Accounting trends refer to the dynamic and responsive developments within the industry, which are shaped by various factors such as changing landscapes, evolving technology, and market forces.
The accounting industry is currently undergoing rapid transformation, largely due to lightning-fast advances in technology. The recent pandemic has further accelerated this process, leading to greater adoption of cloud-based accounting software and a shift toward automation and artificial intelligence.
A 2021 report by the Association of International Certified Professional Accountants found that 67 percent of accounting firms have diversity and inclusion policies in place, and 65 percent have formed diversity and inclusion committees or task forces. The report also found that 46 percent of firms have implemented unconscious bias training. This article will explore several noteworthy trends in accounting that are expected to emerge in 2023.
Top 6 accounting trends in 2023
- · Cloud-based accounting
The trend of Cloud-based accounting has gained remarkable traction in recent years, and its user-friendly interface and accessibility have made it an increasingly popular choice. The demand for remote work and collaborative efforts is on the rise, and as we step into 2023, accounting software is taking center stage. With its ability to streamline accounting processes and facilitate seamless teamwork, this software is dominating the industry like never before. Cloud-based technology empowers accountants to work seamlessly from any location, facilitating real-time collaboration with clients and secure data access via the cloud computing in accounting.
- · Focus on ESG and sustainability
In the present year, sustainability and ESG will take center stage, with environmental, social, and governance factors taking on critical significance for businesses and investors alike. Accountants are expected to incorporate these considerations into their accounting practices, which may involve identifying and assessing the impacts of ESG factors, measuring sustainability metrics, and gauging the risks associated with these concerns.
- · Rise of Blockchain technology
A recent report from Grandview Research revealed that in 2021, over 300 million individuals globally either owned or utilized cryptocurrency, indicating their engagement with the
blockchain. Furthermore, a staggering 96 percent of financial service professionals consider that blockchain technology has attained widespread acceptance. Technology in accounting is transforming the accounting sector in multiple ways, including reducing the expenses related to ledger reconciliation and maintenance. It also guarantees the accuracy of asset ownership and history, thereby enabling accountants to gain better insights into their firm's obligations and resources.
This revolutionary technology offers a wide range of possibilities, including automatic invoicing, payments, and audit trails. It has the potential to eliminate the need for third-party intermediaries such as banks and auditors, saving organizations both time and money. However, as with any novel technology, there are potential risks involved in implementing blockchain in your business. Therefore, it's crucial to conduct thorough research before making any decisions.
- · Data analytics and forecasting
Accounting is evolving, and accountants must adopt new tools like advanced analytics and forecasting to stay competitive. Data analytics is crucial in identifying inefficiencies and risks, and demand for data specialists in accounting is set to rise. Using data analysis to create future forecasts based on historical performance data allows businesses to plan and make informed decisions. Accounting firms should invest in training programs that provide accountants with hands-on experience with tools like SQL, Excel, and Python to stay ahead and gain an advantage in the job market.
| Read More: Data Analytics in Investment Banking
- · Workplace health programs
Workplace health programs are a highly sought-after trend in accounting and a benefit offered by employers, but their administration can pose challenges for accountants. The intricacies involved in managing these programs require careful attention from payroll managers and accountants, who must ensure that any discounts employees receive on health insurance premiums are accurately reflected as withholdings in their paychecks. Furthermore, accountants must remain vigilant of any alterations to tax legislation that may affect the eligibility of wellness program expenses as tax-deductible business expenses. Along with the potential to improve the health of employees, wellness programs can serve as an excellent tool for boosting employee engagement. Given the high levels of burnout and stress reported by accountants who juggle multiple responsibilities, these programs should be leveraged whenever possible.
- · Data security
The current threat landscape has magnified the risks associated with data breaches, and finance departments are increasingly becoming prime targets. These breaches pose a serious risk to individuals, as they can result in identity theft or the illicit acquisition of personal and credit card information. Moreover, spoofing, where fraudulent emails are disguised to appear legitimate, adds to the danger. Consequently, it remains essential for accounting teams to be trained in identifying suspicious emails and detecting potential cyber-attacks, as they are already adept at analyzing fine details and identifying anomalies. By becoming cybersecurity champions within their organization, accounting teams can emphasize the significance of safeguarding against data breaches.
Conclusion
The accounting industry is undergoing significant transformation due to the convergence of various factors such as technological advancements, and changing market landscapes. The
emergence of cloud-based accounting, ESG and sustainability considerations, blockchain technology, data analytics and forecasting, workplace health programs, and data security are some of the notable trends in accounring that will shape the industry in 2023 and beyond. Accounting firms must keep up with these trends to remain competitive, enhance efficiency, and provide value to their clients. They should also be mindful of potential risks associated with these trends and take appropriate measures to mitigate them
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