Seven major trends that will shape the accounting field in 2024

The accounting sector is going through a major change right now. Thick trees surround a road with peaks and troughs.
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Summary

• Many companies are likely to either rise or fall based on their technological abilities.
• The traditional skills accounting professionals need will be increasingly tech-centric but also more humanity-driven.
• AI is not that dangerous yet.
• Young people are the future workforce—if you do not adapt, they leave.
• AI can work for you, but it also works against your business.
• The daily operations of a business will place more emphasis on the environment.
• That aspect is collaboration, the key principle of every future accounting firm.

The future of the accounting profession is coming, and this involves several elements, including the environment in which this works, how the business will evolve from where we are to where we are going next, and what effect technology has on it all. They are shaping the motivations and approaches used to complete tasks.

Therefore, what implications does this have for the future of accounting?

If you are apprehensive about the rapid advancement of technology, the skills shortage, AI, or the numerous other changes that are transforming the profession, attempt to reframe these concerns as opportunities. Those who don’t adapt will inevitably fall behind.

The following are seven critical trends that you should be cognizant of regarding the future of accounting.

Trend 1: Will technology change the role of the accountant?

There is no doubt that technological literacy will become an essential component of the accounting profession. You will use more technology, and your clients will do the same. That is the truth.

However, what does this imply for the accountant and accounting firm proprietor? Is it the allure of opportunity, or is it a bleak outlook?

It is challenging to anticipate the extent of the digital transformation in the distant future. However, technology will not replace accountants.

You should recognize sooner rather than later that technology can already handle a significant number of manual and repetitive accounting tasks that previously took up your time.

Automation, artificial intelligence (AI), and even undeveloped technology will eliminate the need for many previously performed tasks. However, the truth is that machines are unable to establish human relationships in the same way as humans, and they cannot combine intuition with experience to provide exceptional client service.

Technology will enable you to allocate additional time for planning, data analytics, and fulfilling your advisory responsibilities. Therefore, utilizing technology will provide you with the opportunity to concentrate on enhancing the profitability of your firm and your clients rather than solely ensuring compliance.

Prepare for the future of accounting by taking meaningful action: 

Learning how to utilize new technology should be a top priority, regardless of your age or level of experience. Or, at the very least, experiment. Familiarize yourself with the functionality of instruments such as ChatGPT. Acquire the knowledge necessary to operate low- and no-code instruments. Jason Staats is an example of a leader in the accounting technology sector.

You will be better equipped to capitalize on game-changing tools for your accounting firm by becoming an early adopter and immersing yourself in new technology, even if it is solely for experimental purposes.

Trend 2: Will artificial intelligence (AI) eventually supplant accountants?

The proliferation of artificial intelligence (AI) is driving pervasive discourse regarding the future of numerous professions, and some individuals have even issued doomsday predictions. Accounting professionals are not immune to that discourse.

Although AI has been in existence for a long time, the onset of generative AIs such as OpenAI’s ChatGPT is new but rapidly becoming popular among users. Moreover, it has triggered widespread uneasiness among the finance community.

Additionally, approximately 75% of the companies surveyed in The Future of Jobs Report 2023 expect AI to result in substantial job churn. Companies also anticipate that specific industries, like accounting and bookkeeping, will have 26 million fewer jobs by 2027 due to the increasing usage of technology and digitalization.

However, this factor does not account for the requirements of the accountant as a strategist with unique human experiences, understanding of nuances, passion, and strength, and the value and service accounting provide to a client and the client’s reality. Furthermore, an accountant who can use AI is also an accountant who follows the latest technological trends and is thus more likely to provide a service that is responsive and up-to-date.

In reality, around 58 percent of accounting professionals are not concerned about AI replacing them.

