Key Takeaways
- Automation, AI, blockchain, and cloud-based solutions are transforming the accounting sector, increasing efficiency and data security.
- To thrive in the changing world, future accountants must be proficient in sophisticated technologies, strategic thinking, adaptability, and good communication skills.
- The growing use of automation and AI reduces mundane accounting operations, freeing accountants to focus on higher-value activities like analysis and strategic planning.
Introduction
As the world becomes further immersed in the digital era, the accounting industry is changing dramatically. Developments in technology, regulatory changes, and shifting business environments are redefining how accountants work, bringing about several significant trends that will shape the future of accounting. In 2024, seven major trends are expected to dominate the industry. In this blog, we will explore these trends in detail and discuss the skills accountants will need to thrive in this ever-evolving landscape.
What does the Future of Accounting Look Like?
The accounting industry is rapidly changing, driven by advances in technology and the increasing adoption of automation and AI. The future of accounting entails accounting professionals leveraging technology at an accelerated pace to streamline their processes, improve accuracy, and provide better insights.
A common fear that is often seen among professionals is that technology might make their skill sets obsolete. However, adopting technology isn’t about drastically changing ways of working; instead, it’s about using tools that complement and refine existing processes to make accounting less manual and error-prone. For example, by leveraging AI-powered accounting solutions, businesses can seamlessly automate manual tasks such as journal entry, account reconciliation, and more. This allows accounting professionals to focus on higher-value strategic tasks.
What are Accounting Trends?
In today’s dynamic and highly competitive accounting industry, staying on top of current accounting trends has become important. These trends impact not only the daily tasks or responsibilities of accountants but also guide strategic organizational decisions. Accountants with informed knowledge of these modern accounting trends are in a position to provide enhanced service to their clients and make other valuable contributions toward organizational success.
7 Accounting Trends to Watch Out For in 2024 and Beyond
The accounting industry will continue to experience significant changes driven by technology, automation, and changing business landscapes. Here are the top seven accounting trends to watch out for in the years to come:
1. Automation
Accounting functions such as bank reconciliation, journal entries, inter-company consolidation, and revenue recognition can now be automated, freeing up accountants to focus on higher-value work. In the coming years, we can expect this trend to continue as more accounting tasks are automated and AI becomes more advanced.
2. Cloud-based accounting software
Cloud-based accounting software has transformed the way accounting is done, allowing for remote work and real-time collaboration. More and more companies are moving away from traditional, on-premise accounting software to cloud-based solutions.
3. Data analytics and forecasting tools
Data analytics and visualization tools, as well as budgeting, forecasting, and planning software, are increasingly being adopted by accounting and finance professionals. These tools help accountants analyze data, provide insights, and make better decisions. Finance functions are becoming more analytical, and technology is driving the accounting and finance departments from reactionary and transactional to proactive and analytical.
4. Data security
With the rapidly growing occurrences of data breaches and cyberattacks, data security has become the most valued focus of the accounting industry. Protecting sensitive financial information is paramount, as any compromise can lead to significant financial loss, legal repercussions, and damage to a firm’s reputation. Moving into 2024 and beyond, accountants need to work on robust cybersecurity measures whereby encryption, multi-factor authentication, and regular security audits are implied. One will need to be updated on all new security threats and improvements in cybersecurity technology so as to be better positioned to secure data and achieve the goal of establishing trust with clients.
5. Analytics
Advanced analytics is changing the professional dynamic for the better, with improved decision-making and strategic planning. Performance of analysis on wide volumes of data to elicit meaningful insights will become one of the skills required to be possessed by accountants in 2024. Companies, aided by their analytics tools, are able to identify trends, forecast financial performances, and shed light on inefficiencies, thus placing them at an advantage. The accountant will need the skills to operate such tools and understand the output so meaningful recommendations can be made for the client or the organization. Embracing analytics is not only going to enhance the accuracy of financial reporting, but it will also support proactive business strategy.
6. Role of artificial intelligence (AI)
Artificial intelligence is going to have a huge impact in the future of accounting and will make a difference in how professionals conduct their day-to-day activities. AI can automate tasks like data entry, invoice processing, and reconciliation, greatly reducing the time needed by professionals for the same activity. Furthermore, AI-powered tools provide predictive insight that will help the accountant keep at par with financial trends and drive data-informed decisions. 2024 and beyond: AI in accounting will be integrated to bring improved efficiency, accuracy, and capability to advise strategically. Accountants need to stay current regarding AI developments and be ready to harness these technologies to improve services and add value to respective organizations.
7. Increasing statutory and regulatory compliance
Governments and investors are increasing their scrutiny, making statutory and regulatory compliance a paramount concern for accounting professionals. To stay compliant, accountants need to stay abreast of evolving tax laws, accounting standards, and financial reporting requirements. They must stay on top of constantly evolving laws and standards, which can vary significantly across different regions and industries. Additionally, the complexity and volume of regulations can lead to increased workloads and the need for more sophisticated tools and systems to manage compliance effectively.
What Skills Will Accountants Need in the Future?
The role of accountants has drastically evolved over the past few years. The changing times demand that accountants diversify their skill sets to stay relevant and succeed in this dynamic environment. Let us now look at some of the key skills that accountants should develop to become successful:
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Technical proficiency
With most accounting processes now being automated and integrated with AI, blockchain and cloud computing, the future accountants will have to be technically proficient and aligned in these technologies. Accounting professionals need to establish skill sets to easily manage and analyze financial data using advanced service tools and platforms.
