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5 Mega trends for Accountants in 2020

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5 Mega trends for Accountants in 2020

By Daniel Richards, Strategic Partnerships Director, MyFirmsApp

As we welcome in the New Year and decade, it’s the perfect time to consider what has worked and what may need to change. According to the Sage ‘Practice of Now’ report 2019, which took in the views of 3,000 accountants, this is exactly what those who took part have been doing. Almost half (49 per cent) say that they have reviewed their own business practices in the last year and are consciously considering how to future proof their firms to make sure they are ready not only for the next year but for the next decade.

Developing an understanding of the trends affecting the accounting profession is important when it comes to putting together a strategic plan and undoubtedly, everyone will have their own ideas about what is set to take major stage in 2020, here are our top five:

1. Digital Revolution

Daniel Richards

Daniel Richards

The increased digitisation of tax, mandated by governments worldwide, has in part contributed to a review of business practices. Legislation that requires businesses to take submit tax returns online is bringing about a sea change in the way accountants interact with their clients.

Practices are having to re-engineer for the digital age and this provides a unique opportunity to help clients navigate their own digital journeys. Giving them their first digital tools and showing them, for example, how to capture expenses on their smartphones and tablets will help position the accountant as more than just a technician and very much, as trusted advisers working at the heart of their clients’’ businesses.

We know that clients are demanding more from their accountants and they expect their advisors to digitally engage with them in the way that they want, need and expect. In a new report by Forrester into the changing preferences of financial consumers, a massive 73 per cent said they believe they should be able to accomplish any financial task on a mobile device and that digital should be ‘woven’ through the entire customer experience

Forward thinking accounting firms globally are responding by employing new technology and implementing a mobile communications platform that provides a central place for all things financial within the accountant’s own App.

All the different systems and apps can be integrated into a single platform and rather than wading through numerous ‘best of breed’ Apps on their mobile devices, clients can save time by accessing their accounts, finance and tax information and systems through the icon for a single App.

Having a bespoke App opens the door to ongoing communication with high value clients that increasingly expect their accountant to meet them where they spend most of their time: on their smartphones and tablets.

2. Cloud

By 2026, the global market for accounting software will have a value of 11.8 billion dollars according to U.S. Accounting Today.

The arrival of cloud computing or cloud accountancy has been hugely transformative in how accountants work on a day to day basis and communicate with their clients.
By allowing accountants to perform accounting tasks from any location as well as the ability to deliver financial information and reports through the cloud there is more time to engage with the client and focus on business strategy instead of getting burdened with detailed processes.

However, it is worth noting that while Cloud may become even more dominant in 2020, desktop and enterprise software will still be used extensively. When QuickBooks online reached 3.6 million subscribers worldwide at the end of 2018, it was revealed that 80% of those online subscribers are first time users for any kind of accounting software. This suggests that users aren’t migrating from desktop to the cloud; they’re starting online.

As we enter 2020, accountants are set to play a pivotal role in introducing businesses to the cloud and those that do will gain the opportunity to advance their roles as trusted, value-added advisors and data analysts.

3. Artificial intelligence

Artificial Intelligence is an exciting prospect for accountants as there is the potential to effectively add a ‘virtual’ member to the team that is available 24/7 to answer multiple questions and carry out simple tasks even when the office is closed. This emerging technology will be used in the day-to-day running of firms allowing complex and repetitive tasks to be automated with AI, machine learning and robotics with extreme accuracy. According to global research by Sage in 2019, 58% of accountancy professionals are expecting to automate tasks using AI solutions within the next three years.

An entirely new generation of Apps can see, hear, speak, understand and interact with the world around them. Being able to add a voice or text chat interface to create bots on mobile devices that can help with basic tasks is set to transform how accountants respond to customer requests and make them more productive.

4. Real-time Connections

In 2020, more accountants will be connecting with their clients in real-time and benefiting from greater security and transparency. Recording transactions that used to take hours or days now take minutes or seconds and if a change is made by one party, everyone with access will be able to see this change as soon as it’s validated.

