When you think about the future of accounting, what comes to your mind? Maybe something so futuristic it seems impossible? That’s probably how accountants back then felt about the idea of Artificial Intelligence (AI) being able to analyze large datasets and use the information to forecast in minutes. This is something that would have taken them hours or days to do manually.

In essence, never say never. The accounting profession is continuously evolving, driven by technological advancements, changing regulations, and shifting client demands. Emerging trends, such as cloud computing, data analytics, and automation, are transforming the way accountants work.

And in response, “accountants around the world are embracing change within the profession, bringing in new skill sets and expanding services to better meet client needs,” says Jennifer Warawa, EVP of Partners, Accountants and Alliances, at Sage.

These changes are improving efficiency and enabling accountants to provide more strategic and advisory services to their clients. As an accounting or bookkeeping owner, you should be aware of these trends. It will future-proof your firm and ensure you remain competitive in the industry,

In this article, we share ten of the most significant accounting trends that we believe will shape the future of accounting.

This is by no means an exhaustive list, as there’s currently a lot going on in the industry. But we’ve carefully selected these ten trends because they represent some of the most significant shifts that will impact the accounting profession in the years to come.

These trends demonstrate the increasing importance of technology, data-driven insights, and client-centric services in the field of accounting. Embracing them will improve your efficiency and help you provide better value to your clients in the years to come.

1. Artificial Intelligence in Accounting

The release of ChatGPT in late 2022 marked a turning point, catapulting AI into the mainstream consciousness. This advanced language model demonstrated AI’s capability to understand and generate human-like text, sparking widespread interest and adoption across various industries.

The accounting profession is no exception. According to a Thomas Reuter report,  8% of surveyed tax and accounting firms are already using GenAI technology, and 13% plan to use it soon.

But how exactly are they applying GenAI to their accounting work? The top five use cases for the firms already using or planning to use it are accounting/bookkeeping, tax research, compliance, tax return preparation, and document review.

This is all great, but we’re just scratching the surface. AI’s potential extends far beyond these routine functions. In time, we can expect to see increasingly sophisticated applications in accounting. Like say, an AI system that can interpret complex tax laws across multiple jurisdictions, providing real-time advice on the tax implications of business decisions.

All these advancements have left some accountants and bookkeepers scared AI may replace their jobs. But Shahram Zarshenas, CEO of Financial Cents, disagrees. He says,

There’s always going to be a need for that human element because it’s a complex job. What’s going to happen is it’ll allow them to shift their focus. They’re going to be able to get away from the low admin work they probably don’t like doing in the first place, and free up their time to an advisory role which is the more profitable service to offer anyway."

Basically, AI aims to assist, not replace humans.

2. Automation

More and more firms are starting to automate their clunky and manual workflow processes. Our state of accounting workflow automation report showed that 55.2% of accounting firms bought workflow automation software to resolve their workflow issues. This high adoption rate reflects the growing recognition of automation’s benefits in the industry.

And the results have been great too. Since implementing workflow automation software,

  • 34.8% now spend an average of 0-1 hour scheduling and assigning work per week,
  • 33.5% now spend 0-1 hour reviewing and updating the status of work each week,
  • 55.2% say automation made their onboarding process smoother for sure,
  • 32.9% say automation has made their firm very collaborative,
  • 45.5% say receiving documents from clients became fast since implementing workflow automation,
  • And 27.6% of respondents say the biggest impact of workflow automation on their firm is helping them implement standardized systems and processes.

Because of these amazing benefits, we expect this trend to hold, and even more accounting firms to adopt workflow automation software like Financial Cents.

3. Cloud-Based Accounting

Gone are the days when accounting software had to be installed on individual computers. These days, cloud-based accounting software has become the norm, allowing firms and clients to access financial data and collaborate from anywhere. This shift has improved efficiency, enhanced data security, and enabled real-time insights.

And this trend doesn’t show signs of slowing any time soon. A report valued the global Cloud Accounting Software market size at $4144.0 million in 2022, and it’s expected to expand at a CAGR of 10.56% during the forecast period, reaching USD 7567.54 million by 2028. This means even more firms will start using cloud-based solutions to streamline their operations.

Recommended:

The 10 Best AI Accounting Software for Firms in 2024

4. Blockchain Technology

Blockchain technology, originally developed as the underlying system for cryptocurrencies, has been gaining traction in various industries since its introduction in 2009. In recent years, its potential applications in accounting and finance have caught the attention of professionals and researchers alike.

One application is in conducting audits. Traditional audits can be time-consuming and prone to errors. However, blockchain technology can revolutionize the audit process by creating an immutable and transparent ledger of all transactions. This would allow auditors to easily verify the accuracy of financial records and identify any discrepancies.

Blockchain technology also solves the double-entry bookkeeping system problem. Both companies can record their transactions directly into a joint register that can’t be altered or destroyed because it’s cryptographically sealed. This makes auditing easier and saves time and cost.

accounting trends: block chain technology

Source: Deloitte

5. Cybersecurity

Accounting firms deal with sensitive financial information, making them prime targets for cyber attacks. At the moment, there’s a prevalence of cyberattacks. The financial services industry had the second-highest number of data companies in 2023, with 744 compromises, according to an ITRC data breach report. Also, the number of reported data compromises in the US was the highest ever.

As a result, cybersecurity has moved from being an IT issue to a core business concern for accounting firms of all sizes. Firms must prioritize robust cybersecurity measures to protect client data and maintain trust.

Some measures you can take include regular security assessments, employee awareness training, strong access controls, investing in advanced cybersecurity tools, and updating them when needed.

