As we begin 2023, the effects of the pandemic continue to influence the business world. Trends in finance and accounting are changing as the world adjusts to new conditions. Companies are struggling with the current economic climate, accounting and finance professionals are faced with the challenge of remaining relevant in their field. To stay on top of the accounting and finance industry, it is important to stay abreast of emerging trends. Accounting firms and professionals need to know about the accounting sector, accounting processes, accounting technology, emerging accounting trends and cloud-based accounting software.
Forbes and Insider Intelligence have predicted that 2023 could be a breakthrough year in the financial landscape, with some remarkable trends expected to emerge. For example:
- A majority of Generation Z consumers (71%) believe that companies should aid them in achieving both their personal and financial aspirations.
- Financial institutions are broadening their services to embrace gig workers, as digital freelancing is predicted to produce a staggering $455 billion globally by 2023.
- Central banks are taking the initiative to bridge the gap between decentralized finance and conventional finance by exploring digital currencies.
In this Article:
What are accounting trends?
Accounting trends refer to the changes and innovations in the accounting sector that accounting professionals should know about. These trends include accounting processes, accounting technology, accounting firms, accounting software, and emerging accounting trends. Trends can range from robotics process automation (RPA) in accounting to cloud-based accounting software.
What are the recent trends in accounting?
1. Automated accounting processes
These are new trends in finance and accounting that are becoming the norm for accounting firms and accounting professionals. Accounting professionals can accomplish critical financial processes faster and more efficiently by automating accounting processes. Automation also allows accountants to analyze business operations and access financial data quickly.
2. Cloud-based accounting software
The accounting profession is rapidly transitioning to cloud-based accounting software. This technology allows accounting firms to securely access and store financial data in the cloud, offering accounting services from any location with an internet connection. For Automation to be successful, the data from multiple sources should first be unified and standardized for harmonization. This involves combining structured, semi-structured, and unstructured data into one system. Artificial Intelligence requires data that is well organized, harmonized and structured to provide actionable insights.
3. Outsourcing accounting functions
Outsourced accounting is also one of the trends in finance and accounting. These functions eliminate the need to hire and train accounting staff, freeing up accounting professionals’ time and resources to focus on higher-value accounting tasks. Outsourcing accounting also provides accounting firms with valuable financial data that can be used to maximize efficiency and improve the accuracy of accounting processes.
4. Environmental, social and corporate governance
Environmental, Social, and Corporate Governance (ESG) will take center stage for companies. It’s predicted that there may be new federal rules in relation to the areas within ESG – especially when it comes to financial disclosures of public entities. These divulgences are probable to include mandated disclosure of climate-related economic risks and greenhouse-gas emissions from your operations as well as those found in your supply chains. Accountants will be in the perfect position to provide the necessary guidance on accurately reporting on these regulations’ financial impact.
5. Role of Artificial Intelligence (AI)
Artificial Intelligence (AI) is growing in popularity as more people realize its potential to revolutionize the accounting sector. AI can be used to automate repetitive and manual accounting tasks, freeing up time for accountants to focus on more complex areas. Across businesses, there is a belief that AI will revolutionize finance and accounting for the better.
Take EY, the accounting firm, for example, they have incorporated AI into the analysis of lease contracts to streamline data gathering on the commencement date, payment amount, and termination or renewal prospects. This trend in finance and accounting allows finance professionals more time to make decisions with said information instead of sifting through it endlessly.
6. Data analytics and forecasting tools
Accounting is a crucial part of any business success story and the use of budgeting, forecasting, and planning software, as well as data analytics and visualization tools, can be incredibly beneficial. As technology becomes more advanced, finance functions are becoming increasingly analytical. This allows accounting departments to not just react but actually anticipate potential issues or opportunities before they arise. By implementing these strategies in your organization you can remain one step ahead. IMA recently rolled out a Data Analytics & Visualization Fundamentals Certificate to demonstrate the need for tech-savvy and analytical accountants. This program equips finance professionals with essential critical thinking, problem-solving abilities, and technology skills to use to further business strategies.
