The accounting industry is rapidly changing, as technology offers innovative ways to automate old tasks and revolutionize new ones. Far from replacing the human accountant, tech-based changes, like the advancement of artificial intelligence, are likely to grow this career field. For those interested in accounting, this means that an aptitude for technology and an eye on the future are more important than ever.
Understanding where accounting is going will help current and future accountants see the remarkable potential in this profession. Looking ahead, it’s worth considering many key trends that are reshaping the industry. These include:
- A strong demand for accountants with master’s degrees
- A continuing need for accounting services among small businesses
- Opportunities for well-versed tax professionals to help navigate the Tax Cuts and Jobs Act
- The need for tech-savvy accountants who can combine automation with insightful analysis
Why Accounting Shows Promise in 2019 and Beyond
Accountants are trusted and sought-after consultants and team members in companies of all types and sizes. Though artificial intelligence is entering this field, it does not present a major threat to human professionals in this area, as it might in others. Rather, technology may help accountants perform better and offer greater value in their services. Freed from mundane tasks, accountants can suggest and implement strategies for growth and development of the businesses with which they work.
Key Trends Shaping Accounting
Accounting in 2019 will continue with many of the factors that have been shaping the profession in recent years. From hiring trends and high salaries to new opportunities for tech-savvy professionals, there is a lot to look forward to as 2019 progresses.
The following trends indicate that accounting is a promising profession for both established professionals and new graduates to pursue. Keeping these points in mind, accountants can position themselves to make the best use of new technologies and evolving needs among their clients.
Salaries and Revenue Are Increasing
Accountants can look toward a lucrative future for their profession. A Sage study indicated that revenues are up for 56 percent of accountants; only 12 percent have seen a decrease. However, the profession is becoming highly competitive, with 67 percent of survey respondents saying that competition is an issue for them. This same study declared, “How an accountant responds to the challenge of competition and client demands is ultimately going to determine their success or failure over the next 5-10 years.”
With technology rapidly redefining the needs and wants of clients, the more innovative and educated professionals are most likely to gain an advantage. Staying ahead of the trends by pursuing continuing education now may help accounting professionals position themselves for the changes anticipated in the near future.
According to the Robert Half 2019 Salary Guide, salaries at the midpoint percentile for professionals with one to three years of experience are $62,000 for a general accountant, $67,000 for a financial analyst, $71,000 for a tax accountant, and $74,000 for a data analyst. Corporate accountants earn significantly more, with a midpoint salary of $111,000 for a tax director, $148,750 for a director of finance, and $197,750 for a chief financial officer.
Accountants Are in High Demand
According to the U.S. Bureau of Labor Statistics (BLS), employment for accountants and auditors is expected to grow 10 percent between 2016 and 2026. This is faster than the national average for all occupations, which is anticipated at 7 percent. The BLS states that “employment growth of accountants and auditors is expected to be closely tied to the health of the overall economy.” As businesses grow and a growing number of companies go public, a large number of new accountants will be needed to properly handle their financial documentation.
The AICPA reports that in 2016, 31 percent of new graduate hires at CPA firms had master’s degrees. Of these, 74 percent held a master’s in accounting. Just 13 percent had a master’s in taxation and 12 percent held an MBA in accounting. A specialized master’s degree dedicated to accounting can help prepare graduates for the new challenges and opportunities in this field.
Accounting Is Becoming More Advanced
The shape of the accounting industry is undoubtedly changing as AI enters this field. By 2020, 40 percent of accounting work is expected to be replaced by robotic technologies, according to Accounting Today. The BLS predicts that the automation of common accounting tasks will allow the modern accountant to become more efficient and take on a greater number of responsibilities. Automation is not expected to decrease the need for accountants. Rather, it will free accountants to take on more analytical and advisory duties.
In a study by Wasp Barcode Technologies, businesses reported that their top complaint about their accountants was that they were more reactive than proactive. A lack of guidance was another major complaint that surfaced among businesses of all sizes. Professionals who are prepared to counter these criticisms will have the potential to make great strides in this industry.
Small Businesses Need Accounting Assistance
The U.S. Small Business Administration considers 99.9 percent of businesses to be small businesses. About 30.2 million of these businesses exist in the country, creating a prime market for accountants who can help meet the needs of this sector. According to a U.S. Bank study, 82 percent of businesses fail due to poor cash flow management. Improper pricing is an issue for 77 percent of small businesses, and starting out with too little money was an issue for 79 percent of those that failed.
An accountant with a specialty in small business management can help entrepreneurs avoid these issues and keep their companies out of the red. The arena of small businesses is continually changing. In the third quarter of 2016, almost as many companies shut down as launched — while 240,000 establishments started, 215,000 closed their doors. With this constant turnaround, there’s no shortage of opportunities for accountants who are equipped to assist small business owners with their finances.
A study by the International Federation of Accountants (IFAC) revealed that accountants are considered among the most trusted advisors for small business owners. Small businesses tend to turn to small and medium-sized accountancy practices for their needs. Relationships between clients and advisors are usually long-term, giving both parties the chance to familiarize themselves with one another. This type of business relationship is highly beneficial, giving accountants the opportunity to fully assess the client’s needs and provide evolving solutions that grow with the business.
Taxes Are Becoming More Complex
The Tax Cuts and Jobs Act is bringing several significant changes to the U.S. tax code in 2019. This creates a far more complicated environment for individual income tax and will likely generate more opportunities for accountants who are equipped to help. This legislation will also have a significant impact on businesses, so accountants can likely find opportunities assisting both.
Of particular concern for businesses are:
- The new deduction for business income from pass-through entities
- Stricter limits on business expenses used for meals
- The elimination of deductions for expenses related to entertainment or recreation
- Limits on deductions for business interest expenses
- New rules for the application of like-kind exchange treatments
- Excess business loss limitations
- New rules for expensing depreciable business assets
Well-placed accountants who are prepared to deftly navigate the new tax laws may have the opportunity to connect with a wide customer base of companies and individuals who are in need of these services.
Clients Have More Demands
According to a Sage study, 83 percent of accountants indicate that clients expect more now than they did five years ago. Forty-two percent of clients today expect their accountants to provide business advice, and many accountants are doing so. In fact, a CPA.com study found that 78 percent of CPAs feel that it’s important to prepare their clients for future challenges, which includes changing technologies, increasing economic risk, and an evolving marketplace.
Eighty-two percent of CPAs indicate that they need to better understand innovation, and just 8 percent believe their profession is ready for the future. Still, a great number of accountants do see the future coming and are preparing themselves to meet it. Among accountants, 39 percent describe themselves as early technology adopters and 66 percent are interested in investing in artificial intelligence.
Accounting professionals who are poised to make the most of the technology that’s available to them are likely in the best place to meet the growing demands of modern clients. Understanding how to automate mundane tasks and leverage big data and analytics to provide more insightful, personalized services is becoming one of the most crucial accounting skills.
To prepare for the future, today’s accountants are considering advanced education. A Master of Science in Accounting from New England College allows students to pursue the degree from home, the office, or anywhere that is convenient. Concentrations in both General Accounting and Forensic Accounting allow students to focus on what they are most passionate about as they prepare for the future.