Even prior to recent events and conflicts impacting business landscapes, the necessity for rapid and efficient digital transformation had already been lingering on the accounting industry’s periphery.
As accounting firms race against employee resignation, growing churn rates, and repetitive cases of data leaks to enter the new digital phase and replace challenges with growth, understanding emerging trends in accounting software becomes crucial to successfully managing change. To assist with this objective, our article provides a comprehensive breakdown of future trends in accounting and outlines their impact on the industry.
Future of accounting software: the human element behind the technology
In addition to familiarity with new technology in accounting, decision-makers need to understand the human factor behind the change and how it influences the transformation.
Following the increasing tendency for collaboration and cooperation with external partners and service providers, businesses face the new challenge of managing their expanded networks and risks.
Due to this, they rely on their accountants to help them analyze opportunities and identify potential complexities within each new collaborative relationship in a timely manner. Accordingly, when identifying their technology upgrade priorities, accounting enterprises need to pay attention to the following areas:
Accelerated data analysis
Implementing a faster and more dynamic approach to processing data from multiple data systems to provide a more comprehensive and insightful output.
Introducing ways to cut repetitive tasks and invest more hours into objectives that require full attention from accountants.
Securing an efficient and productive system for onboarding and training accountants to work with new tools and solutions.
Safe data processing
Adding new cybersecurity layers for safer customer data management and collaboration, especially when working with region-sensitive data.
As isolated businesses are fading into the past and new business models choose collaboration and networking as their foundation, the role of accounting enterprises is more relevant than ever. As accountants help businesses navigate new, complicated relationship systems to identify risks and seize opportunities, they need to ensure they are equipped with the right technology and knowledge.
In this regard, nipping data discrepancy issues in the bud remains the centerpiece of accounting efforts.
- More growth, fewer growing pains
As the company grows, so does its intracompany data movement. With more data to process, recordkeeping is more likely to go wrong. Therefore, company leaders focus on minimizing risks and building solid data chains.
- Safe conditions for investorsSince the pandemic, investors have become more self-conscious about entrusting a company with their money. They expect nothing but complete clarity of all transactions, audits, and reports they receive.
- Effective crisis management
Weathering through a crisis starts with seamless communication between departments and accurate business data. Business owners need in-depth knowledge about their capital and liquidity to be more prepared for potential challenges.
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Accounting industry trends in 2024: what technologies are shaping the new workflow?
While both businesses and accounting firms adapt to new needs and approaches, awareness of emerging trends in accounting software becomes crucial to making investment decisions. Therefore, it makes sense to refresh and understand the patterns currently influencing the tech market.
1. Harnessing the power of AI for competitive advantage
With AI delivering value to a wide range of sectors and nearly 45% of executives increasing their investments, there is little surprise that artificial intelligence adoption has become one of the most rapidly advancing trends in accounting software.
As the AI in the accounting market is predicted to grow to $4,791 million in 2024, companies of all sizes, from mid-size firms to Big Four leaders, stay focused on incorporating both evident and non-obvious benefits of generative and conversational AI solutions into their workflow.
- Increased data analytics and forecasting accuracy
Generative AI solutions provide fast data processing and analysis, which makes them a powerful asset for analyzing accounting data and identifying flaws, patterns, and trends. Additionally, the capabilities of AI make it possible to process large amounts of financial data (cash flow and transactions) within a much shorter time, generally accelerating accounting enterprise processes and decision-making.
- Productive customer support
Conversational AI solutions such as chatbots and virtual assistants provide a better and more efficient alternative to a FAQ section as they handle customer questions and requests. By processing customer queries via keywords and coming up with personalized responses, AI-powered bots help with optimizing human resources and ensuring that human employees handle the most urgent and relevant matters.
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2. ERP platforms are still in demand
Formerly a budding yet confidently growing trend, switching from accounting software to ERP systems has paved the way for ERP-centering thinking across accounting firms. Instead of simply adopting platforms, they are progressing towards embracing a brand new mindset that requires seeing ERP solutions as a set of capabilities and features rather than a monolith.
