You may not have been thinking too much about emerging technologies in accounting you're already using. If you are relying on traditional accounting software, your firm could find itself behind the curve within the next few years.

Clients have come to expect that firms have accounting automation as a standard in their service offerings. Trends in accounting technologies are becoming more important than ever, boosting professional value.

If you’re going to be successful in accounting, you must familiarise yourself with current accounting technology and stay up to date on up-and-coming trends. 

So, what’s on the horizon in accounting technology? In our article, we will look at emerging technologies in accounting impacting the industry right now. We will also look to the future of accounting, providing insight into predicted digital disrupters set to change the way accountants will work. 

Embracing emerging technologies in accounting to your advantage

The digital workplace has been accelerating over the past few years, making emerging technologies for accountants all the more important. A report by ACCA found that, of the accountants surveyed, 89% said that digital skills were necessary for their industry. 63% indicated that they felt they had the right level of digital skills for their roles.  

There are many benefits for firms that embrace the biggest technology trends:  

• Streamlining, automating and innovating accounting practice operations. 
• They are empowering employees to connect.   
• Tools, such as accounting practice management software, are empowering everyone to collaborate.   
• They enable greater flexibility and let your staff work however they want.
• Maintaining control and ensuring sensitive personal information and accounting firm data remain secure from cybercriminals. 

Staying abreast of emerging technologies in accounting will make accountants' professional lives easier and enable them to hone their skills. Being comfortable, adaptable and future-focused regarding accountant technology trends will help many accounting firms stand out above their competition.

Learn more about the use of technology in accounting here: Embracing the digital workplace in accounting practices. 

How technology trends are changing the accounting profession

Firms are already leveraging exciting technological advances to new levels to help them automate and streamline practice operations. 

These are the accounting technology trends your firm should be keeping up with:

Accounting automation 

60% of Australian firms agree that technology that automates rote or mundane tasks is one of the best ways to engage and retain employees. Accounting automation can turn this dream into a reality for time-poor firms.  

Robotic Process Automation (RPA) automates many routine accounting tasks, such as collecting client documentation, data entry and client reminders. 

As robotic process automation becomes more embedded within accounting practice workflows, we expect to see even more automated tasks. This will free accountants to focus on higher-level jobs such as business advisory.  

Accounting automation can create untapped capacity so you can take on more work. Accounting automation can improve the quality of jobs at a reduced cost, realise time savings, greater efficiencies and increase profitability.  

Read our article on this topic for more information: what is accounting practice automation? 

Cloud-based accounting practice software 

One of the biggest breakthroughs in accounting technology has been the emergence of cloud computing. Every year, exciting accountant technology emerges to make accountants jobs easier, and existing platforms receive updates and overhauls that ensure they will continue to compete.

Cloud-based accounting practice management software offers many benefits for accounting firms, from real-time collaboration, automatic updates, and easy accessibility from anywhere with an internet connection.

Cloud accounting software enables accountants and their clients to work together more effectively. With cloud computing, data is more secure and can be accessed and analysed from anywhere, at any time. 

Engagement has become critical for accounting firms moving towards a workplace that is more friendly to flexible work arrangements. Staff can use a cloud-based accounting system to bridge the office gap. In turn, leaders are able to foster greater collaboration while deploying more flexible work practices. 

Please read our guide on moving to the cloud here: A guide to cloud accounting practice management software. 

Artificial Intelligence and machine learning in accounting firms 

Artificial Intelligence in accounting could be the technology that drives your firm into the future. AI in accounting can automate administrative tasks, analyse complex data streams, or extract value from customer information to improve your output. Any accounting firm that is not actively leveraging AI is already behind the competition.    

According to EY, three in four (72%) finance leaders around the globe believe AI in the accounting industry will positively impact data-driven insights. This has risks, especially for firms implementing AI technologies without understanding the associated challenges.  

Many software as service (SaaS) vendors are incorporating generative AI capabilities into tools designed to automate accounting functions. A KPMG survey found almost two-thirds (65%) of US CFOs believe that generative AI will have a high or extremely high impact on accounting in the next three to five years. 

These statistics come in the wake of the success of ChatGPT, the AI chatbot by Microsoft-backed OpenAI. ChatGPT took the world by storm after its public release, with a record-breaking 1 million users within one week of launching alone. The New York Times were even quick to declare it the best artificial intelligence chatbot ever released.

Other companies are quick to jump on the AI bandwagon. Microsoft announced its AI-powered Copilot, powered by ChatGPT. Accountants can use Copilot to generate their documents, emails, presentations and much more. 

ChatGPT in accounting can augment work and assist accounting practices with smaller micro-tasks as an extension of accounting practice management software. This will help accountants' efficiency and free up their time to focus on more strategic or value-adding work.  

Accounting firms with an auditing function or division may also see a more comprehensive and efficient audit process with AI in the mix. Learn more about AI in auditing in our article: How AI is transforming auditing.

Read our article for more information on artificial Intelligence in accounting: how can accountants harness artificial intelligence?  

For more information on ChatGPT in accounting, check out our article: how can ChatGPT be used by accounting firms? 

Big data in accounting firms 

With the increasing availability of big data, data analytics is becoming an essential tool for accounting professionals. For modern accounting practice, data means so much more than Excel spreadsheets and figures. It now includes unstructured data that is analysed through natural language processing. With big data, financial information is monitored using real-time analytics to provide status updates. 

The Fourth Industrial Revolution is powered by big data analytics, meaning other new technologies currently transforming accounting use data as fuel.   

