What's Next in Tech for Accounting Firms

We are well in to 2021, so what’s next? It’s clear that some of the operational and technology shifts that accounting and bookkeeping firms made in 2020 are here to stay and more changes may be on the way. 

At the beginning of the Covid-19 pandemic, many of you seamlessly adapted to a (largely) remote work model with barely a hiccup. Now it’s 2021, and you’re continuing with remote work at some level and plan on serving clients and managing your businesses in this way for the foreseeable future. Thanks to technology, an interim workplace solution has become the preferred permanent one for you and for many of your clients.

Understanding that remote work is more normalized than ever for accounting and bookkeeping firms and their clients, you should consider the following actions in 2021: 

Create or Revisit Your Remote Policies

If you have not already done so, create and implement written remote work policies for you and your team. Then, regularly audit how your team is adhering to these policies. You need to make sure that your providers really are supporting and reinforcing your policies.

This should be fairly evident, but it bears repeating. In this era of remote work, mobile devices are becoming a default choice for getting work done.  And why not? The idea of being able to use any device for email or communication, or to grab a file quickly and send it off to a client, is extremely appealing. 

We can’t simply ignore the increased security issues that come with mobile devices – they are broken into more easily, which increases your firm’s susceptibility of being hacked. As part of your remote work policies, include policies around the use of mobile devices so that you stay in compliance with regulatory guidance on technology and cybersecurity management.

To better ensure data protection and security, accounting firms can also consider buying firm-owned and managed mobile devices for staff to use, but this isn’t always the best solution and it’s certainly not the most convenient for staff. The other option is to secure personal devices. Microsoft and a few others have done a good job of partitioning off devices so that an employer can manage the applications and the data associated with the business, and the individual can use their personal device without feeling like Big Brother is looking over their shoulder.

Integrate FinTech and Other Tech Stacks

This was a hot topic in 2020, as accountants and bookkeepers worked to keep their operations and data secure while going remote, and we expect more of the same for 2021. Accounting firms need a single place – a point of truth, let’s call it – from which all their information flows to the fintech stack and between applications.  This type of deep integration also enables firms to simplify identity management (i.e., end user and end client identification and authentication) through the fintech stack. For example, moving from one CRM to another is typically a big project, but we’re seeing tools on the horizon that rely on a single point of truth and deep integration to help simplify even projects like this.

The prospects offered by integrations are exciting. Accounting and bookkeeping firms are able to streamline operations and improve workflows without necessarily needing to expand head count.

Increase Your Tech Stack Spend

Take a deep breath and let’s walk through this. Typically, firms allocate one percent of their annual gross revenues to their technology spend. This budget is mostly allocated to the firm’s fintech stack – that is, core advisor tools and applications – but anywhere from 20 to 25 percent of this budget goes to the tech stack. The tech stack is the backbone technology that supports the fintech stack, as we’ve talked about elsewhere.

To truly meet and sustain the new demands of the remote work environment, accounting firms should plan for a five to ten percent increase in spending on the tech stack. This is for spending on PCs, laptops, internet, and technology, basically anything that you need to make your remote work environment work. 

There’s plenty for accounting and bookkeeping firms to be excited about in 2021 – I know our team is excited about what’s ahead! As we saw last year, the power of a flexible and secure technology has been realized and will now be a competitive advantage when the risks of disruption to daily operations are at their highest.