7. Digital transformation
Digital transformation is one of the trends in finance and accounting that all accounting firms must consider moving forward. In this digital era, it’s critical for accounting firms to take advantage of cloud-based accounting software solutions, with the ability to manage financial data and accomplish critical financial processes securely. Automating accounting and finance processes, utilizing cloud-based software, and outsourcing accounting functions are all great strategies to adopt in order to achieve digital transformation.
Finance and accounting firms use methods that can handle profits brought by new models like subscriptions, channels, and physical or virtual products among many others. One of their major struggles is utilizing advances in technology to keep up with business strategies while being flexible enough for ever-changing conditions.
8. Workplace wellness
Employers are increasingly offering workplace wellness programs as an employee benefit, yet managing these plans can take time and effort for accountants. For instance, payroll personnel and bookkeepers must ensure that the discounts employees get through their wellness initiatives are accurately calculated within paychecks. In addition, accountants need to stay up-to-date on tax laws modifications regarding how anything in connection with the health initiative can affect business deductions from taxes. Wellness programs not only have the potential to improve employee health, but are also a fantastic way to boost engagement. Accountants should take advantage of these resources since they often experience high levels of stress and fatigue from juggling multiple tasks at once.
9. Online collaboration and remote workforce
With the pervasive trend of working remotely, cloud-based software is the perfect way to stay connected and ensure everyone is on the same page. Accounting requires collaboration tools like Zoom, so robust functionalities in the form of e-signature solutions. and cloud file sharing must also be taken into consideration. This allows accounting teams to easily accomplish critical financial processes from anywhere and makes it easier to analyze business operations.
10. Evolution of the accountant role
To be successful in the field of accounting and finance, future professionals must lean into their emotional intelligence and further hone soft skills like leadership. Coupled with training to leverage insight from data analysis and financial expertise, these attributes will set you up for a prosperous career ahead. Transactional work is becoming increasingly automated, emphasizing that accountants should strive to become decision-makers rather than simply transactors. Suppose accounting professionals are able to learn and adapt to the new accounting technology. In that case, accounting firms can be well-positioned to take advantage of emerging accounting trends and deliver efficient accounting services.
11. Data security
Data breaches pose a massive threat, and finance departments face an especially large risk. Unauthorized access to confidential financial and personal information can have severe consequences. criminals commit identity theft by stealing personal information or credit card details while spoofing email messages to appear as though they come from reliable sources.
To combat this, accounting and finance professionals must take steps to protect private data by implementing security measures that meet industry standards, like two-factor authentication. Accounting teams must also acquire the necessary training in recognizing malicious emails and spotting these attacks. Accountants have the potential to become stalwart advocates for cybersecurity within your organization, and lead by example in promoting its importance.
12. Changes in Tax Policy
In accounting, staying abreast of the latest changes in tax laws is essential. Accountants must know how to file tax returns, calculate deductions, and manage other tax accounting tasks to ensure that their clients remain compliant in the eyes of the IRS. In addition, changes to accounting regulations and standards can have a significant impact on accounting firms. For example, recent changes to accounting for leases could affect how businesses record their assets and liabilities. Professionals must stay up-to-date on accounting and tax trends to offer the most accurate advice.
13. Statutory and regulatory compliance
Aside from taxes, accounting firms must also be aware of accounting and compliance regulations. This includes staying current on accounting technology that helps to facilitate compliance with data privacy laws, such as the GDPR. Accountants also must update accounting standards such as IFRS and US GAAP, to reflect changes in accounting practices. The accounting profession is ever-changing, and accounting professionals must stay on top of the latest accounting trends and regulations to best serve their clients.
Conclusion
Accounting is a profession filled with many challenges. Still, accounting professionals who adopt the latest accounting technology and trends can stay ahead of the competition and help their accounting firms remain competitive. Being ahead of the curve is crucial for businesses to survive and even thrive. To help you stay ahead of the curve, we’ve compiled a list of the top 13 trends in finance and accounting for 2023. From environmental, social, and governance reporting to data analytics, these are the areas you need to focus on in the coming year.