As a result, further ERP adoption would increase the need for in-depth engineering insights and experience with managing system dependencies.
- Improved data integration
Combining several important data types (accounting activities, financial operations, production management reports) within one platform allows for enhanced decision-making accuracy. By offering better data organization and more features for data analysis, ERPs considerably reduce the risk of data discrepancies and silos.
- Cost-effective expense management
ERPs become particularly relevant for large enterprises that need to manage vast resources and departments. By using one platform to manage diverse transactions, accounting firms and organizations are able to save budgets on various processes, from employee training to new service launches.
- Advanced flexibility and customization
Compared to rather rigid accounting solutions, ERPs have flexible architecture, enabling expanded configuration and integration options. Additionally, ERPs enable working with several currencies and tax regimes, which is essential for companies operating across the globe.
3. Automation’s transformative effect on productivity
As the financial accounting area shows the highest (56.8%) potential for automation, accounting automation trends found themselves under detailed scrutiny of Big Four leaders that seek to keep up with modern challenges and set new performance standards for accounting enterprises worldwide.
- Guaranteed payback
On average, companies that piloted RPA solutions saw a return on their investment within less than 12 months. Although some investors expected to see ROI in 9 months, they admitted that there was a misalignment between their expectations and reality, which affected their calculations.
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- Accumulation of non-financial benefits
Aside from improved investment certainty, automated solutions empower accounting enterprises with optimized time management, more accurate task execution, and expanded flexibility options, leading to an increase in overall productivity.
- Upskilling accountant roles
The implementation of new technology goes hand in hand with the expansion of human skills. Therefore, CFOs are becoming interested in nurturing accountants who are willing to add new technological skills and contribute to new digital approaches that will transform the enterprise.
Such a development allows accountants to add more impact to their role within companies and become a driving force behind trends in the accounting industry.
4. The ongoing rise of hybrid working models
The hybrid work model is settling in across all industries, with 39% of workers estimated to work from home by the end of 2023 and accounting and finance being among the top remote work careers. For many economists, the near-complete transition to hybrid work environments is a matter of "when," not "if," which prompts accounting firms to invest in tools and platforms for securing productive collaborative experience.
- Providing digital workplacesTo ensure uninterrupted work processes for both on-premise and remote employees, enterprises need to go beyond traditional accounting software and established approaches to collaboration, introducing a new agile digital strategy and a comprehensive digital workspace that provides all the tools (from project management and BI & reporting to market growth & analytics) necessary for maintaining productive performance regardless of the location.
- Establishing feedback loops
As nearly 99% of accountants were documented to suffer from work burnout in 2022, the feeling of isolation and not being on board with the company's journey, which can accompany employees working remotely, might escalate this issue further. To avoid this, employers need to harness the latest collaboration and communication tools to introduce a system of well-being checks and calls with employees. This involves acknowledging them for their efforts, updating them on their progress, and allowing them to voice their suggestions.
- Creating a scalable infrastructure
As fewer workers are expected to attend office on a day-to-day basis, companies need to explore more flexible options that can improve their OpEx/CapEx ratio. Cloud technology became the most commonly adopted solution, with nearly 81% of enterprises having a multi-cloud strategy in place.
5. Continuous focus on data security
Cybersecurity remains one of the most unchanging accounting industry trends, but the price of failing to follow the latest guidelines keeps growing—with the cost of an average data breach going beyond $9 million. The matter of hacker attacks becoming more aggressive and the emergence of hacker groups sponsored by terrorist states left businesses, organizations, and institutions concerned about data safety and investing in new technologies to protect customer information.
- Less vulnerable data storage
As hackers prefer to target databases, business leaders need to reimagine their approach to storing data — from introducing new protection protocols to changing their database structure.
