What Are Accounting Trends?

 Accounting trends are developments and reactions to changing landscapes, technology and
other market forces that shape the accounting profession as we know it today.

How is the accounting industry changing? The change is rapid and driven largely by lightning-fast
advances in technology. In many ways, the pandemic has accelerated that adoption. For example, wider
adoption of cloud-based accounting software, as well as a move toward automation and artificial
intelligence.

1.Technology and Automation

Ever-evolving technology and a trend toward automation of repetitive accounting tasks are some of the
most exciting developments in the accounting industry. Some of the processes that are being automated
include approval workflows, bank reconciliation, journal entries, inter-company consolidation, revenue
recognition, lease accounting and depreciation.

While there are many accounting functions that can be automated, there is a lack of understanding of
the technologies and a lack of resources to implement them. But those that take the leap are reaping
the benefits. Some 70% of companies(opens in a new tab) that have automated more than one-fourth
of their accounting functions report moderate or substantial ROI.

2.Role of Artificial Intelligence (AI)

Across industries there’s consensus that AI can and will have a significant impact on finance and
accounting. Companies are using AI and robotic process automation (RPA) to automate mundane, highly
repeatable tasks, allowing accountants to focus their time on higher impact and higher value activities.
Accounting Firm EY, for example, has applied AI to the analysis of lease contracts to make it easier to
capture information quickly on commencement date, amount to be paid, termination or renewal
options and allow the finance professional to spend more time on making decisions with the data
instead of looking for it.

3.Accounting Software

For RPA to be successful, transactional data needs to be standardized and merged from multiple sources
in multiple formats, also known as harmonizing. Harmonization can involve bringing together structured,
semi-structured and unstructured data within a single system. AI needs vast amounts of data to be
effective. And above all, the outputs of all enabling technologies need to be trusted by the accountants.
That’s where accounting software comes in.

Some 36% of companies plan to implement cloud-based accounting solutions in the near future.
Enterprise resource planning systems can integrate your accounting software and your financial data
with other important areas of your business, such as supply chain, order and production management.
An integrated ERP platform consolidates data from these different areas to give you more actionable
insight into your business.

4.Data Analytics and Forecasting Tools

Among the accounting tips for both small businesses and larger companies, increasing the use of
budgeting, forecasting and planning software, as well as data analytics and visualization tools is one of
the most impactful. Finance functions are becoming significantly more analytical – and technology will
help push the accounting and finance department from reactionary and transactional to proactive and
analytical. As evidence of the demand for the increasingly analytical and tech-savvy accountant, IMA
recently launched it’s a Data Analytics & Visualization Fundamentals Certificate. The program is designed
to equip accounting and finance professionals with the strong critical thinking, problem-solving and
technology skills needed to advance business strategy.

5.Digital Transformation

Faster than perhaps ever before, organizations are transforming how they do business with the aid of
digital technology — and accounting and finance teams have been at the heart of it all. They’ve put
processes in place to account for new revenue from subscription models, new channels, new physical
and digital product offerings and more. One of the most pressing accounting challenges is leveraging
technology to support the business strategy and adapt to changing conditions.

6.Workplace Wellness

Workplace wellness programs continue to be a popular perk provided by employers but managing these
programs can be complex for accountants. For example, payroll managers and accountants must make
sure the discounts employees earn on health insurance through wellness programs are calculated
correctly as withholdings in paychecks. Accountants must also be mindful of changes to tax laws that
impact how the items in the wellness program count toward tax deductible business expenses. In
addition to hopefully boosting the health of employees, wellness programs can be a useful tool for
employee engagement. Accountants continue to report high rates of burnout and stress due to
managing too many responsibilities and should take advantage of programs whenever possible.

7.Online Collaboration and Remote Workforce

Especially useful with the trend of remote working, cloud-based software allows teams that are
physically dispersed to collaborate and accomplish critical financial processes, such as month-end close
from anywhere with a computer and an internet connection. Accounting will need collaboration tools,
such as Zoom, fort and functional collaboration tools for e-signature and cloud-based file sharing.

8.Evolution of the Accountant Role

In the future for accounting, more transactional work will become automated, and accountants will
increasingly be seen as leaders and decision makers. More and more, accountants must rely on the so-
called soft skills, leadership and other traits associated with emotional intelligence. These skills, paired
with training to leverage insight from data analysis and the financial expertise, are what will make for
successful careers in the future.

9.Data Security

Data breaches are a bigger risk than ever, and finance departments are one of the leading targets. The
breaches can lead to identity theft, or the stealing of personal data and credit card information, and
spoofing, which is when an email is disguised to appear to come from a known and trustworthy source.
Training in recognizing potentially harmful emails and spotting attacks will continue to be crucial for
accounting teams, who are already skilled in looking at the details and spotting anomalies. The
accounting team can share the importance and become champions of cybersecurity for your
organization.

10.Changes in Tax Policy

With nearly 6,000 pages in the 2022 Consolidated Appropriations Act — better known as the COVID
stimulus — accountants have their work cut out for them. Passed shortly before tax season in 2022, it’s
just the latest in a string of tax policy and regulatory changes, including tax extenders, PPP expense
deduction, second-draw PPP loans and simplified process for PPP loans under $150,000. Whether it’s
understanding total tax liability or navigating shifting trade and tariff policies, understanding changes in
tax policy is vital.

11.Statutory and Regulatory Compliance

Aside from taxes, accounting and finance teams need to be mindful of shifting statutory and regulatory
changes. Monitor and account for regulations, including COVID stimulus legislation. Changes in
leadership at the SEC are likely to impact financial reporting requirements and scrutiny.

12.Environmental, Social and Corporate Governance (ESG)

ESG will be in sharp focus for companies, and it’s widely expected there will be new federal regulations
pertaining to the areas within it – especially as it relates to financial disclosures for public companies.
These disclosures are likely to include mandated disclosure of climate-related financial risks and
greenhouse-gas emissions in your operations, as well as your supply chains. Additionally, major
investors are calling for increased diversity, which affects all areas of your business, including finance
and accounting. Professional trade organizations are aiming to help accountants prepare.

13.Accounting Standards

Throughout the year, the Financial Accounting Standards Board (FASB) issues accounting standards
updates about changes that could affect financial statements and how to keep them GAAP compliant.
For 2021, there are changes related to asset acquisitions, credit losses, debt securities, leases,
reorganizations, variable interest entities, and banking regulation disclosures.

14.Proactive Accounting

Machine learning and RPA are being used to reframe the approach to accounting. What’s become
known as continuous accounting uses automation and other technology to embed tasks that are
normally done at a period’s end into normal day-to-day activities. But the benefit of continuous
accounting isn’t just fewer late nights for your accounting team. By automating repetitive tasks, you
improve efficiency and data integrity, which frees up time for your accounting team because errors can
be a frequent source of time-consuming work. Your team can then focus on a culture of continuous
improvement by monitoring for efficiencies in processes.

15.Outsourcing

Organizations of all sizes may find some benefit in outsourcing some or all of their finance and
accounting functions. Smaller companies outsource accounting to avoid hiring additional headcount.
Larger firms may outsource some or all of their accounts payable, this is generally done to save money.
Additionally, outsourcing can sometimes give you access to skillsets, technology and expertise your
company would not easily or affordably replicate by hiring new headcount and investing in your own
infrastructure.