What Does The Future of Accounting Hold
Forget about flying cars and teleportation devices. The real game-changer lies in the revolutionary advancements in technology and AI that are shaking up industries, including accounting.
In fact, 35% of businesses already utilized AI in 2022, a 4% increase from the previous year. The global AI market was estimated at a whopping $119 billion and is expected to reach a staggering $1,590 billion by 2030. This means that accounting, and other industries, are evolving at a breakneck pace.
The future of accounting is already here, and it’s armed with cutting-edge tools and technologies that are transforming how businesses handle their financial needs. These tools are faster, more efficient, and more accurate than ever, making traditional accounting methods look like fossils.
But that’s not all. Some accounting trends are changing the game and revolutionizing the industry.
So, if you want to stay ahead of the curve, you need to keep an eye on these six trends that are taking the financial world by storm. Get ready to embrace the future with open arms!
Accounting Technology + Humans, Together
As technological advancements continue to emerge, many question their impact on different industries. Specifically, what is the role of next-generation accounting technology in the future of accounting, and how will it affect people?
Although some people worry about technology replacing humans, forward-thinking companies view it as a tool to enhance and assist the work of their highly skilled employees, particularly in the field of accounting.
For example, here at hiline, we’ve embraced new accounting technology to automate repetitive tasks, take care of mundane things, and ease the workload of our experts. That way, they can handle more advanced and “human-only” tasks like analysis. They’re not bogged down with monotonous things that a computer could easily handle and have more capacity for mission-critical tasks.
It’s crucial to recognize the importance of accounting technology as it will undoubtedly play a significant role in the future of accounting. Nevertheless, we believe that accounting technology will work harmoniously with skilled accounting professionals who can leverage sophisticated accounting tools to enhance their capabilities.
Accountants and financial experts are responsible for a wide range of financial reports. However, sustainability reporting is a new type of report that may soon become part of their responsibilities.
While sustainability reporting has not been traditionally included in their duties, accounting experts believe this is changing. They say, “Sustainability reporting has been rising steadily up the accountancy agenda.”
Sustainability reporting is a type of report that shares how a company’s operations and performance affect the world around it. It covers topics such as environmental, societal, and governmental issues.
It’s necessary for responsible companies to be transparent and accountable to stakeholders. It helps identify risks and opportunities, improve efficiency, and build trust with them.
While some aspects of sustainability reporting are mandatory, many are voluntary. For example, a company may have to report its CO2 emissions.
Sustainability reporting can have a significant impact on the value of an organization. It can influence a company’s reputation, which is crucial for a startup. Accountants are well-equipped to take on the responsibility of sustainability reporting because they are already proficient in the reporting process.
Outsourcing Entire Accounting Departments
Outsourcing might sound alarming, but don’t let this little word scare you (or your in-house financial professionals). In the future of accounting, outsourcing will clearly play a role and a positive one at that. Overall, studies tell us that 66% of businesses in the US already outsource at least one department and the outsourcing market is only expected to grow in popularity.
Outsourcing accounting functions can be cost-effective for organizations looking to save money. Compared to traditional in-house options, outsourced accounting services are often more affordable. Additionally, these services are modular, allowing organizations to use them as needed as they grow.
For example, here at hiline, we offer bookkeeping, finance, tax, HR and payroll, and outsourced CFO services, and our partners might choose to use either some of our services or all of them together. Plus, with outsourced accounting, companies don’t need to compromise on quality, as outsourced accounting providers can handle everything from reporting needs to complex payroll.
The future of accounting is definitely outsourced in many cases. These solutions allow startups to conserve valuable resources and spend their budget elsewhere while still getting the world-class accounting services they deserve.
Employee ownership is not a recent development, but it has gained significant traction in recent years. Essentially, this model involves granting ownership of company stock shares to its employees.
By doing so, no single entity can hold most of the stock, resulting in a more democratic distribution of ownership. This approach can have many benefits, including increased employee engagement, improved productivity, and a stronger sense of loyalty to the company. Ultimately, the success of an employee ownership model will depend on a range of factors, including the company culture, the nature of the business, and the attitudes of employees towards ownership and investment.
According to HBR, employee ownership benefits both workers and owners. Companies with certain amounts of employee ownership are more productive, grow faster, and are less likely to go out of business than their competition. Additional research shows that “ employee-owners have higher wages and net worths, receive better benefits, and are less likely to lose jobs to cuts.”
The Evolution of Taxation
As the old saying goes, only two things are certain in life: death and taxes. But what isn’t certain is what the future of taxes might look like and how this influences accounting. Of course, many accounting experts also handle the tax obligations for businesses, and as taxation evolves, their responsibilities do so as well.
We already have an idea about some aspects of the future of taxation. For example, the 2017 Tax Cut and Jobs Act (TCJA) is set to expire in 2025, and certain tax brackets will change.
But as far as the overall future of taxation, the IMF has identified what it calls “mega trends” which are shaping the landscape of taxes as we know it. These trends are driving changes, and they are:
- Population dynamics
- Global public goods
While the exact ways that taxation might evolve remain to be seen, it seems fairly clear there will be changes to this space in the future.
Careers in Accounting
Sure, the days of the abacus might be behind us, but we can still expect to see big changes in the future of accounting careers. The past few decades have brought significant transformations in how those in the accounting space do their jobs (don’t forget, the electric calculator was only invented in 1967).
While we don’t have a crystal ball, we can look at recent changes in accounting careers and technologies to see what the future might hold. For example, it’s clear that the future of accounting is digital and that AI and other advanced technologies support it.
It’s also likely that many accounting careers might be in an outsourced role. For example, many financial professionals work for outsourced cloud accounting providers instead of working for a startup in-house. They might also provide modular services to clients, or integrated services, such as combined accounting and payroll.
What is certain is that the need for accounting isn’t going anywhere, and people play a crucial role in how accounting is done. While future accounting careers might be digital and supported by different tools and technologies, at this time, it’s clear that humans are still needed.
The Future of Accounting Is Now
The future isn’t as far off as it might seem, and when it comes to accounting, it might actually already be here. We’re currently seeing a boom in automated tools, new technologies, and the digitization of many accounting functions. And one thing that’s definitely certain about the future of accounting is that outsourcing will play a significant role.
Here at hiline, we’re ready for whatever changes the future might bring, and we’ve already embraced the power of outsourced accounting. We know just how powerful it can be for startups and other new businesses and how much more cost-effective it can be (when compared to traditional business accounting options). That’s why we provide startups and other fast-growing businesses with cloud-based accounting services designed to take them to the next level.
Interested in partnering with hiline for your business accounting needs? Check out our accounting services today!
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