Employing digital tools such as mileage trackers provides an ideal first step towards engaging clients with digital technology and they keep the accountant and client connected. For example, the tracker will auto-detect a trip using a state-of-the art algorithm so the Accountant’s App on the client’s smartphone tracks in the background meaning there is less chasing for the client’s business mileage when completing the end of year tax return. Details of the trip can be sent to the accountant at the click of a button or as an email attachment, wherever there is an Internet connection.

5. Planet Friendly Approach

The climate is an incredibly hot topic at the moment and papermaking uses a tremendous amount of energy and natural resources. As we start the New Year, there will be an expectation that everyone will need to help meet the steep targets being set and one way is to reduce the ‘paper footprint’.

Despite repeated calls to cut paper usage, we are being told that paper consumption is at an unsustainable level globally having increased year on year and quadrupled over the past 50 years. The burning of trees for energy for pulping is the single biggest source of emissions by the industry (40%) and responsible afforestation globally is essential to meeting new international climate targets.

A thorough review of paper usage will undoubtedly show up areas where a paperless approach can be adopted and reassuringly, new tools, developed specifically for the accountant, can help towards this goal. For example, the signing of tax documents and declarations with digital signatures that can be emailed between the firm and client are not only secure, they speed up approval processes and bring about a closer connection through the sharing of documents in real time. Another way of saving paper includes distributing content, including reminders about tax deadlines and newswires, digitally so that the message appears on the home screen on clients’ smartphones within the accountants’ own branded App.

Looking forward

During the last 20 years technology has accelerated at such a rate and has transformed the accounting profession. And this rate shows no sign of slowing.

Is the profession doing enough to keep up with changing technology? 85 per cent of accountants believe that the profession in their country needs to pick up the pace of technology adoption to remain competitive internationally, the Practice of Now report 2019 reveals.

When asked why firms are lagging, reasons stated include a lack of time and money to invest in digital transformation (13% and 38%, respectively), although 25% of firms state a lack of expertise is holding them back.

The New Year brings with it new opportunities and digitisation is the key trend that will dominate the profession. Accounting firms that are looking for sustainable and long-term success will need to ensure their clients can accomplish any task relating to their finances on a mobile device. A relatively low level of Investment is all that’s required to implement a mobile communications platform that will enhance the client experience by delivering engagement on their smartphones and tablets 24/7. The future is already here, and firms can no longer hold back if they want to remain competitive in the next year and decade.

MyFirmsApp makes accountancy businesses better and helps them grow by ensuring vital communications are seen and competitive advantage and loyalty is maintained through improved engagement and interactions. The global number one provider of bespoke Apps for accountants and bookkeepers used by the industry’s most progressive firms, the company has developed over 1200 Apps for accountants and bookkeepers that are available in 11 countries and are used by over a quarter of a million businesses daily to manage their finances.

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Asian shares near record highs as U.S. stimulus plans offset virus woes

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Asian shares near record highs as U.S. stimulus plans offset virus woes 1

By Swati Pandey

SYDNEY (Reuters) – Asian shares climbed to near all-time highs on Monday as concerns over rising COVID-19 cases and delays in vaccine supplies were eclipsed by optimism of a $1.9 trillion fiscal stimulus plan to help revive the U.S. economy.

Sentiment in the region was also boosted by a report that China had surpassed the United States to be the largest recipient of foreign direct investment in 2020 with $163 billion in inflows.

Futures markets also pointed to firmer starts elsewhere. E-mini futures for the S&P 500 rose 0.37%, futures for eurostoxx 50 as well as London’s FTSE were up 0.3% each while those for Germany’s DAX added 0.4%.

“The FDI story has definitely lifted China and its near neighbours today, blowing an economic recovery tailwind into geographically adjacent markets,” said OANDA’s Singapore-based market analyst Jeffery Halley.

