What Does the Future of Accounting Look Like?
The accounting field is transforming rapidly due to advancements in technology and the growing use of automation and AI. The future of accounting will see professionals using technology more than ever to streamline their work, enhance accuracy, and provide better insights.
Many accountants worry that technology could make their skills outdated. However, embracing technology is not about completely changing how they work. Instead, it involves using tools that improve and refine existing processes, making accounting less manual and reducing errors. For instance, AI-powered accounting solutions can automate tasks like journal entries and account reconciliations. This shift allows accountants to focus on more strategic and valuable tasks.
Technology Will Support, Not Replace, Accountants
In 2015, many leaders believed that technology would end the role of accountants. They thought automation would take over their jobs. By 2019, a survey by Robert Half showed that accountants were worried about being replaced. They feared losing chances for creative problem-solving and becoming too dependent on technology for daily tasks.
However, since then, especially during the Covid-19 pandemic, it has become clear that accountants need to focus more on adapting rather than worrying about being replaced.
Digital transformation has changed the industry significantly. Big data is now a valuable resource that businesses must use to stay competitive. For those ready to embrace digital tools, this change is an opportunity, not a threat.
Future of Accounting industry-Key areas under transformation:
The future of accounting will certainly revolve around four aspects, primarily related to the nature of the job, the use of technology, the need for outsourcing, and advisory services. What is certainly not going to happen is the loss of jobs to machines, despite all the brouhaha about AI, machine learning, and new technologies. In this context, there is one point that needs mention: it is not possible to replace all human roles.
While technology will certainly change the roles and bring in automation for greater efficiency and AI-assisted decision-making, it is hard to foresee machines taking over all roles, especially when it comes to number crunching and financial transactions.
While blockchain as a technology would certainly be a disruptive force and a game-changer in accounting, it will still be difficult to replace a certified, specialist team of accountants who offer tax advisory services and assist clients in understanding provisions of taxation and exemptions. As a distributed ledger, blockchain will simplify operations and improve compliance but will still require an accountant to handle other aspects of accounting and taxation.
1. Job descriptions
Job descriptions will change and will certainly not be similar to what they were earlier. Technology-driven tasks will demand the accounting profession to hone their skills and blend them with technology for optimum results. A lack of proficiency in advanced applications will certainly be a handicap, and accounting firms that do not embrace technology or upskill their resources will find the going tough. Globally, as standards are put into place for more seamless governance, it is only a matter of time before transactions become fully digital.
This will then necessitate the use of bookkeeping software, applications, and accounting software that are compatible with or adhere to a fixed standard. Accountants in businesses that do not have the necessary resources or budgets for all the mandatory applications and skilled manpower will find outsourcing accounting services to be the best option.
Large companies with high volumes of transactions, and the financial resources to afford a separate department, will be in a position to maintain the right kind of trained and certified accountants with the necessary software. Here, the search will be for accountants who are highly qualified and certified, as other repetitive tasks that require no human intervention will be handled by AI and blockchain.
2. Technology-assisted roles
This aspect overlaps with the roles of accountants and resources mentioned above. Accounting technology will continue to impact functional areas. As algorithms become more complex and computing power increases, the technologies currently available for accounting will improve, making compliance, bookkeeping, and accounting more streamlined and seamless.
A shakeout is expected, as packages and applications that do not offer a full suite of services will not make the cut. Advanced, future-ready, flexible, user-friendly, and uncomplicated accounting software will gain traction, while mediocre offerings will fail. However, possessing software alone will not fully prepare an organization for accounting.
A business lacking the necessary knowledge of accounting, VAT filing, and taxation procedures will face challenges. Systems and packages should be implemented after hiring the right resources, not the other way around. Presuming requirements upfront can backfire and lead to unnecessary CapEx.
Five different factors will stand out on the accounting technology front.
Future of Accounting Industry on the ‘Cloud’
As more businesses move operations to the cloud, accountants will be expected to follow suit. This benefits both businesses and accountants. It reduces the time needed to transmit documents and reports, allowing both parties to view and share information in real time, regardless of location or device. This enables accountants to provide superior service to clients at reasonable costs.
Big data
Accountants will see a change in roles as businesses demand insights and analysis. By examining data, accountants can help businesses understand their financial health and identify potential gaps or underperforming areas. Data viewed in isolation and as comparative statistics provides valuable insights. Accountants who analyze numbers will better understand how different areas are performing and how specific sections have fared over time. Interpreting these numbers will help businesses plan better, and in the future, accountants will be expected to provide figures that offer insights.
