In the accounting world, some practices have remained unchanged for years — or since the invention of double-entry recording. This field may experience change relatively slowly, but quickly evolving market trends and the rapid growth of the tech world mean that the accounting field has had to adapt.
Take a closer look at seven of the top market trends disrupting the accounting industry:
Accountants who have worked in the field for more than a few years have almost certainly used manual entry methods to input data and perform standard bookkeeping tasks. In recent years, however, many accountants have begun to incorporate varying levels of automation into their workflows. While many accountants may welcome aspects of automation, for established accounting firms, incorporating this technology requires an adjustment period.
Writing for Entrepreneur, Samuel Edwards explains that automation may be the most substantial disruptor for the accounting field. From automated data imports to advanced software solutions, accountants now have several ways to save time and improve accuracy.
Accountants who embrace automation are likely to benefit in numerous ways, as will their clients. Since they can process data much more quickly, accountants may have the ability to provide real-time financial reports, which can enable clients to make more informed business decisions. As Edwards reports, automation may also reduce accounting costs by as much as 75 percent, resulting in substantial savings for the firm.
Artificial intelligence (AI) has improved the functionality of many software applications, thereby lowering costs, reducing time, and improving accuracy. Though AI is still relatively new to the accounting world, it may soon affect the way that accountants work.
Writing for the Journal of Accountancy, Sarah Ovaska-Few explains that AI may not replace accountants now or ever, but it can enhance their work. AI can easily identify data issues or important trends and alert accountants, who can then take human steps to resolve problems or discuss patterns with clients.
While many accounting firms have offered the same services and packages for years or even decades, that straightforward approach may change in the near future. In some cases, clients may be paying for services or solutions that they do not need.
As Edwards writes in Entrepreneur, clients have become accustomed to choosing specialized service packages in nearly every industry. When choosing an accounting firm, they may soon expect to be able to choose à la carte options or create custom packages. Offering these reconfigured service options may require accounting firms to rethink how they do business and how best to optimize their suites of services.
The do-it-yourself approach has become common in many fields, but it has unique implications for accountants. Due to the increased availability and user-friendliness of small business software solutions like QuickBooks, some companies have switched from employing an accountant for daily bookkeeping tasks to using software to do it themselves. Naturally, this affects many accountants’ workloads, but the switch to a DIY approach does not necessarily signal a decreased need for experienced professionals.
Both individuals and businesses are likely to continue to need accountants’ experience and trusted advice to manage their online bookkeeping and audit their data. Clients will still seek out the tax knowledge, strategic thinking, and financial leadership that experienced accountants can offer.
Many large accounting firms and small businesses alike have begun to adopt cloud computing services, which has proven to be one of the most substantial changes in the accounting world. Rather than relying on paper files or on-site data storage, many firms have changed to cloud-based computing services, which allow users to access data from virtually anywhere.
For certified public accountants (CPAs), cloud-based computing can offer unprecedented convenience, as they can easily access data when meeting with clients, when in the office, or when working remotely. However, some of the top-ranked cloud-based services do not offer the comprehensive software suite to which some accountants are accustomed. Accountants should expect a learning curve when adapting to new cloud-based software, and they may find that the recurring monthly or yearly costs related to cloud computing are somewhat higher than the one-time fee they may have paid for less integrated programs.
For some accountants, the idea of storing sensitive information, such as financial data, in the cloud prompts significant security concerns. While many cloud computing services already have more than sufficient security measures in place, newer software platforms may not do enough to protect sensitive information. No matter which platform they choose, accountants should take the time to research software providers carefully to ensure that they follow cybersecurity best practices.
Even firms that opt not to use cloud-based computing methods should remain vigilant about ensuring data security. Measures may include encrypting data, password-protecting machines and storage systems, and limiting data access to specific employees. As cyberattacks become increasingly common, accountants should continually educate their teams regarding best practices for email security.
Accounting firms of all sizes are likely to experience a range of staffing issues over the next few years. As many firms adopt increasingly complex technology, some may consider hiring in-house information technology (IT) teams, while others may decide to outsource tech assistance. As the Journal of Accountancy explains, firm size largely determines the decision to establish an in-house team rather than contracting outside assistance.
In many firms, accountants may find themselves at odds with colleagues over technology adoption, automation, and other contemporary issues. Writing for AccountingWeb, Deanna Arteaga explains that the multigenerational accounting firms of today are likely to cause at least minor friction, as employees navigate different approaches to communication, technology, and openness to change. While encouraging the skills and accommodating the needs of employees from multiple generations may prove challenging, doing so is likely to ensure that firms maintain longstanding values while embracing change.
With so many changes on the horizon, accountants will likely want to equip themselves with the skills and experience they need to stay ahead of the curve. Visit the School of Graduate and Professional Studies at New England College to learn how an online master’s degree in accounting could help accountants pursue advanced careers in this field.