The Fintech revolution is having a massive influence on how companies of all sizes operate. Fintech is also creating new business and finance opportunities and changing how CPAs provide services to their clients.
The creation of cloud-based software to manage accounts, process payroll, forecast cash flow, and make payments, among many other tasks, provide accountants an impressive set of tools that can make small businesses more successful.
Accountants who have not embraced the combination of financial services and technology may want to consider doing so. It is an area that will grow more in the future. That growth means more dynamic tools for accountants to provide superior outcomes for their clients.
Here are two of the top Fintech trends to be aware of in the coming year:
At the heart of new Fintech technology is the integration of many platforms to handle routine accounting tasks. Think managing cash flow and payroll, invoicing, and tracking employee work time.
The integration of accounting tasks in real-time produces impressive business intelligence. For example, cashflow management is the lifeblood of all companies. Companies become more efficient at managing and forecasting their cashflow when processes are integrated.
Without this integrated approach that allows a CPA to have a real-time perspective of the company outlays and revenues, companies risk coming short of cash when they need to cover payroll or other expenditures.
Integrating payroll, invoicing and various administrative tasks avoid these problems. CPAs also may benefit by using automated invoice tools to cut errors and put clients in a position to get their money faster.
The largest growth area in financial technology is in finance. A recent study shows it is getting harder for small companies to get loans from traditional lenders. Simultaneously, more companies are turning to alternative lenders to get the credit they need to thrive.
Alternative lenders are a welcome addition to the lending business for small companies. According to Federal Reserve data, this growing sector handled 30% of business loan applications in 2019, up from 25% in 2018.
This area will continue to grow in 2021, which is excellent news for small business owners. These lenders utilize technology to access more data from the borrower, which boosts the likelihood of loan approval. Plus, the process is simpler and faster than a regular bank.
The proper alternative lender can streamline the business owner’s access to business credit by checking data from many borrower accounts. Financial flexibility like this is vital for small companies and is something accountants should think about when talking to clients.
In the coming years, more high-tech solutions will bring more efficient ways to manage everyday accounting tasks, leverage large amounts of financial data, and streamline how companies operate. Thus, the CPA’s role will become more collaborative and strategic, not just about crunching numbers.
Using data to drive business insights is a significant reason why Fintech is bringing revolutionary changes to small companies’ financial services.
The Bottom Line
With Fintech becoming such an essential part of the CPA’s toolkit, now is a better time than ever to consider becoming a CPA if you have been considering it. Advanced financial technology will lead to a thriving and expanding CPA job market, and the work CPAs do will become more dynamic and exciting. It is an excellent time to become a CPA in this Fintech-influenced industry.