Top 7 accounting trends in 2024: get ready for the future!

It’s fair to say that we live in unprecedented times. Driven by technological advancement, the way we live, work, and interact is changing at a rate never seen before. As a result, the accounting industry is being transformed before our eyes.

To remain competitive in a rapidly evolving world, accountants must stay one step ahead of the curve. The most successful accounting practices will be those that are willing to adapt and embrace new technologies and processes.

In this article, we’ll explore how the following accounting trends can benefit your practice — and how to maximize the opportunities they present.

• Artificial intelligence (AI)
• Automation
• Data analytics
• Cloud-based software
• Blockchain technology
• Cybersecurity
• Green accounting

1. Artificial intelligence (AI)

Let’s kick things off with perhaps the biggest technology trend of all time. AI isn’t just any old innovation — it has the potential to reshape virtually all aspects of our lives. 

While the potential of AI has been discussed for decades, we’re now beginning to see real-world tools and applications hit the mainstream. Just last year, ChatGPT became the fastest-growing app of all time, reaching the 100-million-user milestone just two months after its launch. And that’s not all:

• 77% of devices now have some form of AI
• 9 out of 10 organizations believe AI gives them a competitive advantage
• The global AI market is expected to reach over $1.8 trillion by 2030

The crazy thing is, this is still very much the beginning — AI is still in its infancy. While the true long-term impact of this trend is anyone’s guess, it’s already having a tangible impact on the accounting industry.

How is it used?

AI’s ability to analyze data, interpret human language, solve problems, and generate logical and useful outputs means that the scope of its utilization is almost limitless. At the moment, most of its applications are in the automation of time-consuming manual tasks, and most accounting software already incorporates AI in some capacity. Here are just some of the things AI can do:

• Automatically scan and categorize transactions
• Extract data from invoices and match it to corresponding purchase orders and receipts
• Monitor financial transactions in real time, spotting unusual patterns that may indicate fraudulent behavior
• Scan financial data, interpret results, and create accurate financial reports
• Draft client emails, summarize responses, and chat with clients in real time
• Analyze large amounts of data and identify potential risks for audit purposes

This is just a fraction of what AI can do. Tools like ChatGPT alone provide an incredible number of use cases for accountants, acting as a sort of smart assistant that can generate business and marketing strategies, reformat data, create content, and much more.

TaxDome has incorporated AI into its analytics and reporting tool. If you know the data you want to find, you can simply type a query into the search box, and the AI will find relevant insights for you instantly. See below:

What are the benefits?

AI brings huge benefits to accounting practices, enabling them to:

• Streamline, automate, and enhance all sorts of accounting processes
• Scale processes infinitely
• Save time, money, and hassle
• Increase accuracy and minimize human error
• Gain real-time insights

How can I implement it?

There are all sorts of ways you can implement AI in your accounting practice. Perhaps the quickest and easiest is to start using accounting and practice management software that offers AI-powered features. You can also explore how tools like ChatGPT can help streamline your accounting practice.

Because the capabilities of AI are changing rapidly, it’s important to keep up with the latest advancements. You can do this by listening to AI podcasts or following AI influencers. You may also want to invest in AI training to ensure your team understands how to use it in your practice.

2. Automation

Automation is proving a game-changer for accounting firms, allowing them to do more with less by handing over all those time-consuming, repetitive tasks to their software. 

There’s a bit of overlap between automation and AI in that respect. The difference is that automation executes tasks based on somewhat rigid rules, whereas AI goes a step further by mirroring human cognition to solve problems, adapt, and improve over time.

Like AI, automation is having a tangible impact on the way firms operate. For example, firms that use TaxDome’s workflow automation can save up to 40 hours per employee per month! 

How is it used?

Automation has many applications. If you can think of a repetitive manual accounting task, chances are it can be automated entirely. For simplicity’s sake, we can divide a software’s automation capabilities into two categories: task automation and workflow automation.

Task automation involves automating individual tasks, such as sending automatic reminders to clients, scheduling alerts, or generating invoices. Workflow automation is much more powerful and involves the automation of entire accounting processes from start to finish. 

If we use the example of client onboarding, TaxDome enables you to automate every step of the workflow, from sending out engagement letters to gathering client information, collecting payment, and assigning accountants to work on the client’s account. Once a certain action is triggered — e.g. signing an engagement letter — the job automatically moves to the next stage of the workflow. Here’s what it looks like:

What are the benefits?

