We begin the new year with hope for better times, as the last couple of years have been rocky for most people and businesses worldwide. At Sage Intacct, we have been taking notes during our conversations with customers, partners, and industry leaders throughout the past few months and at Sage Transform, and have assembled a few thoughts on how we’ll be approaching 2022, and the technology we think will be important to the accounting and finance community.
While waves of infections continue, the only thing it seems we can reliably predict about COVID is its unpredictability. Nevertheless in 2022 we will adapt to a world where COVID-19 is endemic. The nature of work is likely forever changed, at least to some degree for most roles.
Small and medium businesses will continue to refine their cloud infrastructure and leverage additional apps to fill functionality gaps. Replacement cycles will begin for those applications that fail to meet needs as industries evolve and pandemic life is normalised. New and replacement technology buyers will seek cloud-based accounting systems that incorporate automation and analytics seamlessly.
These solutions will allow businesses to continue to do things remotely while allowing for hybrid and in person connectivity in situations where it provides the opportunity to be more successful or productive. The uncertainty of the past two years and ongoing cybersecurity threat levels will continue to keep agility and resiliency top of mind when accounting and finance leaders consider technology.
If you can automate it, you will in 2022. While the labour shortage continues, emphasis will be on making the most of the staff you have, investing in upskilling staff to meet new demands, and implementing technology that makes your business attractive to new hires. Automation will be used as human extenders and to ensure accuracy on projects and efforts that may be less fully staffed than they had been in pre-pandemic corporations.
According to Kevin Cumley, director of the Sage Intacct Accountants Program (SIAP) and one of Accounting Today’s top 100 most influential people in 2021, “talent and staffing is the single biggest issue right now,” and “a shortage of good quality people is driving investment in technologies that automate things that were done manually in the past to decrease the people time required to do the work which improves both efficiencies and capacity.”
AI, RPA and automation adoption will accelerate in 2022 and continue to drive industry transformation. However, pandemic era AI investments we will see in 2022 in the small and medium segment will be tactical and drive ROI from targeted workflow automations and data management changes. AI in 2022 will be applied to automate routine tasks, and put tactical solutions into the back office that drive efficiency and extend the productivity of humans.
Over the last several years, a shortage of qualified people and the ability to leverage accounting automation software to automate many aspects of recording transactions, particularly repetitive entries, and make humans more efficient, has made the economics of outsourcing more attractive. At the same time, small and midsize firms who either cannot garner the talent needed in their local labour market or want the stability and predictability of a larger firm with scale and resources not otherwise available, are increasingly looking to outsource all or part of the accounting function.
According to SIAP’s Cumley, “for mid-market organisations who may be growing as much as 30% year-over-year, turnover in mission-critical controller and CFO positions can lead to inconsistencies in management, leading firms to seek the predictability of outsourcing to ensure high quality resources in these functions.”
We’ve come a long way from just digitising records for lookup, and analytics is now pervasive and mainstream. While the intelligence we get from analytics is significantly easier to make actionable than the raw data, progress continues to automate and systematize the use of analytics, particularly around data automation.
In 2022, as we seek to gain more insights into our businesses by analysing past and current performance, being able to put the information into action will be key. According to Sage Intacct’s director of financial planning and analysis, Dominic Ballinger, “automating data flows and bringing sources together will allow us to be more predictive and to look beyond finance,” as he sees opportunities to aggregate data from multiple sources with financial data. Finance leaders’ roles increasingly include working with other areas of the business, leveraging data held by finance to add insight or drive efficiency and profitability.
The advanced data automation approaches being put in place help summaries data and get more insight into the story behind the data when it’s needed. These techniques also integrate analytics data with operational data and systems with the eventual goal of automating the actions that are taken in response. The new analytics tools that early adopters choose in 2022 will begin to tell a deeper story from multiple data sources, and offer connections to the operational systems that allow action.
In 2022, accounting and finance leaders will continue on the path to adoption of blockchain (distributed ledger) technology within business apps for specific capabilities, based on its merits. Use of blockchain-based cryptocurrency will remain extremely cautious and mainly in the consumer arena, but we will start to see some legitimate use cases appear in the business-to-business transaction space.
Jeremy Almond, CEO and co-founder at Sage Intacct partner Paystand said when he spoke at Transform this past November, that “money is now programable software.” While we may not get all there way there in 2022, the march toward paperless finance operations, the decline in use of paper checks, and the concomitant need for better financial data security is surely leading us toward the adoption of more of these block chain-based technologies. We’ll definitely be watching for regulatory and other developments in this space in 2022.
For the past couple years, we’ve seen delayed implementation dates and few new accounting regulations published as a result of regulators slowing the pace to allow businesses to react to the pandemic. However, as COVID moves to an endemic nature, it is expected that there will be some pickup in new regulations, particularly in those areas that have seen growth or innovation resulting from the pandemic.
According to Richard Cole of BKD, a Sage Intacct partner, “the pace of new regulation is still slowed by the pandemic but there are some important implementations going on.”
The lease accounting rule, ASC 842 is one of these ongoing implementations in 2022. Among the thought leaders we spoke to, areas to watch for new regulations to be introduced in 2022 include evolving and fast-growing industries like green energy, cryptocurrency, and the cannabis and hemp industries. Societal shifts like at-home work are also likely to be addressed by new accounting regulations in coming years.
The Akuna Solutions Team