The Future of Accounting: Trends and Predictions

The Future of Accounting: Trends and Predictions

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In 2019, a Sage survey found that 90% of accountants believed accounting was experiencing a cultural shift thanks to rapidly evolving technology. No one could have predicted how much tech would change the accounting field in just a few short years. The pandemic accelerated the adoption of cloud-based finance apps, data analytics tools are more prevalent than ever, and artificial intelligence has shaken up nearly every industry—accounting included.

At the start of 2024, it’s clear that the accounting field is still changing rapidly. This is partly due to AI and other tech, but it’s also a response to evolving regulations and an increased focus on professional development in the industry. Here’s a quick look at five trends that show you where accounting is headed soon.

AI and Automation Will Positively Impact Accounting Roles

After years of bubbling under the surface, AI became a mainstream phenomenon in 2023. What was once the province of researchers and data scientists is now an everyday tool, thanks to ChatGPT, Google Bard, and Microsoft’s revamped Bing. These chatbots demonstrate the power of generative AI in a friendly and easy-to-use package. 

The chatbots also stoked widespread fears that AI will soon disrupt millions of professional jobs. Interestingly, accountants agree that AI and automation signal significant changes to traditional accounting roles while not displacing them. A Moss Adams study found that seven in ten accountants believe AI will change their jobs positively.

Accountants’ enthusiastic response to AI can be chalked up to the automation of many repetitive tasks. General data entry, invoice processing, and the reconciliation process are full of time-consuming steps that AI solutions can quickly automate. As every major software vendor steps up its AI efforts in 2024, accounting software will offer more automation features, freeing up finance staff for more essential tasks like analysis and strategic planning.

Data Analytics Will Become Central to Decision-Making

With more time to devote to what the data is telling them, accountants are increasingly turning to data analytics for decision-making. It’s a natural evolution, as accountants are trained to aggregate information and find the big-picture story contained within. While analytics features have always been a part of high-end finance software and ERP suites, even basic accounting apps now offer data-driven insights.

These trends have shifted job duties from standard bookkeeping to analyst roles. Among the emerging fields are:

  • Descriptive analytics is the classification and categorization of revenue, expenses, and other journal entries.
  • Diagnostic analytics is the study of variances and why they occur.
  • Predictive analytics, where data is evaluated to determine the likelihood of specific outcomes.
  • Prescriptive analytics is a close relative of predictive analytics that helps determine an organization’s best financial path.

Throughout 2024, CFOs and CEOs will turn to their teams for the answers analytics provide. The US Bureau of Labor Statistics has noted the trend and reported faster-than-average growth for financial analyst jobs over the next decade.

Blockchain Adoption Slows But is Still Relevant

Industry analysts have predicted the rise of blockchain technology for years. However, by the end of 2023, ledger technology adoption had slowed somewhat. That’s likely due to blockchain’s association with cryptocurrency and the crashes and scandals that have rocked the crypto industry. Don’t count it out quite yet, though. When combined with recent developments in AI, blockchain promises unprecedented levels of automation and accuracy.

Top industry executives and observers still expect blockchain features to impact the entire financial industry soon. Large investments in blockchain projects at Citigroup and JPMorgan are expected to pay dividends in 2024. In particular, the latter is rolling out a blockchain network to facilitate customer transactions. These high-profile developments indicate that accountants would do well to learn the technology in the upcoming year.

Evolving Regulations Influence Accounting Practices

Shifting regulatory standards has always shaped the accounting industry. At the start of 2024, things are no different. As accountants embrace AI and other automation technology, they must monitor new legislation. Concerns over data privacy and cybersecurity prompted the European Union to adopt the AI Act, the first significant regulation of artificial intelligence. Similar legislation will likely arise in the United States in 2024.

Another hot likely to be the subject of evolving regulation in 2024 includes the responsibility to detect, track, and mitigate financial crime and fraud, with some industry experts predicting “threat actor” laws And as the global economy continues to pull out of post-pandemic inflation, accountants will need to keep a close eye on the Fed’s interest rate adjustments, among other regulatory activity in 2024.

Accounting is Changing Faster Than Ever

These trends represent a previously unseen amount of changes in the accounting industry. While accounting practices have certainly evolved, it’s rare to see so much change simultaneously. It’s an exciting time to be in the field, as technology relieves accountants of repetitive tasks, allowing them to take an active role in strategic planning and decision-making. To stay on top of 2024’s trends, follow MRINetwork for insight into the future of accounting and all industries.