Key Takeaways:
- Stay ahead in accounting by adopting technologies like cloud-based systems, automation, AI, and data analytics.
- Explore new trends like blockchain, forensic accountancy, and advisory services to enhance your expertise and stay competitive.
- Adapt to the changing landscape with remote work, outsourcing, and a keen awareness of dynamic accounting standards.
The FinTech sector is evolving rapidly regarding systems and business processes. The increase in the Fintech industry earnings is expected to surge from $245 billion to $1.5 trillion by the year 2030, marking a sixfold growth.
If you are a chartered accountant or looking for accounting software for your business, it is crucial to stay updated about the emerging trends in accounting.
Looking for Accounting Software? Check out SoftwareSuggest’s list of the best accounting software solutions.
We will discuss about 13 emerging trends in accounting to help you plan your strategy for the days to come! Let’s begin.
What Are Accounting Trends?
Accounting trends refer to the ways in which the accounting profession evolved due to the changes in the environment, technology, and other market forces. These changes have been driven by the pandemic, with a few major developments, including a rise in the use of cloud-based accounting software and a growing reliance on automation and artificial intelligence.
Stay ahead in the FinTech-driven industry by embracing emerging trends. Prioritize understanding cloud-based accounting, automation, AI, and data analytics. Explore blockchain's potential, delve into forensic accountancy and leverage advisory services. Adapt to remote work settings, consider outsourcing, and keep abreast of dynamic accounting standards.
The Top Accounting Trends
Accounting trends continuously evolve, driven by technological advancements, regulatory changes, and shifting business paradigms. To keep up with advances in the market, it is essential to learn about these trends. So, let’s take a look at the top thirteen accounting trends.
1. Automated Accounting Processes
One of the uses of accounting automation is Accounts Payable / Accounts Receivable (AP/AR). Accounts Payable (AP) is what your company owes to vendors in the form of credits. Accounts Receivable (AR) is the money that your customers owe you on credit. Automation helps you in the following ways:
Accounts Payable:
- Extract data from all the invoices.
- Compile data in a cloud database.
- Forward invoice information to vendors for sign-off.
- Process payments on time.
Accounts Receivable:
- Automatically deliver the initial invoice to customers.
- Send late payment reminders to clients
- Collect payments securely.
- Deposit the money directly into your bank account via electronic transfer.
So, if you have not yet invested in automated accounting systems, it is time to reap the benefits of technology.
2. Cloud-based Accounting
It is one of the most popular accounting services that every business wants to adapt to its systems. In cloud-based accounting systems, you can maintain your business books online. The data is encrypted, and only people with valid credentials can access it.
The benefits of cloud accounting software can take your business to the next level! Some of its benefits include:
- Data related to your sales or revenue is imported from your bank account to the cloud server automatically.
- You can view your current financial status from anywhere in the world.
- Multi-user access helps you collaborate online with your team members and advisors in real-time.
- The dashboard shows significant financial information using easy-to-understand graphs and reports.
Thus, the possibilities are endless once you start using cloud-based accounting solutions.
3. Data Analytics and Forecasting Tools
Data analytics is not one of the current trends in accounting, but it has become more powerful than ever before. Businesses and accounting firms use such tools for budgeting, tax consulting, risk management, and auditing.
We can say that Accounting data analytics and visualization tools have made finance functions more analytical. Moreover, businesses are increasing their efficiency and managing risks with ease by leveraging the power of data analytics.
4. Accounting Software Solutions
Online accounting software comes with a host of integrations and helps expedite routine processes. Also, it uses RPA (Robotic Process Automation) to standardize transactional data from multiple sources in multiple formats. This process is also known as harmonization.
Large-scale enterprises opt for Enterprise Resource Planning (ERP) software instead of standalone accounting software. Such systems provide enterprises with the following features in addition to an accounting module:
- Procurement
- Order Management
- CRM
- Supply chain management
- Inventory management
- Logistics
- Human resource management
5. Blockchain
Blockchain is one of the recent trends in accounting due to its direct relationship with ledgers. The primary role of blockchain is to maintain a ledger account containing financial statements. It is also responsible for the transfer of the ownership of assets in a secure and verifiable manner.
Many people believe that the decentralized nature of blockchain makes it vulnerable to data security risks. But it is not correct.
