That’s right. It’s finally here. This year, little robots will undoubtedly band together to disguise themselves as Santa Clause, donning unmistakably red robes, a fake, white, dollar-store beard, and a floofy red ‘n white cap. At which point, they’ll cut a chimney through the roof of your business (unless your office already has one for some reason), whisk in, and steal your accountant from under your tree! Accounting in 2020 will definitely be dominated by bots.
All because their hearts are two sizes too small.
Okay, okay. You got me. The title is click bait. Bots probably aren’t going to steal your accountants or your job, if you’re an accountant yourself. However, technology as a whole is the first and most important challenge that accountants will face in 2020. Never you mind; I’m going to break these challenges down so you can beat them back with a big stick.
Technology, Especially Automation
Here’s an argument that’s not new: “Technology is taking our jobs. Soon all of us will be on the streets begging droids for change as they shoo our raggedy selves away from storefronts.”
All I have to say about that is ‘harumph’. Bots can’t replace accountants, at least not yet. Still, technology does present an important challenge to consider for accountants.
First, personal finance for the average Joe has changed a lot because of software. For example, lots of people shovel $20 bills into their monitors so cloud programs such as Tax ACT can file their tax returns, circumventing accountants all-together. That’s been the case for some time and that trend will continue into 2020.
In fact, the trend toward automation becomes steeper and steeper. Sci-fi would have you believe that you should take up arms against the robots. That’s a battle you’re going to lose. Instead, you should make friends with them. Already, technology is making accounting work a lot easier such as through automated document compilation and tax return generation. All you need to do is press the ‘Go’ button with the software and double-check the work.
Lean into technology. Learn it. Adapt. As the job changes, you change with it. That’s how you remain employable.
Tax Cuts and Jobs Act
This law has been in place for two years now, and it’s slowly rolling out. You can read the highlights here. The best advice we can offer is that you familiarize yourself with those highlights and make sure you’re doing what needs to be done. Some key points to pay attention to:
- You can’t deduct entertainment expenses as much anymore. They used to be limited to 50% of expenses related to active conduct of business. Now, they can’t be deducted at all unless it’s simply food or drink that’s not considered lavish and the taxpayer is present.
- Assets deductions are wild. For assets that depreciate, such as vehicles, you can deduct these in full (100%) immediately.
- Small businesses (which are now businesses with under $25 million in annual gross receipts) can use the cash accounting method.
The good news is that the big bad bots can help with this as well. Make sure your accounting software is up to date, and you can automate a lot of the calculations involved with TCJA.
Lease Accounting
The basic idea here is that a 2017 law (GASB 87) requires that leases are represented on balance sheets. However, the rules of this transition to lease accounting are so complex that, for private organizations, the implementation was initially delayed until 2020. If you’re a government institution, though, such a reprieve didn’t happen. Regardless, according to this article, organizations who have already made this transition report “it was harder than they anticipated” and that “they wished they started the process earlier”. So what to do?
- If you haven’t already, create an action plan and timeline.
- Ensure that personnel are informed on the changes, including how to appropriately identify leases.
- Brush up on your existing understanding of GAAP.
- Evaluate current processes for efficiency and effectiveness.
You can learn more about this from the initial publication from FASB.
Cybersecurity
Cybersecurity challenges are not unique to accountants, but they’re crucial to any business in 2020 nonetheless. I don’t think I need to cite the numerous statistics that support that security threats are on the rise. Here’s what accountants should do to combat cybersecurity threats:
- Keep your software up-to-date. You should already be doing this for compliance reasons, but it’s equally important for security reasons.
- Minimize employee error. With cloud solutions, employees have access to accounting data on multiple devices in multiple locations, leading to a risky situation. More entry points means more attack vectors. Ensure employees are trained to keep data from getting in the hands of attackers.
- Ensure you have a strong password policy, and that passwords are updated regularly. If anyone on your team has 123456 as their password, you’re doing this wrong.
- Make sure remote access to your network and data is done through a secure VPN.
Those tips are just scratching the surface of cybersecurity for accounting in 2020. It would be prudent to check in with cyber security experts even if you’re not concerned about your current security strategy.
Conclusion
As we skid into 2020, accounting departments may not need to worry about bots taking their jobs, but they do have a job ahead of them to address challenges. Whether it’s adapting to new technologies or complying with upcoming tax code, accountants need one quality in abundance: vigilance. And, hey, if you’ve still got burning questions, we’ve got consultation services.
