5 Accounting Tech Predictions for 2022

Firstly, I know we’re already a week into February! I wrote the outline of this post over Christmas. January was excitingly non-stop. We set 13 alpha testers up on Mayday Recharger. There was lots of rapid response product development off the back of their feedback. We worked flat out to get our Xero app certification approval, which came through last week. We’ve now got 3 weeks of product development work before we plan to go live at the end of the month. And I’ve got the opportunity to finish this post!

I’ve consulted with 9 businesses over the last 18 months on how they can best partner with accountants as a route to market, and informally advised many more. Alongside launching Mayday in 2022, I plan to spend 20% of my time consulting. I’ve developed my Partnering Accountants: Amplification coaching programme for ambitious tech businesses who want to accelerate the process of identifying and scaling the right strategies for growing through accountants as a channel to market.?

Here are my 5 Accounting Tech Predictions that I’m most excited about as I survey the horizon for 2022:

1) Spend 2.0 Matures

The HG/IRIS acquisition of Dext in 2021 brought the curtain down on the Spend 1.0 era. That era was all about getting cost information into the general ledger accounting system more efficiently. It’s leading lights in Dext, Hubdoc (Xero) and AutoEntry (Sage) have all now been acquired. Spend 2.0 builds on top of Spend 1.0. It is not just about accurate cost information, but also about the proactive management of spend through budgets, approvals and expense cards. It feels like not a week goes by without the announcement that another spend management solution has raised a gargantuan round of capital.?

In 2022 the rate of new entrants will decrease, the market will mature and segment. We’re already seeing this in the UK, for example with Pleo optimising for micro businesses with their free for up to 5 employees offer; and Spendesk delivering for 20+ employee businesses with some form of professional finance team, be that virtual or in-house.

2) Accountants Seize The Corporate Services Opportunity

For SMEs today, there exists a grey area between what is the remit of an accountant and that of a lawyer. The filing of confirmation statements, notifications of the appointment of directors and other Companies House filings, management of the shareholder register / cap table, EIS / SEIS advance assurance applications and share option scheme creation from valuations through to the option agreements themselves and associated filings.

In 2022, proactive accountants will fill that grey area. They’ll see it as their opportunity. They have the proximity to clients as trusted business advisors to be able to deliver these services. They’ll work with a platform like SeedLegals to be able to deliver them to clients themselves, without having to refer the work to a lawyer.

3) Virtual Payment Runs Are Finally Possible For All

Cloud accounting and the bookkeeping automation of Spend 1.0 have been prevalent for a decade now. The ability to deliver a virtual finance function of regular bookkeeping and management information is established. And yet there is still not a great way for that virtual finance function provider to easily queue up payment runs for their clients. So the relevant person at the client can easily approve payments of payroll and suppliers rather than having to worry about doing it, or forgetting to do it, themselves. Yes, the accountant or bookkeeper can get online banking access. But that comes with intolerable risks. Virtual accounts are a better solution, but even they require the client to move money over to an account that can be administered by the accountant.

In 2022, someone will comprehensively crack this problem. Comma are doing really exciting work on this; leveraging open banking so that accountants and bookkeepers can queue up payments from a client’s regular bank account without needing to have access themselves. Before the client then one click approves. 2022 will be the year that providing payment runs becomes table stakes alongside regular bookkeeping and management information as part of any virtual finance function offering.

4) Best Of Breed Finance Is In The Remit

The last two years of Covid induced challenges have forever changed the remit of accountants. Knowledge of the different types of funding available to clients is now expected. Accountants will not go out and proactively sell financial services. But they will need to be armed with a base level understanding of the options and the best providers for each for when clients ask the question.

Expect to see accountants build up a best of breed stable of finance products that they have knowledge about, with solutions like Arex for invoice finance.

5) Intercompany Recharge Nirvana

It goes without saying that the biggest thing to happen in accounting technology in 2022 will be the automation of intercompany recharges. There will be sheer elation among the finance teams of businesses with multiple connected entities that need to recharge costs and revenues between those entities. This elation will send the World Happiness Index to previously unimaginable highs. New company registration across the globe will soar as businesses incorporate new entities solely for the joy they can now experience in using recharge automation software. By 2023, running intercompany recharges monthly will be the accounting technology equivalent of watching a black and white analogue television.

Those are my accounting technology predictions. Would love to hear peoples’ thoughts!