The future of accounting: trends to watch out for in 2023 and beyond
In this guide, we take a look at five topics that are key to the future of accounting and bookkeeping in 2023 and beyond.
Digitalisation and Making Tax Digital
Digitalisation has transformed the accounting industry in recent years, and this trend is set to continue. The move towards digitalisation - often using cloud accounting software - is intended to make practice processes more efficient, reduce errors and increase transparency. It also encourages clients to adopt digital tools, embrace automation and collaborate more closely with their accountants.
Despite the UK government delaying the introduction of Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) until 2026, digitalisation remains a priority for many accounting and bookkeeping practices. In a poll we ran during a February 2023 webinar, nearly two thirds of respondents (62%) said that the delay hadn’t affected their plans to prepare for MTD.
With practices ploughing ahead with digitalisation in 2023 and beyond, we expect this to be a hot topic in the accounting world for the foreseeable future.
The recruitment gap
Finding and keeping practice staff is a long-term challenge that looks set to continue in the coming years.
As younger accountants and bookkeepers increasingly value flexibility and work-life balance, many of them are choosing to set out on their own. This means that many practices are struggling to find and retain talent.
Speaking at our ‘Future of accountancy’ webinar in December 2022, Jo Wood (director at The 6 Figure Bookkeeper) said: “People want more flexibility with their lives, and they feel that it’s an easy solution to go and set up on their own. I think we’ve lost a lot of talent to people going and doing it for themselves: working from home around their families and finding that greater flexibility and freedom.”
To combat this, practices are increasingly experimenting with new initiatives and ways of working. This includes four-day weeks, remote-working arrangements and increased staff benefits.
Recruitment isn’t just an issue for smaller firms, and larger firms have reported adopting a ‘promote-from-within’ mentality to fill vacancies. Speaking at our ‘Future of accountancy’ webinar, John Toon (senior manager at Beever and Struthers) said: “From a big firm point of view, we’re a training organisation, so one of the ways we address recruitment is really just to fill in at the bottom and bring these people through […] That was something that as a firm we made a conscious decision about.”
The recruitment gap is not a problem that’s likely to go away overnight, and how firms react to it will impact the future of the accounting industry.
Artificial intelligence and machine learning
Artificial intelligence (AI) is a hot topic in numerous industries, and accounting and bookkeeping is no exception. As a result of various technologies that fall under the umbrella of AI, the accounting industry is experiencing a shift from manual and repetitive tasks towards more strategic and value-adding activities. Here are just a few ways that AI is impacting accounting and bookkeeping:
- Automation: AI is allowing practices to automate many accounting tasks that were once manual and time consuming. For example, accounting software can now use machine learning to perform tasks like bank reconciliation and transaction categorisation at speed and with a high degree of accuracy.
- Fraud detection: AI technologies can help detect potential fraud by analysing large volumes of data and identifying patterns and anomalies.
- Financial analysis: Algorithms can analyse financial data and provide insights into business performance. Accountants can use these insights to help them make more informed decisions and provide better strategic advice to clients.
- Customer experience: AI-powered chatbots can provide 24/7 customer service and answer frequently asked questions. For practices, this can enhance customer experience and free up accountants' time to focus on other tasks.
With AI's continued development and implementation, we can expect even more significant impacts, so this is a topic that’s likely to be discussed even more in the future.
Blockchain is another technology that has the potential to change accounting and bookkeeping over the next few years. It allows for secure and transparent record-keeping, reducing the risk of fraud and errors.
Blockchain is already being used in some areas, such as supply chain management, and may become more widespread in the accounting industry in the near future.
Sustainability is an increasingly important issue in many industries, including accounting and bookkeeping. While some of the current conversation focuses on how practices can become more sustainable themselves, practices offering sustainability guidance as a service to clients is something we’re likely to see more of in the future.
Speaking at our ‘Future of accountancy’ webinar, Dr Peter Ellington (CEO at Triple Bottom Line Accounting) said: “We’re starting to actually see [clients] saying, ‘I want a net-zero plan because I think it’s going to be decisive in how I get business in the future’. And that’s where we [practices] need to be.”
Accountants and bookkeepers are uniquely placed to offer a service that can include tracking and reporting on key sustainability metrics such as carbon emissions, energy usage and waste, as well as analysing the financial costs and benefits of different sustainability initiatives.
By promoting sustainability, accounting and bookkeeping professionals can also help businesses to build a positive reputation and enhance their brand value. Consumers are increasingly interested in supporting businesses that prioritise sustainability, and companies that can demonstrate their commitment to sustainability through their financial reporting are likely to be more attractive to customers and investors alike.