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Analytical and strategic thinking
Accountants are expected to redirect their efforts towards tasks that require analytical and strategic reasoning for decisions-making, with technology reducing the time and effort they spend on routine tasks. Automation will replace manual routine processes providing accountants time to focus on higher-value tasks. Accountants will add value through the interpretation of complex financial data, advising on strategy, and deriving insights from the data to offer strategic advice.
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Continuous and lifelong learning
The accounting profession is highly dynamic; new technologies and legislation get into effect every other week. An individual will, above all, have to dedicate themselves to continuous learning and professional development to remain updated and relevant.
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Communication and collaboration
Effective communication and collaboration skills will be critical for accountants as they perform strategic tasks involving cross-functional teams. The skill will entail communicating complex financial information to non-financial stakeholders in as simple terms as possible and collaborating with colleagues outside the department.
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Advanced knowledge and skills
In the future, advanced knowledge and skills in areas such as tax planning and compliance, risk management, and regulatory compliance will be essential for accountants to navigate the complex regulatory landscape under heightened scrutiny.
The Future of Accounting Software: What Can You Expect Next
The accounting industry is rapidly changing, and businesses need to stay up-to-date with the latest trends and advancements to remain competitive. The next generation of accounting software will bring significant improvements to the R2R function, which is critical for financial reporting and compliance.
Here’s what to expect:
1. Accelerating financial close with day zero accounting
Automation allows for faster financial reporting with worksheets and project templates for data collection and analysis, reducing the risk of errors and avoiding the need to create reports from scratch. This helps businesses close their books faster and provide accurate financial statements to stakeholders.
2. Improving reconciliation accuracy with continuous accounting
AI accounting software performs reconciliation on an ongoing basis, which helps to improve accuracy and reduce the risk of errors. This provides more accurate financial insights and enables businesses to make better-informed decisions based on reliable data.
3. Detecting anomalies proactively to reduce risk
Autonomous technology proactively identifies unusual patterns or outliers in financial data, which can be indicative of errors or issues. This helps to reduce the risk of errors in reporting, compliance violations, or financial losses.
In addition to these benefits, the future of accounting software is expected to bring more advanced automation capabilities to other areas of accounting. This includes automating the accounts payable and receivable processes, automating financial reporting, and automating tax preparation. These advancements are expected to increase productivity, reduce operational costs, and accelerate the sales cycle.
How HighRadius Can Help Drive Greater ROI in Accounting
HighRadius offers a cloud-based Record to Report Module that helps accounting professionals streamline and automate the financial close process for businesses. We have helped accounting teams from around the globe with month-end closing, reconciliations, journal entry management, intercompany accounting, and financial reporting.
Our Financial Close Module is designed to create detailed month-end close plans with specific close tasks that can be assigned to various accounting professionals, reducing the month-end close time by 30%. The workspace is connected and allows users to assign and track tasks for each close task category for input, review, and approval with the stakeholders. It allows users to extract and ingest data automatically, and use formulas on the data to process and transform it.
Our Account Reconciliation Module provides an out-of-the-box formula set that can configure matching rules and match line-level transactions from multiple data sources and create templates to automate various transaction processing required for month-end close. Our solution has the ability to record transactions, which will be automatically posted into the ERP, automating 70% of your account reconciliation process.
Our AI-powered Anomaly Management Module helps accounting professionals identify and rectify potential ‘Errors and Omissions’ on a daily basis so that precious resources are not wasted during month close. It automates the feedback loop for improved anomaly detection and reduction of false positives over time. We empower accounting teams to work more efficiently, accurately, and collaboratively, enabling them to add greater value to their organizations’ accounting processes.
FAQs
1. What is the future technology for accounting?
The future technology for accounting is AI-driven solutions that are expected to revolutionize the accounting industry, reduce operational costs, and enable accounting professionals to focus on higher-value tasks such as analysis, strategy, and decision-making.
2. Is accounting a good career option for the future?
Yes, accounting is a promising career for the future. With the advancement of technology and the business landscape, accountants are taking on a more strategic role. The need for financial expertise, regulatory compliance, and data-driven decision-making ensures continued demand for skilled accountants.
3. Will accountants be needed in the future?
Certainly, accountants will be required in the future. Even if technology disrupts routine operations, the demand for the level of skill that accountants bring continues to increase with this explosion in data interpretation, strategic management, tax planning and regulatory compliance.
4. How will artificial intelligence (AI) change the future of the accounting industry?
AI can transform and be used to automate routine tasks within the accounting field, enhance the accuracy and reliability of accounting data, and be predictive. This shift improves efficiency, reduces errors, and opens new opportunities for accountants to add value.
5. Is accounting future proof?
While no career is completely future-proof, accounting is certainly up there in resilience. With technology adoption, the profession is moving more in the direction of tangible planning and data analysis. So, constantly learning and adapting is crucial in the accounting field.
6. Will accountants be in demand in the future?
With businesses constantly growing and financial regulations increasing in complexity, the need for skilled accountants to help in managing an organization’s financial health, navigate compliance, and provide strategic advice will constantly be in increasing demand.
7. What are the key trends in accounting?
There are seven key trends majorly emerging in today’s landscape. These major trends include: automation, cloud-based accounting software, data analytics & forecasting tools, data security, analytics, role of Artificial Intelligence, and increasing statutory and regulatory compliance