Automation enables accounting firms to:

• Free up staff to focus on higher-value work
• Take on more clients without having to hire more staff
• Deliver a superior client experience through timely communication
• Ensure consistency and quality across accounting processes

How can I implement it?

Like AI, the best way to implement automation in your firm is to choose the right software. The best accounting and practice management platforms offer workflow automation, and they should also provide the training you need to maximize the value of this powerful technology.

With TaxDome, you can create custom automated workflows to suit your specific needs. So once you understand how they work, you can make a list of all the processes you’d like to automate. Chances are there will already be a template you can use in TaxDome to get started quickly! 

3. Data analytics

Data analytics involves gathering large amounts of data from different sources, analyzing them to spot patterns, trends, and anomalies, and then presenting the findings via graphic visualizations. 

This can be of immense value to accounting firms, enabling them to unearth insights that can drive improvements across virtually all areas of business. For example, data-driven companies are 19 times more likely to be profitable than those that fail to harness the power of data. No wonder 90% of companies prioritized data analytics last year!

How is it used?

Accounting firms use data analytics to gain insights that can inform smarter decision-making. Analytics can be used to reveal trends in financial data, enabling accountants to better forecast future market trends, revenue, cash flow, and so on. 

Analytics can also be used internally to understand how effective a firm’s operations are. For example, TaxDome’s reporting feature enables users to understand performance on an individual or team basis, identify the most lucrative clients, pinpoint which services bring in the most revenue, and much more. To see TaxDome’s reporting and analytics tool in action, check out this explainer video:

Then there’s predictive analytics, which enables accountants to glimpse into the future. By analyzing historical data and identifying patterns, analytics tools can predict future trends before they happen.

What are the benefits?

Analytics provides the insights that accountants need to make smarter decisions, leading to: 

• More efficient processes
• More efficient allocation of resources
• Smarter, more informed strategies 
• More personalized services and happier clients

How can I implement it?

There are plenty of dedicated analytics platforms out there, such as Microsoft Power BI, Tableau, and Looker Studio. Alternatively, you can find more industry-specific tools in accounting software, such as QuickBooks Online or Xero, and practice management platforms, such as TaxDome. 

To maximize the impact of these tools, it’s a good idea to look into analytics courses, which will provide you with the basics you need to interpret insights and present them effectively. 

4. Cloud-based software

Cloud-based software has been the default option for forward-thinking firms for years now. Unlike traditional software, cloud solutions can be accessed from any device, anywhere — all you need is an internet connection. This has changed the way accounting firms operate, freeing them up from conventional restrictions around where and when work takes place.

What’s more, cloud software means that firms don’t have to worry about manual updates, maintenance, or even data housing. All of those things are outsourced to the software provider. The result is a seamless user experience. Today, 96% of companies use software hosted on public clouds, such as Amazon Web Services or Microsoft Azure.

How is it used?

Accounting firms use cloud-based software to manage virtually all of their processes, from accounting and tax preparation to client communication, invoicing, project management, and analytics. Most of these solutions are so-called software-as-a-solution (SaaS) products, where firms pay a monthly or yearly subscription, rather than a one-off fee to own the software outright. 

What are the benefits?

Cloud-based software brings huge benefits to accounting firms, enabling them to:

• Adopt a remote or hybrid approach to work
• Operate as a fully virtual firm 
• Improve access to information for team members
• Improve internal communication and collaboration
• Enhance performance and security
• Avoid costly maintenance fees and manual updates

How can I implement it?

If you aren’t already, the answer is simple — choose cloud-based software. To pick the right solution, you’ll need to evaluate your needs, research software providers (including online user reviews!), make a plan to transition from your legacy systems, and train your team on the new software. 

The best software providers will walk you through the implementation process, including data migration, setup, and basic training. 

5. Blockchain technology

Of all the accounting trends on this list, blockchain technology is perhaps the most unknown and least adopted — for now. 

A blockchain is a decentralized digital ledger where transactions are securely recorded in blocks, which are linked together using cryptography. This means that once a block is committed to the blockchain, the transactions within it cannot be altered or removed. The result is an immutable record of transactions. 

Chances are you’ve heard of Bitcoin, which was the first application of blockchain tech. Since Bitcoin was launched back in 2009, an ever-increasing number of blockchains have followed, and an ever-increasing list of use cases is being explored. 

How is it used?

Blockchains can be used as an alternative to traditional ledgers for any use case that involves transferring value. So while the first (and most obvious) use case is digital money, blockchain tech can also be used to transfer and record ownership of any asset or documentation, from government IDs to stocks, houses, cars, artwork, certificates, and more. 

