13 Accounting Trends in 2023 and Beyond

Like every other industry, the FinTech sector is evolving rapidly regarding systems and business processes. For example, the CPA (Certified Public Accountant) exam in 2022 emphasizes automation, analytics, and a data-driven mindset.

If you are a Chartered Accountant or looking for accounting software for your business, it is crucial to stay updated about the recent trends in accounting. They will help you to be flexible and work remotely in a post-COVID world.

We will discuss 13 of the accounting trends in detail. But before that, let us also understand the market for business accounting software. Such understanding will help you uncover rare opportunities in your accounting career.

What Are Accounting Trends?

1. Automated Accounting Processes

Automation has already made its way into the accounting domain. An ACCA study predicts that more than 50% of C-level executives in the accounting industry expect automated accounting systems across several industries. Also, 70% of companies have reported substantial ROI  after using automation in their accounting processes.

One of the uses of accounting automation is Accounts Payable / Accounts Receivable (AP/AR). Accounts Payable (AP) is what your company owes to vendors in the form of credits. Accounts Receivable (AR) is the money that your customers owe you on credit. Automation helps you in the following ways:

Accounts Payable: 

• Extract data from all the invoices.
• Compile data in a cloud database.
• Forward invoice information to vendors for sign-off.
• Process payments on time.

Accounts Receivable: 

• Automatically deliver the initial invoice to customers.
• Send late payment reminders to clients
• Collect payments securely.
• Deposit the money directly into your bank account via electronic transfer.

So if you have not yet invested in automated accounting systems, it is time to reap the benefits of technology.

2. Cloud-based Accounting

It is one of the most popular accounting trends that every business wants to adapt to its systems. In a cloud-based accounting system, you can maintain your business books online. The data is encrypted, and only people with valid credentials can access it. 

The benefits of cloud accounting software can take your business next level. Look at the benefits of it:

• Data related to your sales or revenue is imported from your bank account to the cloud server automatically.
• You can view your current financial status from anywhere in the world.
• Multi-user access helps you collaborate online with your team members and advisors in real time.
• The dashboard shows significant financial information using easy-to-understand graphs and reports.

Thus, the possibilities are endless once you start using cloud accounting systems.

3. Data Analytics and Forecasting Tools

Data analytics is not one of the recent trends in accounting, but it has become more powerful than ever before. Businesses and accounting firms use such tools for budgeting, tax consulting, risk management, and auditing.

We can say that Accounting data analytics and visualization tools have made finance functions more analytical. Moreover, businesses are increasing their efficiency and managing risks with ease by leveraging the power of data analytics.

4. Rise of Accounting Software Solutions

The demand for online accounting has grown during the pandemic, and accounting software is the best way to do it remotely.

Nowadays, online accounting software comes with a host of integrations and helps expedite routine processes. Also, it uses RPA (Robotic Process Automation) to standardize transactional data from multiple sources in multiple formats. This process is also known as harmonization.

Large-scale enterprises opt for Enterprise Resource Planning (ERP) systems instead of standalone accounting software. Such systems provide enterprises with the following features in addition to an accounting module:

• Procurement 
• Order Management
• CRM
• Supply chain management 
• Inventory management 
• Logistics 
• Human resource management

5. Blockchain

Blockchain is one of the recent trends in accounting due to its direct relationship with ledgers. The primary role of blockchain is to maintain a ledger account containing financial information. It is also responsible for the transfer of the ownership of assets in a secure and verifiable manner. 

Many people believe that the decentralized nature of blockchain makes it vulnerable to frauds and data manipulation. But it is not correct. The following image offers clarity on the secure framework of blockchain and how it maintains data integrity at all times:

All big organizations are exploring the implementation of blockchain in their financial processes. For example, Walmart and other similar retail giants have already experimented with beta blockchains in their supply chain.

Thus, blockchain will be a game-changer for accounting professionals soon.

6. Forensic Accountancy

Forensic accountancy is one of the latest accounting trends, and techniques and not many people know about it. Forensic accountants belong to law enforcement agencies or private auditing firms that prevent, detect, and investigate financial crimes such as fraud, corruption, and money laundering. They have the skills and knowledge in accounting, criminal and civil law, and IT.