Accountants are evolving by emphasizing more holistic evaluation of the business environment, data analysis, and trends to prove their worth. Although it’s difficult to predict where artificial intelligence will take accounting services, there are two things clients can always rely on:

• Imagination and creativity distinguish humans from machines. Attempting to outdo AI in terms of raw data processing is pointless. Instead, use it to change your business and your clients’ business models. The ability of humans to innovate, connect, and integrate financial data trends can never be replaced.
• AI will never form human relationships. AI cannot imitate the deep trust and friendship that often develop between a client and an accountant. It ensures that people who care about and for others will be forward-thinking accountants for the time to come.

How can accountants use AI in the future? 

Hence, AI can be a huge boon to your profession if you use it correctly. Here are five ways to get the most out of machine learning at your accounting firm:

• Access to up-to-date and accurate information for your clients and more.
• Automatically extract data from official documents, licenses, and contracts.
• In turn, that would allow you to automatically pull large volumes of data to create strategies and predictions.
• Review financial statements for irregularities and use this data to pinpoint fraud sooner rather than later.
• Transcribing telephone conversations and composing meeting minutes

And that is where GPT comes to the rescue! Some accounting tools, including Velan for practice management, are already using GPT-powered technology to help make your job more streamlined and effective than ever before.

Prepare for the future of accounting by taking meaningful action:

Create a comfortable environment in which clients can contact you. Demonstrate your presence (rather than “the machines”). Alternatively, capitalize on the advantages of excessive communication. Communication with clients, regardless of what they need to say, will ensure they know you care.

Technology facilitates the ability to always be present, a gift that enables you to quickly establish strong relationships with your clients.

Why not inform your clients that you are investigating accounting AI tools? For more time to strategize about their business’s future, tell them you’re finding better ways to work.

Trend 3: More often, accountants will use automation, including low-code and no-code tools.

The growing dependence on automation tools and functions is another technological trend that is expected to influence accounting’s future. In the end, this dependence will result in a reduction in the amount of time spent on manual processes and an increase in your time.

Automating essential accounting functions, such as payroll, compliance work, data entry, communications, induction, and planning, will save time.

Additionally, this is not detrimental. We can more effectively allocate the reclaimed time to critical reasoning, problem-solving, and decision-making.

For example, accountants have consistently spent a lot of time inquiring about their clients’ information. However, organizations that implement process automation are alleviating this anxiety.

Can you imagine accounting’s future if automation can only do that?
Low-code and no-code utilities

Without any knowledge of code, organizational owners can build apps as well as integrate their tools with no-code and low-code tools, which improves operational efficiency for accounting firms without software engineering capabilities.

A recent Zapier survey found that 90% of no-code users believe their organization grew faster by using no-code versus not.

Surely, the advisers and company heads of tomorrow will be tech-empowered to make their processes easier, smoother workflows possible to process faster solutions at reduced times at lower costs offering better value for work utilizing no-code or low-code, which has proliferated over numerous resource channels aimed towards accountants.

Don’t be surprised if accountants are coming up with more accountant applications under the same success without much software development knowledge.

Get ready for the accounting future.

Not everybody else feels assurance and also nimbles in embracing parallel by acting:

If you recognize that much of your team’s time and effort is wasted on manual tasks, it may be an opportunity to take another look across the technology stack. Find out about advances in technology that can save you time. But if you are faced with a problem that any tool does not seem to solve, make a shot and do this by yourself. Look up some no-code applications, and you will know the answer.

Trend 4: The accountant not want to return to the office full-time

This includes announcements from giant, multi-billion-dollar companies like Amazon doing so very recently despite it being the exception, not the rule.

In the US and Europe combined, only 4% of CEOs are contemplating a mandatory office return for workers. By 2023, it will be top of mind with just 5% of CEOs in the US and a mere 2 percent in Europe. Many are focused on changing the hybrid work model for the better.

The firms in the accounting industry that were successful during the pandemic are those for which they already worked from home.

The 2022 Practice Excellence Report shows that firms established in the last two years have been outperforming longer-standing operations since 2020. The advantage is that as long as they started before or during the pandemic, they were able to dodge any lockdown with speed changes and issues.

Accounting firms are going 100% virtual or hybrid. If you have a strong technology base to support your operational and collaborative activities with clients as well as internally, there is no need for any backtracking of pre-COVID work patterns.

