To understand the significant changes happening in the accounting field, take an evaluation at the recent updates to the CPA exam. The well-established licensing standard, in use for over a century, has now shifted its focus. The emphasis is on grasping business processes, automation, sustainable reporting, data analytics, and the importance of a digital & data-driven mindset. Alongside this, certain topics like the distinction between IFRS and GAAP standards and specific knowledge about estate taxes and trusts have been phased out. These adjustments reflect the evolving landscape of the accounting profession.
What Are Accounting Trends?
Accounting trends are progresses and outcomes to changing environment, technology and other market forces that outline the accounting profession as we know it at present.
How is the accounting industry changing? The pace of change is swift, largely propelled by rapid technological advancements and the environmental impact on our planet.The pandemic has notably hastened this adoption, evidenced by the increased utilization of cloud-based accounting software and the transition towards automation and artificial intelligence.
1) Technology and Automation
Continuous technological advancements and the increasing automation of routine accounting duties are among the notable trends reshaping the accounting perspective, offering exciting prospects for industry professionals.Several tasks are undergoing automation, such as streamlining approval workflows, implementing e-invoicing systems, and reconciling bank statements. Additionally, processes like journal entries, inter-company consolidation, revenue recognition, lease accounting, and depreciation are being automated to enhance efficiency and accuracy. These advancements aim to streamline operations and reduce manual workload, enabling accounting professionals to focus on more strategic and value-added activities.
Although numerous accounting tasks can be automated, there exists a gap in comprehension of the technologies and availability of resources for their implementation. However, those who embrace these advancements are experiencing significant rewards. Around 70% of companies achieving automation in over a quarter of their accounting tasks indicate experiencing moderate to significant return on investment (ROI).
2) Role of Artificial Intelligence (AI)
Across industries there’s consensus that AI is having a significant impact on finance and accounting. Businesses are leveraging AI and robotic process automation (RPA) to streamline routine, repetitive tasks, enabling accountants to dedicate their efforts to more impactful and valuable endeavors. Accounting Firm EY, for example, has applied AI for analyzing the lease contracts, thereby making it easier to capture information quickly on commencement date, amount to be paid, termination or provide renewal choices and empower finance professionals to devote more time to data-driven decision-making rather than searching for information.
3) Accounting Software
In order for Robotic Process Automation (RPA) to achieve success, it is imperative that transactional data is standardized and integrated from various origins, a process often referred to as harmonization. This harmonization entails the consolidation of structured, semi-structured, and unstructured data into a unified system. Furthermore, Artificial Intelligence (AI) relies heavily on extensive datasets for optimal functionality. Ultimately, the outputs generated by all enabling technologies must instill confidence in accountants.That’s where accounting software comes in.
Approximately 36% of businesses are gearing up to integrate cloud-based accounting solutions soon. Through enterprise resource planning (ERP) systems, you can seamlessly merge your accounting software with critical business functions like supply chain and production management. By amalgamating data from various departments, an integrated ERP platform empowers you with deeper insights for informed decision-making across your organization.
4) Data Analytics and Forecasting Tools
Among the accounting tips for both small businesses and larger companies, increasing the use of budgeting, forecasting, and planning software, data analytics and visualization tools are one of the most impactful ones. Finance functions are becoming significantly more analytical – and technology will help push the accounting and finance department from reactionary and transactional mode to proactive and analytical mode. The launch of the Data Analytics & Visualization Fundamentals Certificate by IMA underscores the growing need for accountants with advanced analytical and technological skills. The program is designed to equip accounting and finance professionals with the strong critical thinking, problem-solving and technological skills needed to advance business strategy.
5) Digital Transformation
Organizations are swiftly embracing digital technology, revolutionizing their business operations, with accounting and finance teams leading the charge. They’ve implemented strategies to accommodate revenue from diverse sources like subscription models and expanded product offerings. Utilizing technology effectively is crucial to aligning with business strategies and navigating evolving market dynamics. However, amidst this transformation, it’s crucial to leverage technology to support business strategies while staying compliant with ever-changing regulations.