“Looking ahead, equities will find more meaningful reactions from the progress or not of the Biden stimulus package, and the level of dovishness displayed by the Federal Reserve at their FOMC meeting this week.”

Global equity markets have scaled record highs in recent days on bets COVID-19 vaccines will start to reduce the infection rates worldwide and on a stronger U.S. economic recovery under President Joe Biden.

Still, investors are also wary about towering valuations amid questions over the efficiency of the vaccines in curbing the pandemic and as U.S.lawmakers continue to debate a coronavirus aid package.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose to 726.46, within kissing distance of last week’s record high of 727.31.

The benchmark is up nearly 9% so far in January, on track for its fourth straight monthly rise.

Japan’s Nikkei rebounded from falls in early trading to be up 0.7%.

Australian shares added 0.4% after the country’s drug regulator approved the Pfizer/BioNTech COVID-19 vaccine with a phased rollout likely late next month.

Chinese shares rose, with the blue-chip CSI300 index up 1.1%. Hong Kong’s Hang Seng index leapt nearly 2% led by technology stocks.

All eyes are on Washington DC as U.S. lawmakers agreed that getting the COVID-19 vaccine to Americans should be a priority even as they lock horns over the size of the U.S. pandemic relief package.

Financial markets have been eyeing a massive package though disagreements have meant months of indecision in a country suffering more than 175,000 COVID-19 cases a day with millions out of work.

Global COVID-19 cases are inching towards 100 million with more than 2 million dead.

Hong Kong locked down an area of the Kowloon peninsula on Saturday, the first such measure the city has taken since the pandemic began.

Reports the new UK COVID variant was not only highly infectious but perhaps more deadly than the original strain also added to worries.

In the European Union, political leaders expressed widespread dismay over a hold-up by AstraZeneca and Pfizer Inc in delivering promised doses, with Italy’s prime minister lashing out at the vaccine suppliers, saying delays amounted to a serious breach of contractual obligations.

On Friday, the Dow fell 0.57%, the S&P 500 lost 0.30% and the Nasdaq added 0.09%. The three main U.S. indexes closed higher for the week, with the Nasdaq up over 4%.

Jefferies analysts said U.S. stock markets looked overvalued though they still remained bullish.

“For the stock market to have a real nasty unwind, rather than just a bull market correction, there needs to be a catalyst,” analyst Christopher Wood said.

“That means either an economic downturn or a material tightening in Fed policy,” Wood said, adding neither was likely to occur in a hurry.

In currencies, major pairs were trapped in a tight range as markets awaited the Fed’s Wednesday meeting.

The dollar index eased to 90.073, with the euro at $1.2181, while sterling was last a tad firmer at $1.3721.

The Japanese yen was a shade weaker at 103.69 per dollar.

In commodities, Brent gave up early losses to be last flat at $55.41 a barrel and U.S. crude rose 3 cents to $52.30.

Gold was flat at $1,852.9 an ounce.

(Editing by Shri Navaratnam and Jacqueline Wong)

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Philips fourth-quarter core profit up 7% on continued strong COVID-19 demand

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Philips fourth-quarter core profit up 7% on continued strong COVID-19 demand 2

AMSTERDAM (Reuters) – Dutch health technology company Philips on Monday reported a 7% increase in fourth-quarter core earnings as the coronavirus pandemic continued to spur demand for hospital equipment needed to treat COVID-19 patients.

Philips said adjusted earnings before interest, taxes and amortisation (EBITA) increased to 1.14 billion euros ($1.39 billion) in the October-December period, with comparable sales up 7% at 6 billion euros.

Analysts polled by the company on average had expected core earnings of 1.12 billion euros on 5.91 billion euros of sales.

($1 = 0.8210 euros)

(Reporting by Bart Meijer; Editing by Tom Hogue)

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Global life insurers impose restrictions, worried about long-term pandemic risks

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Global life insurers impose restrictions, worried about long-term pandemic risks 3

By Suzanne Barlyn, Carolyn Cohn and Noor Zainab Hussain

(Reuters) – Global life insurers are taking steps to curb payouts stemming from the coronavirus pandemic, including long-term health consequences that are not fully understood, industry sources told Reuters.

