Accounting firms, in the US, are navigating through a series of challenges and trends in 2024, propelled by economic conditions, technological advancements, and changing market demands. For over half a decade, the world has witnessed enormous changes and the accounting field is no exception. The technology that is in use today or expected to be at our disposal soon, has helped emerge a futuristic world.
Accounting has always been known as a branch that deals with traditional methodology. Thanks to the innovation, that has changed too. With a workforce and their brand-new mindset, the technology is all set to help achieve great things.
Interestingly, the trends that the experts expect to rule in 2024 are not limited to technology alone. With employees that want more balance in terms of working location, and the model that employers provide, change is the only constant. In this article, Finsmart Accounting – globally trusted for outsourced bookkeeping services – will share the list of the top 8 trends in the accounting industry. Let’s start!
What’s trending in the accounting industry?
1. 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐔𝐧𝐜𝐞𝐫𝐭𝐚𝐢𝐧𝐭𝐢𝐞𝐬: Whether a recession will strike in 2024 has sparked a major debate among the economists. While the Federal Reserve Bank of New York gives a 56% probability of the US slipping into recession by September 2024 (according to a recent report), optimists are focusing on the US economy’s growth of 4.9% in the third quarter of 2023. This growth, along with the assertions by economists at the US bank and UCLA paints positivity and chances of avoiding a recession altogether.
However, concerns about inflation, rising interest rates, and a potential recession continue to pose a threat to accounting firms’ focus on liquidity, cost containment, and improving cash flow. The emphasis is on enhancing the efficiency of accounts receivable and payable processes to ensure steady cash flow.
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2. 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐚𝐧𝐝 𝐒𝐭𝐚𝐧𝐝𝐚𝐫𝐝 𝐂𝐡𝐚𝐧𝐠𝐞𝐬: Financial reporting for regulatory changes and new accounting standards, especially in light of recent global events, remains a significant challenge. This includes compliance with reporting requirements from COVID-19-related government stimulus programs and adapting to new standards in GAAP and IFRS.
Under President Joe Biden’s term, the US has been witnessing significant changes, such as executive orders to enforce customer protection. There is also pressure on the financial sector to balance compliance demands and profit goals. These changes are considered “imminent” as there is a need to address issues of tax avoidance, money laundering, and financial fraud.
3. 𝐓𝐚𝐥𝐞𝐧𝐭 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭: With boomer accountants moving out of the workforce and the millennials and Gen-Z considering accounting as “not cool”, there is a notable shortage of accountants in the industry, particularly CPAs. And hiring and rehiring don’t seem to suffice the need. The lingering problem is that while employers want their workforce to work in the traditional mode, the employees seem to want things that are different, more convenient, and flexible.
Retention strategies should focus on addressing low morale and burnout, emphasizing the importance of continuous education and training, and making accounting a more flexible field overall. Social media and other online platforms have proven to be a powerful tool for engaging with potential candidates. Platforms like LinkedIn, Twitter, and Glassdoor are platforms that showcase an employer’s values and how they treat their employees and that is exactly what the new-age employees are looking for. The interview experience also plays an important role for employees to decide whether they want to be a part of such an organization. It has become essential for firms to be more inclusive, flexible, and aware of the needs of their employees. Indeed, a welcome accounting industry trend of the ongoing decade!
Recommended reading: Learn everything about auditing in accounting.
4. 𝐓𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐢𝐜𝐚𝐥 𝐈𝐧𝐭𝐞𝐠𝐫𝐚𝐭𝐢𝐨𝐧: The adoption of cloud technologies, data analytics, and automation is an immediate need. Cloud-based systems offer security, flexibility, and disaster recovery advantages, while data analytics and automation tools are transforming traditional accounting tasks, enabling firms to focus on high-value strategic advice and reducing manual, repetitive tasks.
Besides cloud-based accounting, modern firms have adopted Artificial Intelligence and Machine Learning. The use of modern accounting software aims to make performing accounting tasks much easier. The global market size for artificial intelligence in accounting is expected to reach 53, 893 million dollars by 2030, says a report. The rise of technological advancements and adoptions has already begun and in 2024, we can expect these technologies to become more sophisticated, affordable, and widely used.