Transactions can even be pre-programmed using so-called smart contracts — digital agreements written in code, where transactions execute automatically when certain conditions are met, such as a document being e-signed. 

Because blockchains are decentralized, immutable, and trustless (i.e. you don’t need to place your trust in a third party to facilitate the transaction), they have the potential to simplify legal and accounting processes, including audit, asset ownership, and compliance. And while real-world applications are still being developed, the Big Four accounting firms are already exploring the potential of blockchain.

What are the benefits?

Once fully implemented and adopted, blockchain tech has the potential to:

• Simplify accounting processes and access to information
• Remove the need for trusted third parties in complex transactions
• Enhance transparency, security, and efficiency
• Improve compliance, especially with know-your-customer (KYC) and anti-money-laundering (AML) requirements

How can I implement it?

At this stage, the best approach is to get learning — and there’s a lot to learn! Educate yourself on how blockchain works, its potential use cases, and the benefits it could bring to your firm and clients. We recommend checking out blockchain blogs, videos, and podcasts. When the time comes to adopt blockchain solutions, you’ll have a head start over the competition. 

6. Cybersecurity

Cybersecurity should be a major priority for any business, but it’s particularly important for accounting firms, which handle highly sensitive financial and personal information. 

As an increasing number of accounting processes take place online, the risk of cyber threats is constantly increasing. The repercussions can be huge, not only from a financial perspective but also a reputational one. Thankfully, cybersecurity tools are constantly evolving to meet the challenge. 

How is it used?

Cybersecurity in accounting involves a combination of tools and processes to keep firm and client information safe. These can include:

• Data encryption 
• Multi-factor authentication
• Password management tools
• Cyber security and anti-malware software
• Virtual private networks (VPNs)

What are the benefits?

Implementing a robust cybersecurity strategy yields many benefits, including:

• Peace of mind
• Maintaining client trust 
• Avoiding financial and reputational damage

How can I implement it?

In most cases, the software accounting firms use have robust security features built-in. TaxDome, for example, comes with end-to-end encryption, multi-factor authentication and biometrics, and secure document management and messaging. But you’ll also need to ensure that the devices your staff use have cybersecurity software installed.

While cybersecurity tools protect you from many of the threats you’ll face online, they can only take you so far. An incredible 95% of cyber breaches are caused by human error, such as weak passwords, unauthorized access, and phishing attacks, where employees are tricked into clicking on malicious links. So in addition to the right software, effective cybersecurity training is essential to minimize the risk of threats.

Lastly, it’s a good idea to perform regular security checks and audits to identify any vulnerabilities or weak spots in your cybersecurity strategy. If you don’t have the expertise in-house, you can outsource this process to an expert.

7. Green accounting

Also known as environmental accounting, green accounting takes into consideration the environmental cost of business operations when looking at a business’s financial results. It helps businesses understand the impact they have on the environment, enabling them to seek out greener processes without negatively impacting their bottom line.

How is it used?

Accounting firms can use green accounting to track, measure, and report on environmental costs, such as waste management and energy consumption. This helps businesses to be more transparent about their processes — and seek out opportunities for introducing greener, more sustainable practices.

What are the benefits?

Adopting green accounting practices can:

• Enhance your reputation as a contentious business
• Help identify processes that are greener and more sustainable
• Attract ESG (environmental, social, and governance) investment

For forward-thinking accounting firms, specializing in green accounting services offers the opportunity to corner the market in a trend that will only continue to grow in the coming years.

How can I implement it?

You can use specialized software to track and report environmental costs, carbon emissions, and more. To implement this successfully, you’ll need to train your employees on the core principles and practices associated with green accounting. You’ll also need to stay up to date on the latest regulations and standards.

If you want to specialize in green accounting services, you can start advising your clients on incorporating sustainability into their policies and the benefits this can bring to their business. 

To sum up

While the future of accounting is hard to predict, it’s clear that it will be shaped by technology-driven trends. The seven trends we’ve highlighted in this article are poised to have a huge impact on the way accountants operate. 

By understanding these trends, how they can be implemented, and the benefits they can bring, accountants can stay one step ahead of the pack. After all, these trends not only bring change but also opportunity. The most successful accounting firms of the future will be the ones most willing to adapt to and embrace change. 

To see how TaxDome could help you build a highly efficient and forward-thinking accounting practice, request a demo today!