The job profile of forensic accountants includes the following tasks:

• Design strategies to prevent and detect commercial crimes. 
• Obtain and review financial documents to uncover inaccuracies or discrepancies.
• Quantify revenue losses and damages done by contract breaches.
• Design and implement fraud risk management programs.
• Conduct interviews with suspects and witnesses involved in financial scams.
• Provide litigation support and present findings that an attorney can use as trial evidence in a court of law.

Thus, forensic accountants can protect your business from scams and save you from losses amounting to billions of dollars.

7. Advisory Services

Industry analysts predict one of the latest accounting trends would be to combine technology and financial advisors. Such a hybrid approach can help accountants get access to deeper insights using analytics. 

Automation cannot replace humans entirely, especially in accounting. However, using advanced technologies in the accounting industry can enhance the service quality of accounting firms. For example, accountants will not have to perform manual and repetitive tasks anymore. 

Using technology and advisory services together increases client confidence in data and improves the advice given to them. Taking it a step further, advisory firms can use robotic process automation (RPA) and AI to understand client intent in a better way and offer tailored advice.

8. Role of AI in Accounting

Artificial Intelligence (AI) is having a positive impact on the accounting industry. It can analyze large volumes of data at high speed and with a high level of accuracy. AI can also optimize administrative tasks, workflows, and accounting processes that result in various structural changes for a business. 

Many companies use AI and robotic process automation (RPA) to automate routine, highly repetitive tasks. It helps accountants to focus their time on other significant activities. 

For example, the accounting firm EY uses AI to analyze lease contracts. AI makes it easier to capture information quickly before the commencement date. It also automatically records the amount to be paid along with the termination or renewal options for the contract. 

9. Big Data in Accounting

Big Data plays a crucial role in the accounting industry. It supports companies and CPA firms through expanded assessment methods. Finance professionals can use big data to identify which collected data are the most valuable and then convert them into actionable insights. 

CPAs equipped with the knowledge of big data can focus more on analyzing processes, taking positive control of the systems, and forecasting problems before they can happen.

Based on accounting facts and trends, around 63% of organizations worldwide want to adopt big data in the next few years (Dresner, 2020). Meanwhile, many firms are recruiting accountants with extensive knowledge in analytics and data science. Thus, the accounting industry is shifting from its reactive nature to becoming more proactive by using big data.

10. Remote Work Setting

In the post-COVID world, firms are having a hard time recruiting top talents in finance and accounting. They must broaden their candidate search and hiring criteria. Nowadays, most potential candidates want to work in a remote work setting.

Accounting leaders have adapted to the pandemic and allowed employees to engage in remote work. A 2020 survey published by Arizent says that 85% of CPA firms will allow their employees to work remotely even after the pandemic (Source: Accounting Today, 2020).

Cloud-based accounting software allows distant teams to collaborate and accomplish critical financial processes. It can include a month-end close or filing e-turns of income tax. Online collaboration tools such as Zoom and functional collaboration tools for cloud-based file sharing have made things easy for everyone.

11. Outsourcing of Accounting Functions

Most businesses have outsourced their accounting functions, and others are following suit. It has many benefits. Outsourcing allows companies to focus more on their limited resources, thus increasing their profitability. It also saves them employment costs like taxation, payroll, insurance benefits, and induction expenses.

There is a reason why outsourcing accounting functions is one of the new trends in accounting. Every year, many businesses experience deep satisfaction in their outsourced accounting value. Outsourcing is now a profitable business model for CPA firms to deliver efficient services to their clients. Some firms go further to analyze business operations and add more value to the client’s business. Many are opening their online business bank accounts in Hong Kong since it is easier to manage and provides support for global payments.

12. Dynamic standards of accounting

Accounting is a dynamic industry due to the changing financial standards and guidelines across the globe. The Financial Accounting Standards Board (FASB) issues updates about changes in the accounting standards throughout the year.

For instance, in 2022, there are some changes regarding asset acquisitions, credit losses, leases, debt securities, variable interest entities, reorganizations, and banking regulation disclosures.

Accounting professionals and businesses should keep a constant lookout for such amendments to stay compliant with financial regulations.

13. Workplace Wellness

One of the latest accounting trends and techniques that need our attention is workplace wellness. Firms and businesses offer workplace wellness programs as a perk for their employees. But managing these programs can be a daunting task for accountants. 

