Trends in Accounting: What Businesses Need to Know to Stay Competitive

As businesses face increasing pressure to remain competitive, they must rely on data analytics to drive growth and success. And who better to lead the charge than accounting professionals? With their expertise in finance and experience working with data, accountants are perfectly positioned to take on new roles and responsibilities that leverage data analytics, Artificial intelligence, and a new pack of human skills to drive better decision-making.

Here are the 6 most important trends making an impact in the accounting industry.

Cloud-based software

Due to the increasing demand for remote and hybrid work, the adoption of cloud-based accounting software has surged among accounting firms to manage their client's financial data.

Cloud-based solutions provide flexibility, allowing teams to collaborate seamlessly and access data from anywhere, with real-time updates.

The scalability of cloud accounting software also offers a cost-effective solution for growing accounting firms to expand their operations. Accounting firms can access powerful tools and services, such as automation and data analytics, which streamline their operations and boost their productivity. As a result, they can focus on providing higher value-added services to their clients and ultimately achieve their business goals.

Data analytics and forecasting tools

Data analytics and forecasting tools are imperative in transforming vital internal data sets into dynamic, actionable insights, from estimating future revenue with greater accuracy to identifying cost savings opportunities based on historical financial data and finding where costs can be reduced. With these valuable insights, businesses are set to develop strategies that improve profitability.

In short, by incorporating data analytics accounting firms can:

• Identify operational inefficiencies
• Develop accurate forecasting models
• Collect valuable financial insights
• Track clients' progress

As most industries are expected to embrace data analytics by 2023, the demand for data specialists will likely increase in the coming years. According to the Bureau of Labor Statistics, the employment of market research analysts and marketing specialists, which includes data specialists, is projected to grow 18% from 2020 to 2030, much faster than the average for all occupations.

Accounting automation and AI

The accounting industry has been transformed by automation and artificial intelligence (AI) over the past decade. Tasks that used to take accountants hours to complete can now be done in a matter of minutes, if not seconds. This has freed up accountants to focus on higher-level financial analysis data and help in strategic decision-making.

Furthermore, by automating routine tasks, the risk of human error is minimized, and the chances of mistakes that can be costly for businesses, are drastically reduced. This saves time and helps accounting firms build a reputation for reliability and accuracy, client trust, and retention.

Luckily, the adoption of cloud-based accounting systems has made it easier for accountants to integrate automation into their workflow and leverage the power of AI tools.

Offshore Staffing in Addition to Remote Work

According to a recent survey by the Pew Research Center, approximately 76% of remote workers have no intention of returning to the office. In comparison, 60% of office workers with work-from-home capabilities wish to work remotely all or most of the time. This leaves us with almost no choice but to go remote.

Remote work has proven to increase productivity, lower overhead costs, and improved work-life balance. With the right technology and guidelines in place, remote workers can access the same tools and resources as their in-office counterparts, ensuring efficient work performance regardless of their location. All this without the added costs of local expenses, office space, and other benefits like transport.

Hand in hand with remote work, offshore staffing has become an attractive solution for most accounting firms to hire top talent without the high costs of local hiring. Offshore staffing allows companies to tap into a larger pool of candidates and access top-notch talent from regions such as Latin America.

This way, accounting firms can significantly reduce expenses while maintaining high-quality standards. This approach can help businesses remain agile and competitive in a rapidly changing market.

Data security

As technology continues to evolve, so do the tactics of cybercriminals. Financial data is a prime target for attacks, and accounting departments are often the first line of defense. Unfortunately, data breaches are now more prevalent than ever before, posing a significant risk to companies of all sizes. These breaches can result in the theft of sensitive financial data, including credit card information and personal data.

Accounting teams need to be trained in recognizing and preventing cyber attacks. This will enable them to become experts in cybersecurity within their organization and play a critical role in preventing data breaches and securing sensitive financial data.

From Bookkeepers to Decision-Makers

Accountants are no longer just number crunchers; their roles are evolving to encompass a more significant decision-making role. This shift is driven by the need to leverage data analytics to provide strategic insights and enhance financial performance. Here are two key ways accountants' roles are changing:

• Expanded accountant's skill set: The future of accounting will see more transactional work becoming automated, freeing up accountants to take on more strategic and leadership-focused responsibilities. This means that accountants will need to develop a broader skill set, including emotional intelligence, leadership, and communication skills, to be effective decision-makers.
• Bigger accountant's role: Around 51% of accounting experts believed they could gain leverage in a competitive market by expanding their services from bookkeeping to business forecasting, competitor analysis, and assisting clients with decision-making. To do so, accountants must adopt sophisticated data analytics and visualization tools to turn unstructured data into meaningful insights.

Embracing Technology and Change

No doubt, the future of accounting is set to be both exciting and challenging. Automation and artificial intelligence will continue to transform the industry, leaving many traditional accounting tasks in the hands of machines. This will lead to new opportunities for accounting professionals to take on more strategic and leadership roles within their organizations.

As we move towards the future, it's clear that the role of accountants will become increasingly important in driving business success. From data analysis to decision-making, accountants will play a crucial role in helping companies navigate a rapidly evolving marketplace.

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Kevin Mitchell, CPA

Senior Manager and CPA with over 20 years of experience in accounting and financial services, specializing in risk management and regulatory compliance. Skilled in managing audits and leading teams to deliver exceptional services. Proud father of two.

🔗 Kevin Mitchell | LinkedIn