Abdullah Almaseed, the CTO and Co-Founder of Financial Cents puts it this way

It’s important to be proactive about protecting your data. Because the way a firm operates constantly changes, I’d encourage firms to reevaluate their policies on an annual basis in addition to when their processes change. For example, when introducing new technologies to the firm such as a new cloud application it is pertinent that firms update their policies to account for this change."

6. Data Analytics

Humans create about 2.5 quintillion bytes of data daily, and accounting firms contribute a decent portion of that data with their financial records, client information, and transaction data.

This makes data analytics an increasingly important skill for accounting professionals. Firms that invest in data analytics capabilities can gain a deeper understanding of their clients’ financial health, identify opportunities for growth, and provide more valuable advisory services.

Already, 59% of respondents in a data culture survey say finance/accounting is the most data-driven department in their company. In the near future, more firms and accountants will learn and offer data analytics services to stay ahead of the curve and deliver exceptional client experiences.

7. Green Accounting and Sustainability

As environmental concerns continue to rise, people have started holding businesses accountable for their impact on the planet. This has led to a growing trend in green accounting and sustainability.

Green accounting involves incorporating environmental factors into financial reporting. It goes beyond traditional financial metrics to measure the environmental costs and benefits associated with a company’s operations. This includes factors such as resource consumption, pollution, and waste generation.

Sustainability, on the other hand, focuses on meeting the needs of the present without compromising the ability of future generations to meet their own needs. Sustainable businesses strive to operate in a way that is both environmentally friendly and economically viable.

By adopting green accounting and sustainability practices, businesses can reduce their environmental impact, enhance their reputation, and improve their financial performance.

Green accounting and sustainability are not buzzwords; they are becoming essential components of business strategy. Accounting firms that can provide expertise in these areas will be well-positioned to meet their client’s needs and contribute to a more sustainable future.

8. Accounting Education and Skills Development

The skills required to succeed in accounting today are not the same as a few decades ago. While traditional accounting skills remain important, they’re no longer sufficient on their own. Today’s accountants need to be proficient in data analytics, understand emerging technologies like AI, cloud computing, and blockchain, and possess a working knowledge of accounting software like Quickbooks.

This necessitates significant changes in accounting education and professional development. For one, there have been updates to professional certification exams, such as the CPA exam, which now include sections on business analysis and reporting (BAR).

From now on, we expect to see that many accounting programs and universities adapt their curricula to equip students with these in-demand skills. Companies will also keep investing in continuous learning and upskilling initiatives to ensure their professionals stay ahead of the curve.

9. Remote and Hybrid Work

The COVID-19 pandemic accelerated the adoption of remote and hybrid work arrangements across various industries, including accounting. Even though 2020 saw the highest number of remote workers so far, at 70%, the current number of remote and hybrid workers in Q2 2024 is still higher compared to 2019, pre-pandemic, and has remained stable since Q2 2022.

This shows that remote and hybrid work arrangements have become a lasting trend in the accounting industry. Firms that embrace flexible work models and provide the necessary tools and support for their employees will be better positioned to attract and retain top talent.

10. Value-Based Pricing

Accounting firms and contractors are moving away from hourly billing models to value-based pricing. This allows them to price their services based on the value they provide to clients rather than the time spent.

Value-based pricing can benefit both accounting firms and their clients. For firms, it can increase their profitability and build trust with clients. And for clients, it can provide greater transparency and predictability in pricing, as well as a clear understanding of the benefits they are receiving.

Value-based pricing is a growing trend in the accounting profession. As clients become more demanding and competitive pressures intensify, firms that can effectively implement this approach will be well-positioned for success.

Future Proofing Your Accounting Firm

Here are some steps you can take to ensure your firm is ready and well-positioned for the future.

Embrace technology

Technology can give you a competitive edge, from cloud-based accounting software to AI-powered automation. So, invest in the latest tools and software to streamline operations, improve efficiency, and enhance client service.

Focus on data analytics

Train your staff on data analysis techniques and data analytics in your service offerings. It’ll help you uncover insights, identify opportunities, and provide more valuable advisory services to clients.

Offer specialized services

As the accounting landscape becomes more competitive, you have to differentiate yourself. Offering specialized services can attract new clients and position firms as experts in specific areas. Some niche areas include green accounting, forensic accounting, or international tax.

If you need help figuring out what services to offer, here are 15 client accounting services (CAS) to choose from and instructions on how to design and offer accounting advisory services.

Prioritize cybersecurity

Cybersecurity is a critical concern for accounting firms because they handle sensitive financial data. To protect your firm and clients from cyber threats, take security measures like firewalls, encryption, and employee training.

Foster a culture of continuous learning

The learning should never stop. Encourage your employees to attend industry conferences, take online courses, and pursue professional certifications. This will help them stay up-to-date on the latest trends and best practices. Here are some recommendations: workflow academy, 5-day email workflow course, and online accounting courses with certificates.

The only way to not get left behind is to stay informed on what’s happening and adaptable to change. By doing so, you’ll be better equipped to navigate the future, meet client demands, and ensure the long-term success of your accounting practice.

Remember, the accounting profession is dynamic, and the firms that thrive will be those that are proactive, innovative, and responsive to the changing needs of the market.

If you need a platform already offering the tools and resources to future-proof your accounting or bookkeeping firm, try Financial Cents.

Our software is cloud-based, which makes collaboration with clients and team members easier. It also has workflow automation capabilities like requesting documents from clients and setting automated reminders, which saves you a lot of time that you can then redirect to more strategic activities.

In conclusion, the future of accounting is bright for those who are willing to adapt and embrace change. By understanding and leveraging the key trends discussed in this article, accounting firms can position themselves for success now and in years to come.

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