Big data in accounting gains insights into financial performance, so an accountant can identify areas for improvement and make better-informed decisions. Big data can help accountants to analyse cash flows, identify trends in customer behaviour, and predict future market conditions. 

Predictive analytics in accounting firms 

Predictive analytics is a rapidly growing area in accounting businesses. Predictive analytics in accounting enables data-driven decision-making. It leverages financial data to predict what will happen next. Predictive analytics in accounting has several applications, but firms predominantly use it to build accurate forecasts and identify patterns shaping forecasts. 

A study by ACCA found that the most common use of predictive analytics in accounting is to identify potential fraud. This is followed by forecasting and predicting financial performance. The same study found that 47% of firms use predictive analytics to analyse customer behaviours and preferences. 

Flexible work arrangements 

Infrastructure changes due to remote work will undoubtedly influence how the modern workplace looks. The benefits of agile accounting could outweigh the negatives for accounting firms and their organisational structure.  

Employees say flexible work arrangements and the cost savings on working from home, commuting, and daily takeaway to tax benefits are significant upsides. Accounting firms are seeing reduced overheads like electricity and gas, less wear-and-tear on office equipment, and even exploring the benefits of chatbots. 

Please read our article on flexible working arrangements for accounting practices. 

Cybersecurity for accountants

Cybersecurity for accounting firms has become integral to implementing cloud-based accounting software. In recent years, we have seen new workplace trends like bring-your-own-device and cloud migrations. These have caused accounting practices to rethink how they can keep their confidential data secure. 

Flexible work arrangements are enabling accounting professionals to conduct more business from home. This is raising alarm bells that malicious cyberattacks and data theft could become more frequent. 

There is a whole faction of bad actors looking at the increased adoption of remote and flexible work arrangements as an opportunity for their financial gain, implementing everything from phishing scams to identity theft. A robust cybersecurity policy will be mandatory for accounting firms in future. 

For more information on this topic: read our guide on cybersecurity for accounting firms.   

Which emerging accounting technology will have the most impact on its future?

Future technology for accounting firms of the future will revolutionise the industry, improving efficiencies, and productivity, while reducing cost.

Blockchain accounting 

Blockchain is a distributed ledger technology, known for its connection to Bitcoin and other cryptocurrencies. Blockchain technology is transforming auditing, record keeping, liability, and accountability with its ability to maintain a reliable record of secured transactions.

Blockchain and accounting work together by producing an open record of everything auditors and their clients have done in a permanent, auditable way.  

With this record of transactions, blockchain accounting can increase transparency for potential suppliers, creditors and clients and reduce the risk of errors or fraud. Blockchain technology can also streamline accounting processes, eliminate the need for third-party intermediaries, and reduce transaction costs. 

The Internet of Things in accounting 

The Internet of Things (IoT) is defined as a system of interconnected devices and machines. They communicate with one another without human intervention to exchange data online.  

The buzz around this technology has led many industry leaders to ask, "How will the Internet of Things affect accounting?" According to the AICPA, "IoT can revolutionise how businesses gather data – and in the process, transform many aspects of accounting and auditing." 

The Internet of Things in accounting helps track ledgers, transactions, and other records in real time. With Artificial Intelligence's support, patterns can be identified, or issues can be resolved quickly. This emerging technology in accounting makes accounting activities, such as auditing, much more streamlined and stress-free.  

The Internet of Things offers many advantages for accounting firms. This emerging technology in accounting can manage increased amounts of finance data that flows into various accounting systems. Accounting professionals looking to conduct business advisory services will be in a stronger position to provide better advice, due to more visibility over client financials and financial activity.

Embedded analytics in accounting 

Embedded analytics in accounting will be a future disrupter, solving problems and innovating actionable insights for accounting firms. It will encompass how they capture, store, curate, visualise and share data. 

There is the potential for embedded analytics to showcase the potential of data science in accounting. Modern embedded dashboards will help firms to become more knowledge-based. This will bring a new level of data science in a simple and user-friendly way to non-technical environments. 

The Metaverse and accounting firms 

The Metaverse will provide new ways of engaging accounting firms looking to serve and interact with their clients. The Metaverse combines augmented reality (AR), or virtual reality (VR), enabling users to interact with businesses, such as accounting firms, within a virtual world. Even though it is still in its infancy, the Metaverse could be compared to a 3D version of the internet, accessible to anyone with a computer or smartphone. 

The Metaverse in accounting is largely conceptual at this stage, but this hasn't stopped accounting firms in the US from experimenting with business models within the Metaverse. PwC's Hong Kong office purchased a virtual plot of land in December 2021. A month later, Prager Metis became the first public accounting firm in the world to open a virtual headquarters in the Metaverse. They are using it for rooftop events, meetings and as a gallery space for NFTs. 

Global banker Citigroup predicts that by 2030, the market value of the metaverse could be as much as $13 trillion. Goldman Sachs predicts that 33 per cent of global spending on digital transactions could become tied to the Metaverse. 

Build a practice with emerging technology in accounting

As CPA Australia puts it: practitioners in the accounting profession need to rethink its future and take active steps towards embracing digital transformation.   

Emerging technologies in accounting are becoming commonplace. Accounting automation, artificial Intelligence in accounting, big data, predictive analytics and cloud-based accounting practice management software help digital accountants drive better results for their practice and clients. 

The future of technology in accounting looks similarly bright. Game-changing accounting trends will shake things up, such as the Internet of Things (IoT), blockchain accounting, the Metaverse and embedded analytics.

Our best advice is to get ahead of emerging technology in accounting and stay ahead. You can start by equipping your accounting firm with cutting-edge accounting software solutions today, to avoid being left behind. 

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