- Improved employee safety
Since spear-phishing (reaching out to company employees under the guise of a C-level executive) is responsible for 66% of data breaches, accounting firms continuously upgrade their security measures to prevent cybercriminals from exploiting both their clients and employees.
6. Making data visualization part of financial storytelling
Given that data visualization tool market size is expected to reach over $22 billion by 2030, enterprises are on their way to harnessing the potential of converting big data insights into comprehensive visual information that accelerates decision-making. This trend didn't bypass accounting technologies, introducing new advanced solutions that offer a deeper look into financial transactions, internal auditing, and regulatory compliance.
- Putting enterprise accounting under microscope
The ongoing development of process mining tools allows enterprises to do more than discover most beneficial automation candidates. It lets leaders and executives dissect every enterprise process, mapping it out and breaking it down into iterations. For accounting, process mining enables a transparent outlook on operations, identifying risks, and visualizing process history for more productive audits.
- Enriching cross-enterprise decision-making with illustrated insights
In addition to improving analytics, accounting data visualization tools turns complex data into comprehensible business cases that can be presented to stakeholders. Such a feature allows bridges communication gaps and helps executives better illustrate the state of enterprise accounting and how it impacts the company's growth.
7. Adding agility and transparency with blockchain
Previously a novelty, now a part of mainstream financial activities, blockchain technology is expected to represent a new iteration of accounting, providing a safer, more transparent, and satisfactory experience for all departments and users involved.
- Immutable bookkeeping
Utilizing digital ledger technology will allow for faster and more efficient audits while considerably reducing the risks of human error or data fraud—as all records are stored immutably and in chronological order, the story of changes and additions becomes easier to track, embedding more transparency into processes.
- Faster, bureaucracy-free transactions
Since smart contracts can be used to oversee financial transactions and operations, they present an opportunity for much faster and more reliable processes handled without intermediaries, thus enabling a clearer picture.
- Greater expectations from employees
In the case of blockchain technology making itself at home at BFSI organizations, educating tech-savvy professionals to meet new needs and be able to interact with new solutions is now imperative for accounting service providers.
The future of accounting software: technologies to bear in mind
When it comes to figuring out the technology that would make an impact on the world of accounting software, there are three leaders capable of addressing the key needs and building value.
- Delivers better transparency by recording data immutably and in chronological order.
- Provides advanced security via decentralized data storage and encryption.
- Makes accounting data accessible to customers by granting special permissions and eliminating bureaucracy.
- Removes data discrepancies by ensuring consistent data flow across all digital ledgers.
- Automates accounting tasks such as real-time reports, calculation of allocations, and complex journal entries.
- Embeds accuracy and clarity with ML-powered forecasting.
- Analyzes millions of data points for signs of fraud and improved regulatory compliance.
- Runs automated audits on all company documentation, providing accurate data and facilitating risk analysis.
- Adapts to hybrid working models due to instant data accessibility.
- Secures vital data with regular backups and end-to-end encryption.
- Allows saving up on hardware by replacing it with virtual infrastructure.
- Establishes smooth back-and-forth data exchange with clients, generating trust.
How to stay prepared for future trends in accounting?
Figuring out what new technology in accounting would drive the best results for the company's processes is a multiple-step campaign. Decision-makers need to evaluate the skills of their team, their ability to adapt to new tools and technologies, and the top-of-mind needs of their target audience. Additionally, business leaders need to get a detailed view of each prospective direction and how it can make an impact on their focus area. The last part is particularly complicated since it requires a perspective from professionals familiar with the technology.
However, business leaders don't have to go through such an effort alone. As it was mentioned, no enterprise is an island these days. By reaching out to a trusted digital product partner, business leaders become able to identify the right trajectory for their growth and map out a seamless journey into the future of accounting software.
If you already know what you need to help your enterprise keep up with the new demands and challenges, let’s chat! Equipped with a Big Four level of expertise in accounting processes and innovation adoption, our team will navigate you across the most relevant trends, helping you ideate the perfect concept for your transformation and turn it into an game-changing product.