5. 𝐂𝐲𝐛𝐞𝐫𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐲 𝐓𝐡𝐫𝐞𝐚𝐭𝐬: As technology becomes more integrated into accounting practices, cybersecurity threats are becoming more sophisticated. Small and medium-sized firms are particularly targeted due to the valuable financial information they handle.
The cybersecurity policies of a firm must outline the roles and responsibilities of your employees. This is also indicative of the security standards and procedures that they need to follow and the consequences of non-compliance. These policies should be effectively communicated to every member of the organization. Firms must strengthen their cybersecurity measures and educate their staff on recognizing and mitigating risks. With remote work being on the rise, it is important to provide them with regular training and awareness programs on the best cybersecurity practices. Some of the common ways to combat this include multi-factor authentication using a code or fingerprint, putting up a firewall, encrypting the data, being critical of what you receive in emails, constantly backing up information, and monitoring for intrusion. An ace accounting industry trend of 2024 if you ask us!
6. 𝐀𝐝𝐚𝐩𝐭𝐢𝐧𝐠 𝐟𝐥𝐞𝐱𝐢𝐛𝐥𝐞 𝐰𝐨𝐫𝐤𝐢𝐧𝐠 𝐦𝐨𝐝𝐞𝐥𝐬: The shift towards remote and hybrid work models is becoming permanent for many accounting firms. This transition requires a robust tech stack to support efficient operation and collaboration, both internally and with clients. Firms that had already adopted remote work practices fared better during recent global disruptions.
One of the major reasons for high attrition rates across accounting firms is unrealistic expectations and employees ending up being overworked. When accommodating remote work, make sure to lay out clear expectations – the hours you expect them to work, the deadlines, the quality, etc. For remote employees, it is also necessary to provide the necessary hardware, software, internet access, and training to perform the tasks efficiently. Cloud-based practice management software, such as Advisory Way helps manage workflows, documents, and clients. Video conferencing tools like Skype and Zoom should be allowed for meetings and training. Office chat software like Teams and Slack allow effective communication and collaboration.
7. 𝐄𝐒𝐆 𝐢𝐧 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐢𝐧𝐠: There’s a growing expectation from businesses, including accounting firms, to play a role in combating climate change. Environmental, social, and governance (ESG) accounting has become a popular trend. This includes offering advisory services on carbon neutrality and environmental auditing, which integrates environmental costs with financial costs to find sustainable solutions.
Although there are no ESG reporting requirements in the US yet, this is expected to change. ESG matters will indirectly affect an organization’s financial statement. For example, the knowledge of environmental contamination caused by a business will cause grave reputational damage making the sales go down.
Recommended reading: Cash flow management reporting tips and ideas for CPAs
8. 𝐒𝐩𝐞𝐜𝐢𝐚𝐥𝐢𝐳𝐚𝐭𝐢𝐨𝐧: Niche specialization is increasingly important for serving specific client needs effectively. Specializing in industries like healthcare, real estate, or construction allows accounting firms to tailor their services to the unique challenges and opportunities of those sectors, commanding higher fees and reducing client churn. This accounting trend is shaping the industry at an all new level!
Accounting Industry Trends of 2024
Accounting firms are facing technological as well as cultural shifts. If your accounting firm is struggling with growth and scalability, it might be time to dig deeper. While you do not need to jump onto and adopt every trend in 2024, it is wise to keep an eye on what is happening and which trend will help you achieve the success you desire. The world of accounting and finance is changing and you need to evolve with it.
The times are uncertain and proactive financial measures that benefit the workforce and the organization’s success are a must. Recession or not, understanding what your business needs and fortifying your financial foundation is a key step. By implementing these strategies and staying aware, accounting firm owners can navigate through the complex economic landscape and emerge stronger.
To get additional help for your firm, you might want to consider outsourcing your accounting services. Write to us at connect@finsmartaccounting.com to learn all about outsourcing.
Also, don’t forget to check out:
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Director Growth Strategy & Alliance
Maanoj Shah is a finance and outsourcing expert with strong Business Strategy and Scaling-up experience. Over the last 20 years, he has incubated multiple businesses and helped build global enterprises in verticals as diversified as hospitality, technology, and healthcare.