Similarly, it is important to recognize the difficulties that come with working from far away and try to overcome them.

Preparing for a future in accounting

Have a tech infrastructure that adapts to remote work. For example, anyone else can be built like what Linford Grey does in the UK: designed for maximum productivity and to ensure employees have a good work-life balance wherever they are.

Trend 5: Cybersecurity threats will continue to evolve.

There are two primary reasons why hackers target accountants and bookkeepers, particularly those employed by small and medium-sized businesses:

You possess an abundance of knowledge.

You do not attract the same level of public and police attention as larger organizations.

Globally, threats such as business email compromise (BEC) have increased, with the United States alone reporting an estimated loss of approximately USD 2.4 billion.

According to Drew Fenton, CPA and Director of Specialist Insurance Broking firm Fenton Green & Co., accountants’ risk profile is likely 9 out of 10.

“If you are my accountant, you will have access to my tax file number [social security number], banking information, mortgage information, family information, business information, and superannuation [401k].” You have access to my entire financial profile, which is invaluable.

Your company is not the only entity that can capitalize on rapidly evolving technology and generative AI. Hackers are equally enthusiastic. People are opening fraudulent emails generated by AI at a higher rate than those crafted manually.

As a result, experts predict that the global market for AI cybersecurity will grow from $14.9 billion in 2021 to $133.8 billion by 2030.

The biggest threat AI may present to accounting firms is less about it taking over their jobs and more about it coming from the inside.

Take action to prepare for how accounting will change. 

Get your team educated and get it done properly, utilizing companies like Practice Protect to bulletproof your accounting firm against hackers and fraudsters. Be sure to understand the risks and best cybersecurity practices.

Trend 6: Accountants as climate change warriors

Just under 50% of consumers will shift their purchasing habits to more environmentally conscious companies, while over 80% of consumers expect businesses to actively combat climate change.

According to the statistics, consumers who patronize your clients’ businesses are interested in knowing that they are responsible for the environment. And who is more qualified to assist your clients in fulfilling their climate responsibilities than you, their trusted advisor?

No one.

Mandatory climate disclosures for businesses, currently supported by 87% of surveyed consumers in the United States, primarily focus on carbon emissions. This figure will continue to increase.

This implies that clients will begin to request carbon neutrality advisory services.

Environmental auditing involves the identification of the environmental impacts that clients have on the environment. We then employ the integration of environmental and financial costs to identify solutions that align with both metrics.

For instance, assisting a client in transitioning to paperless operations is an excellent approach to reducing environmental impact, time, and expense. Currently, digital documents and e-signatures suffice the needs of most organizations. Another example is teaming up with an environmental consultancy such as Rye Strategy to assist in the measurement and offsetting of a company’s emissions.

Take action:

Evaluate your firm’s carbon footprint and seriously consider moving away from a non-carbon accounting organization. Join the B Corp certification program and learn how you can help your organization rise while helping all mankind on this crusade for a sustainable future. Not only are you fighting the climate crisis, but you also become a more attractive potential client or employee

Trend 7: Difficulty of Hiring and Retaining Talent in the Right Market 

Over 300,000 accountants and auditors have quit since last year. That is a 17% decrease. On top of that, there is a large talent gap; more accountants are retiring than fresh graduates entering the industry.

That talent pool is shrinking fast, and you are in charge of finding the best that remain. For that, the future firms will have to focus on the following six areas:

1. Young men and women want to use technology.

The profession may become easier for Gen Ys with the heightened use of general and accounting technology. Chad Davis and Carla Caldwell are proving to the world that accountants can make a big impact by leveraging automation, AI, and technology—period. For someone young and trying to determine the career path, that is something really exciting.

2. Young wants options and growth paths.

Close to 90% of millennials find professional development and career advancement opportunities an important or very important part of their workplace experience. Further to that, businesses spend 2x on retaining their staff and hit a profitability target of +11% in learning & development initiatives.

