The view ahead: four accounting predictions for 2024
The view ahead: four accounting predictions for 2024
By Adam Zoucha, MD EMEA, FloQast
The world is changing fast. Economically, politically, and technologically, accounting teams and companies face a near-constant change flow. It can be hard to know how to future-proof your business, where and when to invest, and where the next challenge may come from. But if you know what to look for, there are signs of what 2024 may hold for the accounting profession. This article unpacks four areas that will be key to accounting success in the new year: people and talent, compliance and ESG, accounting technology, and that buzziest of buzzwords – AI.
People and talent
The accounting skills shortage is, unfortunately, likely to get worse. FloQast data suggests that a significant proportion of accountants (53%) are ready to walk away from their current employer if there isn’t a significant transformation of their roles and responsibilities. Even if not all of them follow through, such an exodus could result in massive consequences for businesses across industries. The same survey series found that 99% of accountants are burnt out, 60% struggle with work-life balance (doubting they can complete the work they’ve been assigned), and only 5% would rate their fulfilment in their job as an A+.
Business and HR leaders must work together to find solutions to keep their accountants fulfilled. These could range from finding modern tools that use automation to end mundane ‘bean counting’ to providing mental health support during busy times of the year like tax season.
Compliance, ESG, and IPOs
CFOs report fears of a greater risk of noncompliance, mostly due to concerns around a lack of strategy in their current compliance function, insufficient staffing and skills gaps in their teams. Not to mention the absence of digital transformation – in which technology is increasingly implemented and embraced throughout the organisation – which can help teams operate more efficiently and collaboratively within existing processes. As a result, CFOs must prioritise investment in compliance in 2024, especially as new reporting requirements, like the Corporate Sustainability Reporting Directive (CSRD) come into effect. When the legislation goes live, 10,400 non-EU enterprises will be subject to CSRD compliance, as a third of these organisations are based in the United States. Those who tell their ESG story via sound data collection, standardisation and accuracy, will ensure audit-ready, error-free reporting.
A potential jump in IPOs will also drive compliance requirements. With the inflationary needle (hopefully) moving in the right direction, the IPO market is showing signs of promise and may continue a recovery into 2024. Organisations looking to IPO will need to supercharge their processes. Compliance processes will need to be robust to stand up to investor scrutiny. Not only does compliance help companies avoid corporate and individual liability, but it also enhances investor confidence by demonstrating a commitment to transparency and accountability.
In the new year, automation will continue to reshape ‘traditional’ accounting processes. Streamlining data entry, reconciliation, financial reporting, and compliance-related activities while also working to modernise the close process will all become pivotal if accountants and their companies are to succeed. As technology takes on a more significant share of routine tasks, financial experts must adapt and add value in other areas of the company. And as the role of finance professionals evolves in this way, there will be an even stronger emphasis on data-driven decision-making.
This kind of digital transformation has swept through many industries, and now accounting organisations are under pressure to achieve financial transformation through technology. For example, cloud-based software is becoming an integral part of accounting operations, as companies embrace a cloud-first strategy for scalability, flexibility, and innovation. Simultaneously, as organisations integrate cloud-based tools and services into their core infrastructure, they will increasingly need to implement cloud-based security measures to bolster their financial transformation efforts. Additionally, AI and automation will continue to be increasingly used to streamline routine tasks, saving time for accountants.
Finance teams will likely continue to undergo digitisation over the coming 12 months. A dynamic approach to financial transformation will put organisations one step ahead. Tools that advise on financial preparation, compliance roadblocks and strategic planning will ensure businesses are ready for the next phase of their growth journey.
We end with the Collins Dictionary’s word of 2023: AI. Like it or not, it’s transforming the way we work. While there are concerns about the use of this technology, when used wisely it can be a powerful ally to support understaffed teams, enhance strategic thinking and boost employee potential.
But, you might ask, what does AI have to do with accounting? Well, as with all industries, as targeted artificial intelligence applications come to maturity, they are going to become central to the success and viability of accountancy businesses. The accountancy sector is experiencing a labour shortage, and this is where AI can step in to process data, provide valuable insights and streamline everyday tasks. Improved efficiency frees up accountants’ time so they can focus on complex financial analysis. We will increasingly see accountants embrace AI tools, meaning they can be more strategic and focus on organisational long-term success.
Indeed, to keep the industry as a whole afloat amidst talent shortages and retention issues, accountants must modernise and strive for transformation on all levels: financial, digital, and structural. Such a transformation can be enhanced by AI – not just implementing it in limited use cases, but normalising its widespread usage. Indeed, we may well soon reach the point where companies that don’t implement AI in some way will be seen as ‘falling behind’ their competitors. As a result, CFOs will be at the forefront of enabling digital transformations – adding another layer to the accounting function’s already growing strategic importance.