The needs of today's clients push the modern accountant to go above and beyond standard services. Cloud based accounting software, for example, has helped the profession and the accountant's position evolve by enabling them to concentrate on strategic, value-adding duties. This article analyzes the market drivers and developments, including automation and AI to data security, that are pointing to the future of accounting. Professionals will stay competitive in their sector and be motivated to innovate for the benefit of their company and their clients if they are aware of these trends.
1. Decline In Accounting Software Spend
The pandemic led to an increase in customer expectations for a diverse range of services beyond conventional offerings. In response to these challenges, accountants are transitioning from traditional service models to adopting innovative technologies. 62% of technology purchasers in September 2020 indicated they anticipated spending the same amount on accounting and finance tools, while 18% said they would spend more, and 15% predicted they would spend less. Finance was one of the top 10 categories in which firms anticipated to spend less on technology in 2021 with 21% of organizations expecting to do so.
2. Accounting Software Integrated With ERP
Accounting software has a high-value network in the market today and is projected to reach $19.56 billion by 2026 which is a big number. ERP systems enable businesses to integrate accounting and financial data with other aspects of their operations, enhancing productivity and teamwork. It still has some drawbacks, though.
3. AI For Accounting
The use of cutting-edge technologies like artificial intelligence, machine learning, blockchain, and automation has accelerated as a result of the COVID-19 epidemic. Data indicates an 11% increase in utilization between the pre-COVID phase of 2020 and the start of the pandemic, where AI implementations have already been made. To have reliable business intelligence, organizations must extract high-quality data. They should also follow the model of digital leaders, who are four times more likely to properly utilize their data.
4. More Emphasis On Data Security
Cybercriminals continue to undertake malicious attacks despite the pandemic, putting the financial information handled by accountants in danger. Accountants can use good data collecting and management by applying security best practices. Cloud based accounting software purchasers and corporate leaders are more aware of security aspects.
5. Utilizing Accounting Data For Insights
Businesses are spending money on data analytics and visualization tools, which will change the way accounting and finance professionals process data from transactional to analytical. To adapt to this transformation, one needs analytical thinking and problem-solving abilities.
6. Accountant As Partner Of Businesses
Accountants are required to perform duties beyond the standard ones like bookkeeping and data analysis. The ability to think strategically, use technology, and provide business advice is considered to be crucial qualities for modern accountants. These abilities will enable them to serve as business counselors, which aids enterprises in expanding their operations. Moreover, they can become an accounting software partner and promote efficient accounting practices.
7. Accounting Automation As The New Standard
Companies with a high volume of transactions and client-facing operations can automate a considerable portion of their accounting tasks. Automation is increasingly expected by finance professionals and business leaders as a standard component of their operations. Close to 50% of processes are still manual and less than a third are largely automated.
8. Demand For Transparent Reporting
In times of crisis like the pandemic, transparent accounting reporting boosts investor confidence in a company. In addition to standard financial reports, investors are now examining firms' governance, social, and environmental performance. Board involvement, selecting the best reporting technique, and making this information accessible is necessary for transparent reporting.
9. Keeping Accounting In-house For SMBs
Due to personnel flexibility, familiarity with industry standards, and ability to meet unique business requirements, the majority of small businesses keep their accounting in-house.
Accounting tasks are more likely to be outsourced by small enterprises with 50 or more workers and a minimum of one year in operation. When small enterprises seek to save costs, outsourcing accounting is sometimes used. This was especially prevalent during pandemics.
10. Accounting Standards And Regulatory Updates
Small firms and industries have received financial assistance from the CARES Act and the Coronavirus Response and Consolidated Appropriations Act, which includes an employee retention credit and a tax credit equal to 50% of earnings. In addition to existing aspects related to leases, reorganizations, debt securities, asset acquisitions, credit losses, variable interest entities, and banking regulation disclosures, the Financial Accounting Standards Board has suggested revisions to the taxonomy of US GAAP financial reporting. Tax repercussions will result from remote employment.
Accounting In New Era
In 2023 and beyond, there will be greater opportunities for accountants as well as obstacles because of increased customer demands, new regulations, and updated accounting standards. Accounting professionals may focus on providing value to clients by using new technologies like automation, artificial intelligence, and ERP integration to hand off monotonous and transactional tasks to machines. For accountants and businesses, optimizing technology will still be challenging despite decreased software spending and cost-cutting efforts that result in talent outsourcing.