All big organizations are exploring the implementation of blockchain in their financial processes. For example, Walmart and other similar retail giants have already experimented with beta blockchains in their supply chain.
Thus, blockchain will be a game-changer for accounting professionals soon.
6. Forensic Accountancy
Forensic accountancy is one of the latest trends in accounting and techniques, and not many people know about it. Forensic accountants work within law enforcement agencies or private auditing firms to investigate and prevent money laundering activities and other financial crimes such as fraud and corruption. They have the skills and knowledge in accounting, criminal and civil law, and IT.
Forensic accountants can protect your business from scams and save you from losses amounting to billions of dollars.
7. Advisory Services
Industry analysts predict one of the future trends in accounting would be to combine technology and financial advisors. Such a hybrid approach can help accountants get access to deeper insights using data analysis.
Automation cannot replace humans entirely, especially in accounting. However, using advanced technologies in the accounting industry can enhance the service quality of accounting firms. Advisory firms can use robotic process automation (RPA) and AI to understand client intent in a better way and offer tailored advice.
8. AI in Accounting
Artificial Intelligence has a positive impact on the accounting industry. It can analyze large volumes of data at high speed and with a high level of accuracy. AI can also optimize administrative tasks, financial data, workflows, and accounting processes that result in various structural changes for a business.
Many companies use AI and robotic process automation (RPA) to automate routine, highly repetitive tasks. It helps accountants to focus their time on other significant activities.
9. Big Data in Accounting
Big Data plays a crucial role in the accounting industry. It supports companies and CPA firms through expanded assessment methods. Finance professionals can use big data to identify which collected data are the most valuable and then convert them into actionable insights.
CPAs equipped with the knowledge of big data can focus more on analyzing processes, taking positive control of the systems, and forecasting problems before they can happen.
10. Remote Work Setting
In the post-COVID world, an accounting firm is having a hard time recruiting top talents. They must broaden their candidate search and hiring criteria. Nowadays, most potential candidates want to work in a remote work setting.
Accounting leaders have adapted to the pandemic and allowed employees to engage in remote work. Cloud-based accounting software allows distant teams to collaborate and accomplish critical financial processes. It can include a month-end close or filing e-turns of income tax. Online collaboration tools such as Zoom and functional collaboration tools for cloud-based file sharing have made things easy for everyone.
11. Outsourcing of Accounting Functions
Outsourcing allows companies to focus more on their limited resources, thus increasing their profitability. It also saves them employment costs like taxation, payroll, insurance benefits, and induction expenses.
Outsourcing is now a profitable business model for CPA firms to deliver efficient services to their clients. Some firms go further to analyze business operations and add more value to the client’s business.
It is expected that businesses will give priority to Environmental, Social, and Governance (ESG) factors in light of the possibility of new federal rules, which will likely center on financial disclosures for publicly traded companies.
It is believed that these mandatory disclosures will address financial risks associated with climate change and greenhouse gas emissions from the activities and supply chains of the corporations. Furthermore, major investors are pushing for greater diversity in a number of corporate domains, like accounting and finance. Accountants are receiving support from professional trade associations to prepare for these developments.
13. Workplace Wellness
Workplace wellness programs are a popular benefit that firms provide, but managing them presents a complex task for accountants. Payroll managers and accountants are responsible for making sure that the health insurance reductions that employees receive through such initiatives are accurately calculated and appropriately reflected in their paychecks.
Accountants also need to be aware of any changes to tax legislation that may affect how some wellness program goods are classified as tax-deductible business costs. Wellness initiatives can improve workers’ health and increase engagement among staff members. Accountants should take advantage of opportunities to use such programs when they are available, as they frequently report high levels of stress and burnout related to handling a multitude of tasks.
You May Also Read: Accounting Practice: Definition, Types, and Principles
The Bottom Line
So, these are the thirteen trends that will drive the future of accounting technology.
In an ever-evolving business environment, keeping pace with the latest accounting technology trends will not only help you make the best business decisions but take your business to the next level.
So, you should not refrain from embracing the accounting trends that are molding the future of the accounting sector worldwide.
Amaey Anand is a certified accountant with over 10 years of experience in the finance industry. He has worked with various organizations to streamline their petty cash management processes and reduce inefficiencies. He has also written several articles on financial management for leading publications such as Zensuggest and The Wall Street Journal.