6) Workplace Wellness
Employers increasingly offer workplace wellness programs, yet the management complexities can overwhelm accountants. Payroll managers and accountants must accurately compute health insurance discounts from wellness programs as withholdings in payrolls. Moreover, they must stay vigilant about tax law alterations affecting the tax-deductible status of wellness program items. Apart from potentially enhancing employee health, wellness initiatives serve as valuable tools for boosting engagement. Given the persistent challenges accountants face, including burnout and stress, leveraging wellness programs becomes imperative for their well-being.
7) Free Product or Service Tour
Online Collaboration and Remote Workforce – Particularly beneficial amid the rise of remote work, cloud-based software enables geographically dispersed teams to collaborate seamlessly and handle essential financial tasks, including month-end close, from any location with just a computer and an internet connection. Accounting will need collaboration tools, such as Zoom, G-meet, DocuSign, fort and functional collaboration tools for e-signature and cloud-based file sharing. In this innovative trend sweeping the industry, companies are offering decision makers like you the opportunity to experience their products or services firsthand, completely free of charge. Gone are the days of relying solely on sales pitches and demos. Now, you can test the authenticity and trustworthiness of accounting solutions right from the comfort of your office or home. With options available globally the Free Product or Service Tour allows you to take a test drive before making any commitments.
8) Evolution of the Accountant Role
As accounting undergoes transformation, automation is poised to revolutionize transactional tasks, elevating accountants into pivotal roles as leaders and decision-makers. The future demands a shift towards harnessing soft skills like emotional intelligence, underscoring the need for accountants to navigate complex scenarios with astuteness and empathy. These skills, paired with training to leverage insight from data analysis and financial expertise, are what will make for successful careers in the future.
9) Data Security
The escalating threat of data breaches poses a significant risk to finance departments, making them prime targets for cyberattacks. These breaches can result in various forms of identity theft and the unauthorized access of sensitive personal and financial information. It’s imperative for accounting teams to receive ongoing training in identifying and mitigating potential cybersecurity threats, leveraging their keen eye for detail and anomaly detection skills. By championing cybersecurity awareness and best practices, the accounting team plays a pivotal role in safeguarding the organization’s data integrity and reputation.
10) Changes in Tax Policy
Steering through the nuances of the 2022 Consolidated Appropriations Act, commonly referred to as the COVID stimulus, poses a significant challenge for accountants. Spanning nearly 6,000 pages, this legislation, enacted just before the tax season, adds to the complexity of an already dynamic tax landscape. With provisions such as tax extenders, PPP expense deductions, second-draw PPP loans, and simplified processes for smaller PPP loans, accountants must stay abreast of evolving tax policies to ensure compliance and optimize tax strategies for their clients. Understanding these changes is paramount for effectively managing total tax liability and adapting to shifting trade and tariff regulations.
11) Statutory and Regulatory Compliance
In addition to tax matters, accounting and finance teams must remain vigilant about evolving statutory and regulatory shifts. In 2024, Statutory and Regulatory Compliance will become increasingly prominent within the accounting industry. This trend signifies the growing emphasis placed on adhering to legal requirements and industry regulations governing financial reporting, taxation, and business practices. From staying abreast of changing tax laws to implementing stringent data protection measures mandated by regulatory bodies, such as HMRC, MTD & FRC, accountants are playing a pivotal role in safeguarding organizational integrity and transparency.
Moreover, with the emergence of new regulatory frameworks and compliance standards, such as IFRS, accounting trends in the UK are witnessing a shift towards proactive compliance management. Firms are investing in advanced technologies, automation tools, and specialized expertise to streamline compliance processes, mitigate risks, and ensure regulatory alignment across all facets of financial operations. In essence, Statutory and Regulatory Compliance is not merely a regulatory burden but a strategic imperative driving organizational resilience, trust, and sustainability in the dynamic landscape of UK accounting in 2024.
