Accounting trends and techniques are always evolving, especially as new technologies and modern accounting methods emerge. To put this into perspective, as automation and high-tech systems redirect the future of accounting, Sage has found that 90 percent of accountants feel accountancy is undergoing a cultural shift that leans into technology. In line with this evolution, here, John Savignano, the CEO of Savignano accountants & advisors in New York, predicts accounting industry trends that will likely shape the sector’s future in the United States. Aspiring and current accountants should keep up with these developments to remain competitive in the finance space and build the next successful accounting firms.
Here they are — eight accounting trends 2022:
1. Remote Technologies and Remote Working
Before the Covid-19 pandemic, most office staff worked in-house. But this workforce style is fast becoming outdated, and many companies are realizing the benefits of remote work, such as improved flexibility and lower overhead costs. This is true in many industries, including accounting, where cloud-based software, virtual communication tools, and secure online data storage allow accountants to complete their tasks from home.
2. Improved Data Security
As accounting firms step up their electronic data share, cybercrime is on the rise. And, in accounting, even a minor security breach can lead to identity theft. As a result, accounting companies need to protect themselves against data security issues by taking steps like implementing two-factor authentication systems (so only authorized users can access data) and providing employees with cybersecurity training.
3. Advisory Accounting Services
Advisory services are one of the current trends in accounting. Accounting companies can stay competitive by expanding beyond traditional bookkeeping and tax preparation services to offer these services. Advisory accounting services involve providing recommendations on technologies that clients can use to improve efficiency or solve problems in certain areas of their businesses, such as human resources or operations software management. Accountants who stay atop developments in financial technologies are in strong positions to offer accurate insights and provide clients with valuable advice.
John Savignano emphasizes the importance of offering accounting services that set you apart from other practices and futureproof your business: “When I meet people, especially new clients where they’ve interviewed other accountants, the first thing they say is you’re different from everyone else.”
4. Automated Processes and Artificial Intelligence
Manual data entry is already a thing of the past. Today, accounting firms can keep up with industry trends by automating their processes to save time and money while improving data accuracy. In 2019, Sage research found that 58percent of accounting professionals planned to automate tasks using artificial intelligence (AI) over the next three years.
Accounting companies can achieve automation by making use of software like robotic process automation (RPA), which uses AI to perform repetitive tasks quickly and accurately. This kind of software is ideal for tasks like identifying fraudulent transactions, managing customer relationships, preparing financial reports, and analyzing documents, freeing up accountants to work on higher-value, higher-impact tasks.
“Technology is replacing a lot of the labor and shouldn’t be as costly anymore,” John Savignano says. “So, (companies) have to find other ways of making revenue on the accounting side.”
5. Value-Based Pricing
New accounting trends will likely also see the rise of value-based pricing. As accounting is a service-based industry, clients need accountants who meet their specific needs, not accountants who sell services at any price point. As a result, the future will likely see fewer accountants performing tasks without discussing costs in advance, especially given the rise of automation. This way, accounting businesses can avoid pricing surprises and the damage to client relationships that can follow these surprises.
6. Blockchain Technology
Blockchain technology is a distributed ledger technology that enables secure, tamper-proof transactions and will likely transform the ways that many businesses operate. Blockchain technology is already revolutionizing the accounting sector by reducing the costs of reconciling and maintaining ledgers. Future applications for this technology will likely include audit trails, payments, and invoicing, reducing the need for third-party intermediaries like banks and auditors. Statista projects that U.S. firms will likely spend around $1.1 billion on blockchain technology by the end of 2022. Therefore, accountants must understand how the technology works as the industry moves forward.
7. Data Analytics and Forecasting
As financial data becomes increasingly complex, a solid understanding of data science is becoming more important for accountants. Advanced analytics and forecasting techniques can enable accountants to interpret high volumes of data and create forecasts. Therefore, accounting companies may invest in data science training programs so employees can hone their SQL, Python, and Excel skills.
8. Hiring Accountants Who Have Diverse Skills
As the accounting landscape evolves and the demand for accountants in the future grows, many accounting firms are looking to recruit certified public accountants (CPAs) who boast diverse skills. Now that accounting has progressed to more of a consultant role, accountants need a strong understanding of data analytics, the latest technologies, and modern business concepts. As the accounting industry continues to shift, accountants must consistently update their skills to ensure they’re at the forefront of industry trends.
About John Savignano
John Savignano CPA is the CEO of Savignano accountants & advisors in New York and an adjunct professor at Fordham University, where he provides students with experience-driven accounting lectures and seminars. Having dedicated over 35 years to the accounting arena in the United States, specializing in tax and advisory services, he has served small- and middle-market-size businesses, Fortune 100 companies, and an array of high-net-worth individuals.