Life insurers, including Prudential Financial Inc, and Aviva PLC, are now imposing waiting periods before COVID-19 patients, including those who have recovered, can apply for coverage, executives and spokespeople said. Some are also limiting coverage for certain age groups.

These changes come as some reinsurers demand new safeguards from life insurers they backstop, and as the industry struggles to ascertain the extent of problems caused by the novel coronavirus.

COVID-19 has killed over 2.1 million people globally and infected nearly 100 million, according to a Reuters tally. (https://tmsnrt.rs/39Qa1d2)

Some victims suffer long-term consequences including severe respiratory problems, organ damage, circulatory impairment and chronic fatigue. Three weeks after recovery, 10% of COVID-19 patients are still unwell and up to 5% feel sick for months, according to scientists at King’s College London.

The pandemic has also caused a mental-health crisis for those who could not say goodbye to loved ones or have been isolated for months, while exacerbating substance-abuse issues for others.

It is too early to know how many people will file claims for death, long-term illness or disability as a result, but insurers worry the consequences could last for decades.

“We have attempted as a company to strategize about modeling this and have made some headway but are far from the crystal ball that is able to predict this,” said Dr. Paulo Bandeira Pinho, chief medical director of Optimum Re Insurance Co.

Optimum has met with life-insurer customers, including Prudential Financial, to map out long-term risks and possible financial impacts.

Prudential now imposes a minimum 30-day waiting period for recovered COVID-19 patients.

“Ultimately, many of the long-term implications of the pandemic are still unknown,” said Prudential’s Vice President of Operations Keith Bexell. “As the long-tail effects become better understood, our approach to underwriting may adjust as necessary.”

Since April, British life insurer LV= has postponed applications from anyone who was diagnosed with COVID-19, experienced symptoms or lived with someone who got sick, according to an underwriting policy on its website.

Aviva PLC also imposes a “short” delay for those who had COVID-19 or similar symptoms during the past 30 days, a spokesperson said.

VACCINE HOPES

Life insurers are in the business of hedging risks decades in advance. Since the start of the pandemic, the industry has said it would probably not cause major financial damage, partly because they were not seeing a swell of claims.

Global data are not available for 2020. In the United States, 8% of reported group life insurance claims from April to August attributed the cause of death to COVID-19, according to the U.S. Society of Actuaries.

Companies told Reuters the impact so far has been minimal – with LV= seeing COVID-19 affect just 2% of applications and Aviva still covering more than 9 in 10 customers – but they are taking precautionary steps anyway because of long-term risks.

Apart from those who had the disease, Optimum Re’s Pinho worries about a “wave of widows and widowers, children and parents” with shortened lifespans.

Plus, the pandemic reduced preventative health screenings, causing another set of risks, said Chris Behling, SwissRe’s head of life and health underwriting for the Americas.

However, it is not all doom and gloom. Insurers expect vaccines to dramatically improve assumptions.

Some also pointed to better mortality statistics in countries that imposed tight restrictions on travel and socializing, as well as a study from Britain’s Institute and Faculty of Actuaries that suggested surviving populations may have a higher life expectancy.

And, if insurers become too stingy with coverage, they may lose valuable customers.

For instance, LV= is excluding mental-health issues from some policies that cover critical illness and income protection for up to 12 months, said Justin Harper, the company’s head of marketing.

“It’s probably the appropriate decision to make, given we’re trying to balance the access but also the risk management,” Harper said.

(Reporting by Suzanne Barlyn in Washington Crossing, Pennsylvania, Carolyn Cohn in London and Noor Zainab Hussain in Bengaluru; Additional reporting by Tom Sims in Frankfurt; Editing by Lauren Tara LaCapra and Diane Craft)

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