Top Trends in Accounting

Industry insiders track trends in accounting and use them to predict, among other things, a company's potential for growth; investors use trends in accounting to evaluate their investment choices. Well before that stage, however, you can use accounting trends and techniques to ensure that you remain ahead of the competition and identify any worrying financial factors before they become major issues.

As well as placing you on a secure financial footing regardless of economic instability, staying on top of trends in accounting can help you remain ahead of your competition on a local and a national level. The two main reasons for this are:

• If you ensure that you always know the state of your company's finances, you are more likely to be able to budget for effective marketing schemes.
  
   
• If you use the latest accounting technologies and methods, you place yourself on a level playing field with your competitors.

Effective modern accounting tools also come with another advantage: your company's increased ability to tackle unexpected or unusual economic developments. Using the latest accounting software, for example, will keep you up to date with changes in financial law, annual tax season anomalies, and best-practice procedures. As older accounting practices become obsolete, newer electronic filing methods will become the norm.

Globalization has changed accounting practices significantly, and the Internet has made the transmission of documents very easy, particularly in comparison with the fax machine. In former years, the prospect of receiving hundreds of faxed pages, waiting for packages in the mail, and the resulting potential for document loss discouraged many accounting firms from accepting international clients. Now, document scanning, databases, and software packages like Intuit QuickBooks have made the transmission of data between client and accountant comparatively simple and quick.

If you are licensed in various states or countries, your clients may be based in an array of different locations. Accounting trends and techniques vary from region to region, so if your company does business internationally, you may need to keep up to date with many different financial law sets. In addition, you'll need to ensure that you do not confuse one region with another as you make accounting decisions.

Another growing trend in accounting is consolidation, which is when several smaller firms come together to create a much larger company. The number of annual consolidations varies from state to state; your decision to consolidate may be based on several important factors that include the present financial state of your company compared to the other firm or firms with which you are considering consolidating. It is important to ask yourself whether they would bring solidarity to your company or if the move would create instability.

Staying up to date with trends in accounting can help you plan ahead for less prosperous times and ensure company stability. If you remain ahead of the pack, you also gain the advantage from a marketing perspective. As traditional practices become less and less common, filing cabinets have been replaced with computers and data backup systems; however, these changes have opened the door to interstate and international accounting opportunities. If you wish to consolidate your company, trends in accounting can help you define suitable partner businesses and eliminate those with questionable—or downright worrying—financial data trends.

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