3. The flexible work arrangements

Employees Choose Remote Work When employees have the choice, as many as 87% prefer to work remotely (McKinsey & Company).

4. This should be a need rather than a nice-to-have.

Eighty per cent of employees want to work for a company that values diversity, equity, and inclusion (DEI) as well, while 60% want their leaders to address social and political issues.

5. Put simply, as technology takes over transaction-based work, the emphasis on soft skills will grow.

Practically, young accountants will have to build up their softer skills collaterally with technical capabilities (as told before most of the manual and mundane tasks are managed by these tools) if they want to retain client relationships.

6. There is only so much offshore talent that can be obtained.

As of 2023, the Philippines has an estimated number of around 200,000 Certified Public Accountants. Also, the average pass rate for taking the CPA exam keeps how fast new CPAs are added to that total figure each year down to a few thousand per annum. One must not forget that offshore talent is a limited resource since the number of available offshores keeps on falling while demands for outsourcing continue to rise.

Take action now to be ready for the future of accounting.

A workplace culture that is both diverse and flexible, being up-to-date with the latest technology in order to draw tech-savvy talent

To retain the best talent, they need to be acknowledged and provided opportunities for personal/professional growth. Harvard University conducted research that determined that 85% of job success was attributed to the possession of well-developed soft skills, while only 15% was attributed to technical skills (hard skills).

Clients are looking for tranquillity. The ability to articulate the rationale behind the actions you are taking provides your clients with the assurance that they are on the correct track.

2. Understanding low-code or no-code technology

By 2024, these tools will be used to create nearly all new low-complexity applications by non-IT professionals, with over one in five of those moving beyond and becoming citizen developers for more advanced automation.

Create tech when you need it to integrate critical systems—no expert developer is needed. Save time and money by having the ability to start building technology solutions as soon as specialist IT workers are required.

Jason and Chad created this resource to help you develop automation concepts, such as the use of artificial intelligence (AI) and no-code applications and tools.

3. Technical proficiency

The most critical addition to the skill sets of future employees, according to 57% of accountants, is technology literacy.

You will gain knowledge of industry technology. Those accountants embracing technology will find success and millage more successful than those who do not.

One of the technologies that has caused perhaps more than its fair share of hype is blockchain. This is complex, especially for newbies in this industry. It is getting more and more important; it will come to the point that a client will ask his accountant if he should start doing SaaS. You must have the required information to compete correctly.

4. Visualizing and Translating Data

Accountants need to be able to translate dense, technical jargon into an easily understandable language.

Likewise, you will be a great storyteller of the data—how to convey stories through numbers. The bigger the data there is to work with, the better you will be able to narrate the information and have a client understand it.

How can you establish a collaborative accounting firm?

• Develop a collaborative technology platform.
• A disjointed accounting technology system does not foster collaboration. To fully capitalize on the advantages of a connected technology platform, you must integrate your accounting software tools.
• Implement a practice management solution that is genuinely collaborative at the core of your collaborative technology stack.
• Make alignment with the mission and values of your organization a top priority.
• A well-aligned team renders your business’s vision, mission, and strategy useless. Your entire team can only collaborate to achieve your organization’s objectives if you effectively communicate them.
• Establish a collaborative culture.
• Establish a collaborative culture with a team of modern accountants by valuing everyone’s participation, promoting transparency, encouraging collaboration, and building trust.
• Make sure the organization is visible.
• The biggest part of collaboration is dependent on having total visibility over all the resources your team needs to perform their duties efficiently.

A Strong Footing for the Future Giving Society.

In a world where development is exponential, who can predict what the planet will look like five or ten years from now? As AI becomes more and more prevalent in almost all facets of employment, the accounting profession is one where human intervention cannot come soon enough.

Firms in a position to anticipate trends and emphasize the right competencies are well-positioned to pull ahead of others by leveraging how accounting services are changing.

No matter what the future holds, they can set an unshakeable foundation to succeed.

To learn about how Velan can help accelerate you for the future, book a demo here.