Accounting Industry Trends To Look Out For in 2022

The accounting industry has seen a massive shift in the working environment, skills, processes, etc. Traditional business models are no longer applicable due to disruption. The transformation has changed the shape of the accounting industry and businesses depending on this function. However, there is nothing to fear as the accounting professionals’ work has become more accessible and straightforward than ever before. They can focus well on providing strategic accounting, advisory, and financial management services. These developments have led accounting services providers to perform their core operations rather than other distracting and time-consuming activities.

The accounting industry trends that have gained considerable attention and are now looking to be transformed are as follows:

Rising digitization and adopting technology:

The accounting and bookkeeping industry does not seem like a technology-friendly sector. However, it does not mean that digitization has no role. The current accounting transformation has been possible due to the rising technological trends and resources. These advancements automate monotonous activities, lending the human resources free for strategic operations.

Moreover, earlier businesses were reluctant to adopt the technology due to cost and resource restraints. However, it has become so affordable that now every company can introduce it (partially, if not entirely). They can enjoy highly efficient, expedited, and cost-friendly services. Thus, this has caused a rising trend to continue shifting the accounting services scenario.

Technology and digitization have penetrated relations with customers, vendors, lenders, debtors, and other parties. Moreover, tax legislations prefer companies to fill out their forms and submit returns online instead of on paper. Thus, accounting professionals have become critical to learning and adapting digitization to continue servicing clients.

Currently, cloud-based accounting and bookkeeping software are in high trend. Due to its ability to facilitate remote-working even with a mobile phone, many businesses and accounting professionals have found the long-lost flexibility of doing things. Moreover, it is effortless to set up and doesn’t cost a fortune.

Environment, Social, and Governance issues (ESG):

It has become clear that businesses cannot strive without addressing environmental and sustainability issues in the current circumstances. The firms’ operations need to protect and be held accountable for contributing to such problems. Businesses need to understand and minimize these issues for their short and long-term prospects. Adoption of sustainable practices drives customer demand more than government-mandated actions.

The ESG issues impact the accounting industry by allowing it to measure these risks and how well a company minimizes them. Although there are no global standards to implement ESG, it can be an excellent initiative for accounting firms to voluntarily engage in activities to help reduce ESG issues. It is a perfect opportunity for auditors to expand their roles and conduct risk assessments and performance measurement results.

Cryptocurrency accounting and blockchain technology:

Blockchain technology grows by leaps and bounds, driving efficiencies and streamlining digital asset tracking. It creates a unique identifier for a transaction that runs through its entire course. It is traceable for a lifetime and increases accountability. On the other hand, theft, fraud, and other ownership issues decline significantly. Cryptocurrencies are increasingly becoming traders’ favorite security. While currently, they are valuable in remittances, purchasing illicit goods, and transferring money abroad, mainstream adoption is looming. It is a significant market that will grow into a booming area for accountants to seize. Because it is in its infancy stage, accounting services providers must jump on the bandwagon. Adding it to the current skill set is crucial to tap the untapped potential.

Apart from backing cryptocurrencies, blockchain technology also safeguards financial transactions. It provides a decentralized computing system that validates and secures transactions in a digital ledger. The transparent transactions through blockchain, which cannot get faked, enable financial statement preparation and storage. It also makes auditing more accessible.

Data analytics and accounting advisory:

The current times prompt businesses to maximize insights into the financial realm and understand every aspect deeply. Data analytics is critical in helping companies identify areas for process improvements and support operational changes. It helps them uncover the untapped potential opportunities to generate more revenue and other growth-related nuances from financial statement analysis. The role of accounting services gets transformed from accounts preparation to being the advisory. Firms look up to their accountants to receive their expertise in financial planning, strategizing, forecasting, and enhancing efficiency.

Instead of ensuring compliance and reporting financial statements, the accounting services are now necessary to explore finances, reduce costs, enhance profitability, and improve customer service. It has enhanced the need for accounting advisory and consultancy services among businesses. Data analytics technology studies the vast database and provides results for analysis quickly. It saves time and money. Accountants can use data analytics to predict future financials, implement detailed pricing, and generate better forecasts.

Upskilling and reskilling:

Accounting services providers require training and updating their skills to match the accounting industry trends. Without learning a new skill in the evolving accounting process, they are nearly useless for financial management seekers. For instance, Artificial Intelligence is critical in transforming the financial sector. It facilitates real-time reporting and auditing. AI enables businesses to meet the changing consumer needs and regulations while saving time and resources. It also helps detect fraud early. Blockchain technology is another example of securing digital transactions and protecting data. Accountants need to understand these technologies and learn how to incorporate them into their functioning for efficient and profitable services to businesses.

Thus, the current technological advancements and their ongoing evolving process require accounting services to upskill and reskill. The accounting qualifying process requires instilling technology in education to help better grasp working opportunities. Continuous training helps already working professionals to be more productive and efficient.

Conclusion:

Like every other industry, the accounting industry also sees ongoing trends that change with time. However, adapting to these at the right time is critical to ensure smooth functioning and staying operational. Thus, businesses and accounting industry professionals must note current and future potential trends and incorporate the most profitable trends in their services.