12) Environmental, Social and Corporate Governance (ESG)
ESG is in sharp focus for companies, with environmental sustainability, social responsibility, and ethical governance at the forefront, ESG considerations have become integral to financial decision-making. Recent studies indicate that over 70% of investors prioritize ESG factors when evaluating investment opportunities, highlighting the increasing significance of ESG in driving financial performance and risk management strategies. In response, accounting professionals are adopting ESG reporting frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) and Sustainability Accounting Standards Board (SASB) to provide stakeholders with transparent and comprehensive insights into their organizations’ ESG performance. Beyond regulatory compliance, embracing ESG principles fosters long-term value creation, enhances stakeholder trust, and strengthens corporate reputation, positioning businesses for sustainable growth and resilience in a rapidly evolving market. As ESG continues to gain momentum, accounting professionals play a pivotal role in integrating ESG considerations into financial reporting, strategy formulation, and risk assessment, driving positive societal impact and contributing to a more sustainable future. Furthermore, prominent investors are advocating for heightened diversity, a factor that resonates across various sectors of your business, encompassing finance and accounting. Professional associations are striving to assist accountants in readiness for these shifts.
13) Accounting Standards
Amidst the dynamic landscape of finance, the Financial Accounting Standards Board (FASB) consistently releases updates throughout the year, detailing changes that may impact financial statements and ensure their compliance with GAAP. In 2024, the implementation and adherence to accounting standards have never been more crucial in the accounting industry. According to recent studies, approximately 40% of firms faced legal or regulatory troubles due to negligence in following accounting standards. As regulatory bodies continue to evolve accounting standards to reflect changes in the business landscape, companies must prioritize staying up to date with these updates to ensure accurate financial reporting and compliance. Failure to follow these standards meticulously can result in severe consequences, including financial penalties, reputational damage, and even legal ramifications. By focusing on implementing and following the latest accounting standards, companies can enhance transparency, credibility, and trust among stakeholders, ultimately fostering long-term sustainability and resilience in today’s dynamic business environment.
14) Proactive Accounting
Machine learning and robotic process automation (RPA) are revolutionizing the accounting landscape. Continuous accounting, driven by automation and technology, integrates tasks typically performed at period ends into daily operations. Beyond alleviating late-night workloads, continuous accounting enhances efficiency and data accuracy, allowing teams to devote more time to value-added activities. By fostering a culture of continuous improvement and process optimization, organizations can leverage their accounting resources more effectively.
15) Outsourcing
Outsourcing finance and accounting functions presents advantages for businesses across the board. Small companies opt for it to sidestep the need for extra hires, while larger enterprises leverage it to trim costs, especially in accounts payable. Whether it’s streamlining operations or optimizing resources, outsourcing offers a strategic approach to financial management that drives efficiency and savings for organizations of all sizes. Additionally, it can grant access to skill sets, technology, and expertise your company might struggle to replicate affordably in-house. As we move into 2024, outsourcing remains a vital trend in the accounting industry, offering myriad benefits to professionals. Recent data reveals that about 65% of accounting firms have reported increased efficiency and productivity through outsourcing various accounting tasks. With accounting processes becoming more complex, outsourcing provides a strategic solution for firms to streamline operations and focus on core competencies. Fourfold UK stands as a reliable partner, delivering tailored outsourcing solutions to meet diverse accounting needs. Our team’s expertise, coupled with the latest technological advancements, ensures seamless integration and efficient execution of outsourced tasks. Embracing outsourcing with Fourfold UK enables accounting professionals to harness cost savings, access specialized skills, and enhance overall competitiveness in 2024.
2024 will continue to allow accountants to showcase their resilience and their indispensable role in the business. They’ll adapt to and adopt trends to help guide and lead their businesses into the next phase of whatever the business journey entails.
