is making the world an easier place. I can, right now, point my phone’s camera at a paragraph in Spanish and it will translate that paragraph, in real-time, into English. Our ability to turn printed material into digital data has skyrocketed in the past few years.
As we move more and more computing into the cloud, we’re going to get more and more power to work with, making OCR the norm. For accounting purposes, that means no more manual entry of handwritten forms, checks, or printed receipts.
Already, companies are turning printed material into accounting software data. You can take a picture of a lunch receipt with your phone and have it listed in your account the next day. Through 2016, we’re going to see those lead times drop.
Right now, many businesses still have to do a good deal of checking to make sure the OCR is working. We’re happy with the results, but it’s not close enough to perfect. Error rates should drop over the course of the year and we’ll be looking at more and more companies using these tools – which will create more samples to learn from, causing error rates to drop again.
For accountants, this means less time spent correcting errors, freeing them up for more value-add roles. If I were going to predict a fourth trend, it would be this slow shift from accountant as overseer to accountant as member of the strategic team. It’s a slow process, though, so I’m not certain 2016 is going to be The Year for accounting.
The final trend to watch is the continued tightening of the accounting ecosystem. At the end of last year, we saw new payroll features from everyone and their cousin. As third-party apps continue to make waves in the marketplace, more and more of the big players are going to try to make their own way.
We already sort of assume that an accounting package will come with options for invoicing and reporting, and that list is going to expand as time goes on. I’ve seen a lot of expense management apps from third parties, so I’ll expect to see some of those find their way into accounting packages over the next 12 – 18 months.
Beyond that, we’ll see tighter integrations with existing applications and add-ons. Cleaner data transfers with more options for coding data as it moves into your accounting system, cutting back on manual entry and leaving less room for user error.
The year ahead
It promises to be a great year for accounting software, as we build on the successes of 2015. The work to be done isn’t small, but this is a healthy space and there’s a lot of room for growth and success.
I’d love to see one of the second tier providers make a play for a top slot, but that might not come for another few years. Only time will tell.
Keep up-to-date with all the trends in the industry this year by following the Capterra Finance blog.
Header by Rachel Wille
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