For example, accountants must ensure the discounts employees earn on health insurance through wellness programs are calculated accurately as withholdings in paychecks. Accountants must also take care of recent changes to tax laws that affect the tax-deductible business expenses of employees.

Global Business Accounting Software Analysis (2017-24)

Market Size and Growth Rate of Business Accounting Software

The value of the global market for business accounting software was USD 3.2 billion in 2016. Industry analysts expect it to grow at a steady CAGR of 6.03% to USD 4.10 billion by 2024.

Talking specifically about the revenue from cloud accounting software, it was USD 1.9 billion in 2010. But it surpassed the expectation of USD 2.16 billion in 2022 due to the increasing popularity of cloud computing.

The following pie diagram will give you a good idea of why cloud accounting software is popular amongst businesses.

3 Factors Driving the Growth of the Global Accounting Software Market

• Cloud-based accounting software enables remote access on the go.
• Launch of mobile accounting applications by popular software vendors.
• Growing need for systematic management of balance sheets and other aspects of accounting by small businesses.

Also, these three factors are responsible for the latest accounting trends to be covered in the later sections of this blog.

Market Segmentation of Accounting Software

By Region

• Asia-Pacific (China, India, Japan, Singapore, Australia, New Zealand, Rest of Asia).
• Europe (U.K., Germany, France, Italy, Spain, Hungary, Belgium, Netherlands & Luxembourg, Rest of Europe).
• North America (U.S. and Canada).
• Latin America (Brazil, Mexico, Rest of Latin America).
• Middle-East and Africa (GCC, North Africa, South Africa, and Rest of Middle East).

By Deployment

• On-premises software: The vendor installs the accounting software and related hardware on-site. The business needs dedicated IT staff to implement, maintain, and support the accounting system.
• Cloud-based software: Users can access the SaaS (Software-as-a-Service) or cloud-based software through the internet on any supported device. The vendor can maintain the system remotely.

By Application

• Manufacturing: Companies manufacturing finished goods from raw materials need accounting software. It has features such as inventory and warehouse management. The software also helps them track financial transactions related to the purchase of raw materials.
• Service: Different types of service providers have specific requirements for accounting software. Their primary focus is on invoicing, sales management, employee tracking, etc.
• Retail: E-commerce sites and physical stores need business accounting software for inventory management, point of sale (POS), and supply chain management.

By Type

• Commercial Accounting Software: Such software serves the accounting needs of most organizations. It provides insights in the form of detailed graphs, reports, and pie diagrams.
• Professional Accounting Software: Individual professionals, like doctors, independent contractors, freelancers, etc., can use it for their basic accounting needs.
• Enterprise Accounting Software: It suits large enterprises and offers an integrated accounting system with many functionalities. Some of them are workflow management, project management, business intelligence, etc.
• Custom Accounting Software: Some vendors can develop customized accounting software to suit company-specific needs. Such software has reports and other tailored features to serve a specific purpose.

Popular Vendors of Accounting Software

Look at the graph below to see the most popular vendors in the global business accounting software business:

Also, go through the following five best accounting software for small businesses and other categories in 2022: 

• Best software overall: QuickBooks Online
• Best for micro-Business owners: Xero
• Best for service-based businesses: FreshBooks
• Best for freelancers: QuickBooks Self-Employed
• Best free accounting software: Wave

If you are a startup or looking for free software to start accounting, take advantage of the above tools. They are aligned with the latest accounting trends and can add value to your business.

The Road Ahead for Accounting Beyond 2022

The future of the accounting industry looks bright. Many professionals worry about the loss of jobs due to automation. But remember, automation cannot work without human input. So they should upgrade their skillsets and align themselves with the emerging accounting trends to stay ahead in the industry.

Leave a comment below if you liked the article, and also share it with your peers.

Will accounting technology replace human roles in accounting?

Though advanced technologies such as AI and machine learning provide immense opportunities for accountants, they won’t replace human roles. These groundbreaking technologies will empower accountants and help them make informed data-driven decisions.

The Bottom Line 

So these are the nine trends that will drive the future of accounting technology. Considering the trends highlighted above, we can conclude that the future of accounting technology looks positive and bright.

In an ever-evolving business environment, keeping pace with the latest accounting technology trends will not only help you make the best business decisions but take your business to the next level. Thus, organizations should not refrain from embracing the latest accounting trends that are shaping the future of the accounting sector worldwide.