As we settle into the final quarter of 2024, we have seen how the financial world is experiencing shifts, compelling businesses and professionals to adapt to change—to a significant extent. Reflecting on the diverse economic paths of the past, it’s crucial to decipher the guiding principles that lead us to a bright future.
Some businesses reached notable revenue peaks during this time, while others faced challenges like downturns, layoffs, and closures. Looking ahead to the fiscal year, let’s explore the current state of the global accounting industry. Join us in the trend analysis in accounting that will shape the financial industry in 2024 and further as we unravel the industry’s current pulse.
Business Wire’s report suggests that a 6% compounded annual growth rate is expected to propel the international accounting services sector to a $735.94 billion market value by 2025. Additionally, Allied Market Research forecasts a rise in the global accounting software market, reaching $70.2 billion by 2030, with a notable CAGR of 19.6% between 2021 and 2030. Understanding and evolving your business plans and operations in tandem with these trends that are shaping the financial landscape is pivotal to empowering businesses and professionals and enabling them to thrive in the journey.
1. AI in Finance and Accounting
Reports suggest that AI in the Accounting market is expected to reach USD 1.56 billion in 2024, and 6.62 bn. in 2029. The infusion of AI into accounting processes marks a journey from traditional number-crunching to a future in which machines and humans harmonise. This is a big leap to future-proofing operations.
The essence of AI in Finance and Accounting revolution lies in its potential to redefine the roles of accountants and bookkeepers. Rather than rendering these professionals obsolete, AI empowers them to elevate strategic significance to unprecedented levels. The technology symbiotic partnership between human expertise and machine intelligence reshapes accounting for the better. As witnessed in the trend analysis in accounting, AI is expected to redefine the future of accounting, improving operational efficiency and overall decision-making.
2. Automation in Financial Reporting and Tax Compliance
You may be surprised to learn that advanced accounting software powered with AI and machine learning are now capable of automating up to 75% of accounting tasks, such as reconciliation, financial reporting and tax compliance. Artificial intelligence and machine learning technologies drive this transformative shift, particularly in financial reporting, reconciliation, and data entry.
Looking at 2024 and beyond, a broader adoption of technology at more affordable prices is anticipated. This forecast underscores the pivotal role of automation in shaping the future of accounting, ensuring unparalleled efficiency, cost reduction, and strategic resilience in the dynamic finance and accounting industry.
3. Prime Focus on Cybersecurity and Data Privacy
According to a survey shared by Pitchbook, the data protection and encryption market size is projected to grow from USD $14.9 in 2023 to USD $24.9 in 2026. Database monitoring and loss prevention from USD $1.8 to USD $2.7, 2023 to 2026 respectively. Further, the data privacy and compliance market size was marked at USD $2.7 in 2023, which shall reach USD $3.8 in 2026.
Another report shares that the data security market estimates a growth in CAGR of 19.1%, reaching $29.6 bn in 2026. This shifts responsibility on software companies and platforms, giving prime importance to measures taken to maintain cybersecurity and data privacy.
Undoubtedly, there is an extreme focus of companies across the geographical boundaries on cybersecurity and data privacy. Features like RBAC (Role Based Access Control) that enable firms to manage limited access to important data and financials and cloud-based deployment facilitate data access, sharing and transfers, file management, and sharing through implementing multiple advanced encryption layers.
4. Blockchain Technology in Accounting
Blockchain transforms accounting, lowering reconciliation costs, simplifying ledger maintenance, and enhancing focus on strategic decisions. It ensures accuracy in bookkeeping, maintains a comprehensive asset history, and streamlines
processes like audit trails, payments, and automated invoicing. Beyond efficiency, Blockchain eliminates reliance on third-party intermediaries, saving time and funds for accounting firms.
Some noteworthy benefits include a collaborative ledger for your team to work on without storing data in individual databases, task automation and greater control over operations that were previously done manually, seamless operations and productivity even when a few systems are down, increased transparency, data security and scalability.
5. Cloud-based Accounting Systems
Image Source: MarketsAndMarkets Report 2023
Enter the era of Cloud Computing dominance!
The global market is set to skyrocket from USD 626.4 billion in 2023 to a staggering USD 1266.4 billion by 2028, boasting a robust CAGR of 15.1%. Fueled by the forces of 5G, edge computing, Big Data, Machine Learning, and the omnipresent Artificial Intelligence (AI), this transformation is unstoppable.
For accounting, cloud-based systems have many benefits—bringing not just efficiency but a flexible revolution. Real-time collaboration, unrestricted by geographical boundaries, empowers teams. Access to financial data at your fingertips enhances decision-making agility. Security, integrity, and scalability are the pillars of cloud-based accounting, accommodating growing data volumes and operational needs.
A report published by Accounting Today suggested that over 57% of organisations recognised and acknowledged the advantages of moving to the cloud and using cloud-based accounting software in their business.
Image Source: Accounting Today
In conclusion, the decision to embrace cloud-based accounting is not as a choice but a strategic mandate for businesses craving agility, innovation, and a path to sustained growth.
6. Customised Financial Services
Statistics published in the Gartner Digital Markets indicate that 72% of finance companies will invest more in software in 2024 than in the past years. To thrive in a dynamic market, companies must stay vigilant and adapt to trends to help them enhance productivity, streamline operations, and boost business efficiency. Numerous finance and accounting software provide off-the-shelf packages catering to client accounting, invoicing, booking, and file management requirements. These offer multiple package options based on your company’s yearly turnover and GST requirements.
Another popular choice is to opt for bespoke or customised financial solutions, which means you can request the cloud accounting vendor to tailor-make software, and add or amend certain features to suit your business’s requirements in the best possible manner. Many decision-makers searching for financial software are confused between opting for an off-the-shelf financial tool or getting one customised.
This crucial choice should be dependent upon several factors, such as the waiting time required to implement the solution, your business size, complexities involved in deploying either of the two software package models, maintenance needs, and budget, which in most cases is significantly higher in customised financial software.
When choosing between the two, consider your goal–is it a swift resolution or a comprehensive, bespoke financial tool for your business? Time is of the essence in this.
Examine your firm’s operational workflows–evaluate the scale, complexity, challenges, and necessary financial allocation. Strike the right balance between higher financial commitment vs exclusivity and alignment.
7. Regulatory Changes and Legal Compliance
A latest compliance and risk management entity’s study revealed that 85% of compliance professionals spend over 30% of their work time on repetitive tasks, contributing to stress and burnout. Generative Artificial Intelligence (AI) emerges as a solution, prompting compliance leaders to anticipate a substantial increase in technology spending, as highlighted in a mid-2023 report by Gartner.
Compliance professionals must leverage this new AI wave to reduce manual burdens, fostering efficiency, agility, and proactive risk prevention. As the regulatory aspect within the emerging trends in accounting evolves, adopting AI becomes a strategic imperative for navigating compliance challenges with resilience and foresight.
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Next steps
As you explore the recent trends in accounting that will shape its future in 2024 and years to come, don’t wait too long to embrace technologies that can help boost your business. Embrace the essence of sustainability in reporting, automation, invoicing, and payments and how it can impact your business processes and productivity if implemented. We hope this article educated you and effectively supported you in your trend analysis accounting journey.
More than ever, financial concierge services are trending as businesses seek personalised and comprehensive financial guidance tailored to their unique needs and aspirations. Think of it as having your personal financial advisor a call without having to set up a financial advisory team in-house.
