As we move through 2023 and technology continues to advance, while businesses weather shifting economic tides, the world of accounting is undergoing transformation. Leaders in the industry are those that are leveraging the likes of cloud software, artificial intelligence (AI) and automation, data protection services, and visualisation technology, and also understand the growing need for advisory services.
Gartner finds that 2023-2025 will mark a pivotal time for the financial industry, with those that are able to marry traditional finance with rapidly evolving digital skills and tools the ones that will move from strength to strength. On top of this, accountants and business leaders that aren’t able to take up new capabilities might not be able to keep up with the pace of change.
Leveraging advanced technologies, and being able to step into an advisor role, can help firms improve their level of service, insights and reporting in order to gain a competitive edge and help businesses achieve notable success.
1. AI and automation power and advance everyday tasks
With the rise of widely accessible tools that are powered by AI, this is the big topic on everyone’s minds. When it comes to accounting, AI tools that directly cater to the finance industry aren’t new, but their functionality is constantly evolving.
For instance, in 2023 AI can analyse financial data, generate reports, and even identify patterns and anomalies that suggest accounting fraud. In an industry underpinned by numbers and data, it’s also hugely powerful when it comes to automating repetitive tasks so staff can focus more on strategy and reporting, while also saving potential human errors.
One of the most exciting areas of AI advancement that we’re seeing is around data insights and decision making. When powered by AI and automation, accounting data comes to life. It enables firms to far more easily perform cash flow forecasting, analyse salaries, analyse business performance, assess financial conditions, and predict drops or rises in the market.
International Data Corporation (IDC) finds that global spending on AI, including software, hardware and services, will surpass USD $300 billion in 2026, up from USD $118 billion in 2022. This represents a compound annual growth rate (CAGR) of 26.5% over the forecast period, which is four times greater than the CAGR of the same period for worldwide IT spending (6.3%).
Such figures reflect a growing investment and focus on AI technology, which will inevitably have a continued impact on the world of accounting, with those willing to leverage the capabilities of the technology the ones that will come out on top.
2. Cloud-based accounting becomes a staple
One of the biggest changes in finance in the last few years is the rise of cloud-based accounting, with various software solutions bringing a whole new level of functionality and forecasting to firms and businesses of all sizes. Anywhere, anytime access, integrations with specialised services, and collaborative tools make cloud computing software services offer numerous potential benefits.
Over and above, the benefits we have seen stand out include the ability to reduce operations costs, flexibility of accessing data, minimised errors of data input, the ability to interact in real time with the same information, and the fact that not only the software but important changes in tax or other regulations are automatically kept up to date.
In addition, value-added services can greatly enhance reporting and forecasting capabilities. The best cloud accounting software is built for integration, meaning you can leverage the same stock data to generate reports. These reports can provide a clear overview into what’s happening into the business, including specifics such as cash flow, and offer insights that enable better decision making.
3. Data protection and compliance a top priority
Data protection and compliance are huge considerations in 2023, especially when it comes to dealing with sensitive information such as client data or financial information. The last few years have seen far greater importance put on data protection, with the likes of GDPR and different governmental privacy acts outlining strict guidelines for data handling and storage.
Failure to comply with these regulations can result in severe consequences, including hefty fines, legal action, and damage to a firm’s reputation. As such, it's crucial for accounting professionals to stay informed on the latest data protection and compliance regulations, and to implement robust systems and processes that guarantee safe and ethical handling of information.
In such a reality, technology is assisting accounting firms to capture and protect data better, and adhere to regulations accordingly. Automated, built-in compliance can generate greater peace of mind and help firms to prioritise data protection and compliance in their practices, in order to safeguard sensitive data and maintain the trust of clients and stakeholders.
4. Visualisation tech in greater demand
Visualisation technology is becoming increasingly important for accountants in 2023, as it allows financial data to be presented in a way that’s accessible, informative and greatly aids in business decision-making.
Through the use of graphs, charts, and other visual aids, complex financial information can be distilled into easily digestible formats, allowing stakeholders to better understand their business or franchise, and make more informed decisions. This technology also allows for real-time data analysis, providing accounting professionals with a deeper understanding of business performance and trends.
On top of this, visualisation technology can help identify areas for improvement and potential risks, enabling businesses to take proactive measures to address any potential issues. This is especially important during uncertain economic times when businesses are looking for ways to ensure profitability and mitigate changes in customer behaviour or costs.
5. Advisory services level up firm’s reputation and offering
Advisory services have become a staple for leading accountants in recent years and through into 2023, as businesses more commonly seek strategic guidance and insight. While traditional accounting services such as bookkeeping and tax preparation are still important, advisory services offer a higher level of value by providing a broader perspective on all things financial.
Offering insights on financial planning, forecasting, and risk management, allows accountants to help businesses make more informed decisions and have a higher chance of achieving their strategic aims. On top of this, advisory services can help accountants build stronger relationships with their clients, by becoming a trusted partner in their business success.
As a result, accountants who offer advisory services can differentiate themselves from competitors, and provide a higher level of service that is increasingly in demand from businesses of all types and sizes.
Ongoing change and increased opportunity
The accounting industry is set to undergo a number of exciting changes and developments in 2023. From the continued rise of digital technologies such as AI and cloud software, to the increasing importance of advisory services, these trends will have a significant impact on how accounting professionals work and the value they provide to their clients.
By embracing these trends, firms can gain a competitive edge, help clients to enhance their financial performance, and better manage risk. However, it's important for accounting professionals to stay informed and adaptable, as the pace of change is only set to accelerate in the years ahead. Overall, the future of accounting looks bright, with many opportunities for innovation and growth.