Mobile first
As businesses increasingly adopt BYOD and the lines between official and personal devices blur, the demand for mobile access to reports and data will grow. Accountants will face new challenges. Not only will they need software optimized for mobile use, but they will also need to keep reports up to date. As business owners seek reports on demand, data must be updated in real time. While technology will handle most processes, accountants must oversee data integrity and ensure reports present accurate figures.
Blockchain
This will be one area that experiences the biggest changes in the shortest time. As a proven ledger technology, blockchain is highly suitable for accounting and is set to be a disruptor. As blockchain develops, its features and uses will improve, making it the default technology for accounting.
Accounting requires a foolproof, highly secure application, and blockchain offers the design and concepts needed for greater security and operational efficiency. As an online ledger, blockchain allows stakeholders to view transactions, with only a few authorized to make changes. This makes the process transparent and secure.
As blockchain gains acceptance in accounting, processes will speed up. It is changing the dynamics and future of the accounting industry, giving accountants more time to focus on areas requiring intuition and data interpretation.
Automation
The number of applications handling invoices and automated bank reconciliations has increased, with high-speed processes now used to scan invoices. While hard copies still exist, it’s only a matter of time before most are phased out.
With advanced bookkeeping software and better parsing skills, automation will advance to the next level, offering greater assistance to accountants. Intelligent accounting software will improve efficiency, and most transactions will be safely handled through automated processes.
However, as mentioned earlier, automation and AI will assist accountants, not replace them. Some functions will be more effective and efficient, but they will always serve as enablers. Automation will reduce the time taken to complete processes, benefiting both businesses and accounting firms. So, it’s clear that the future of the accounting industry revolves around automation.
3. Outsourcing
Outsourcing will be the preferred option for accountants in organizations facing tighter budgets. This model has benefited many back-end processes. Accounting is a specialized field that requires expert resources. A separate department is only cost-effective when the organization’s size or transaction volume justifies it.
For businesses with fewer transactions or smaller sizes, outsourcing accounting services is an attractive option. They can rely on bookkeeping software to stay compliant and file returns. Technology has eliminated location barriers, allowing accountants to benefit from lower costs and specialized services from agencies in different regions.
However, since accounting involves local regulations, it’s important to ensure that offshore agencies have the necessary skills to meet compliance requirements. Accountants will also outsource general or basic tasks, like data entry, when compliance is minimal. For example, data entry can be outsourced if the agency uses standardized software.
4. Advisory Services
Advisory services will play a key role in accounting services. Regardless of the technology used, accounting firms must offer insightful advisory services. An experienced and certified accountant understands business situations and provides timely advice to guide businesses toward success. The future of accounting will focus more on specialized knowledge, while technology handles basic tasks like compliance.
As scams increase, compliance and regulations have tightened to prevent practices such as tax evasion. Transactions will face greater scrutiny, so accountants must ensure that all transactions comply with the law, relying on specialist services for guidance.
Communication technology has significantly impacted accounting services. What was once available only to large companies is now accessible to firms of all sizes, thanks to the integration of IT and communications.
IT can deliver results, but only when supported by strong communication networks. As these networks spread IT services globally, businesses have more reasons to rely on offshore accounting services. However, while technology eliminates distance, regulations and compliance remain unchanged.
Accountants working with offshore firms must ensure that these firms have the necessary expertise, particularly regarding local laws.
As we’ve explored, the future of accounting is not a dystopian vision of robots replacing human accountants. Instead, it’s an exciting era of collaboration between humans and technology. While automation and AI will streamline routine tasks, the core of accounting – analysis, strategy, and client relationships – will remain firmly in human hands.
Accountants who embrace technology and upskill themselves will be well-positioned to thrive in this evolving landscape. They will need to:
- Master Digital Tools:Proficiency in advanced accounting software, data analytics, and cloud-based solutions is essential.
- Develop Critical Thinking Skills: The ability to analyze complex data, identify trends, and provide strategic insights will be highly valued.
- Cultivate Strong Client Relationships: Building trust and providing personalized advice will remain paramount.
- Stay Updated on Regulations: As tax laws and accounting standards change, continuous learning is crucial.
Ultimately, the future of accounting is bright for those who are adaptable, innovative, and committed to delivering exceptional value to their clients. By embracing technology as a tool, rather than a threat, accountants can unlock new opportunities and shape the future of their profession.
Parul is a dedicated writer and expert in the accounting industry, known for her insightful and well researched content. Her writing covers a wide range of topics, including tax regulations, financial reporting standards, and best practices for compliance. She is committed to producing content that not only informs but also empowers readers to make informed decisions.