We’re now over a month into 2021, but in many ways, it feels like an extension of 2020. The pandemic has yet to subside in any meaningful way, and that means a certain level of uncertainty remains across industries, including accounting.
Business doesn’t stop, however, and the winners will be those who are able to react and adapt quickly. And when it comes to the accounting profession specifically, there are five trends I will be keeping my eye on as the year plays out:
Controllers are getting their hands dirty. The crunch among controllers already existed to some degree, but it accelerated with the arrival of COVID-19 and the lockdowns that followed. Businesses need to closely monitor what they’re doing financially, and controllers are at the center of that. For many, this means looking at numbers on a nearly daily basis as opposed to quarterly. This crunch has started to subside, but we’re not in the clear quite yet.
Controllers have been and will continue to be in the weeds with everyday functions to maintain that day-to-day visibility. Many organizations will be open to making changes to their forecasts mid-year, and that type of pivot requires agile planning.
SaaS budgets are opening up. When an organization is in a position to scale, organizations have to think about whether to invest more in headcount or software and automation. As businesses moved to remote work last year, they turned to technology to gain efficiencies, and some level of initial spending on software is required to gain those efficiencies. Businesses always look to do more with less, but it’s even more true now as uncertainty puts budgets in flux.
The move to cloud-based SaaS applications versus traditional IT infrastructure isn’t new, but it accelerated in 2020, according to IDC. This created a double-whammy effect — businesses were already increasing SaaS spending compared to traditional IT infrastructure, and the global pandemic caused most organizations to increase SaaS spending — anywhere from 10 to 25 percent would be my best guess.
SaaS applications are generally quick to deploy and easy to use, so the rate of adoption will continue to grow for the foreseeable future.
Multiple-scenario planning is now the norm. When COVID-19 hit, we put together three scenarios: One was a pre-COVID forecast, the second was assuming a certain percentage drop due to COVID, and the third was a doomsday scenario. Fortunately, we haven’t had to lean into our worst-case scenario, but it was valuable to have a plan in place to ensure we would still be viable if the worst were to happen.
Some organizations I’ve talked to have gone even further, with as many as six scenarios for their 2021 planning. This does create more work, but it’s not exponential, so it’s doable and definitely worth it.
The frequency of updating scenarios has also increased. Where most businesses used to adjust roughly every six months, or even quarterly if they had the resources, they started updating scenarios monthly and in some cases weekly at the height of COVID-induced uncertainty.
Extended uncertainty continues to drive efficiency. This might seem somewhat counterintuitive, but lingering uncertainty has continued to create a need for organizations to find new efficiencies so they can remain profitable. This means businesses need to hunker down and focus on what they’re good at.
The new administration also adds a layer of uncertainty, as there may be changes to tax policy on the horizon, including increased corporate tax rates and a minimum tax on corporate book profits. None of the proposed changes is set in stone, of course, but businesses still need to be aware of what’s on the table and plan accordingly should these changes take effect.
Remote work within accounting is here to stay. Whether it’s completely remote or more of a hybrid approach, the bulk of accounting teams are likely to work mostly remotely in the long run. Organizations should give their teams the flexibility to get things done, but you also need to be cognizant of employee burnout. Having all of the tools you need to work available 24/7 at home has indeed created some of the efficiencies we’ve discussed, but nobody wins if employees are over-extending themselves.
Also, desk space will be more heavily scrutinized as businesses return to the office, and, unfortunately, many executives are likely to look at accounting departments and wonder if that desk space is warranted. This means organizations should start looking ahead and, if this is going to be the case, begin implementing technology and/or policies that help teams get their work done efficiently.
If the old phrase “uncertainty fuels opportunity” is true, then accounting teams should have plenty of opportunities to thrive in 2021. It will undoubtedly take some shrewdness, but those who understand and lean into these trends in ways that make sense for their team and overall organization will give themselves the best chance of success.