What’s New for Accounting Firms in 2023?
What are upcoming trends for accounting firms in 2023 and beyond?
The accounting industry is rapidly changing to match the fast times we’re living in. Even the CPA exam underwent significant changes in 2021 and will further evolve in 2024. These changes focus on the importance of marrying technology with accounting, taxation, and audit. This shift underscores the need for all accountants, new and veteran, to look for ways to incorporate technology into the normal workflow.
Bottom line? If you want to build a successful accounting firm in 2023 and beyond, you must take an innovative stance and start adopting many, if not all, of the following trends. Otherwise, you risk being surpassed by other accounting firms that will.
The Adoption of Cloud-Based Accounting Software
Cloud-based accounting tools can make it easy for you and your team to access data from anywhere and at any time. You can use cloud-based software to communicate with your team members and they can use it to communicate with your clients.
Research shows that firms that embrace cloud technology are able to grow their year over year revenue at almost four times the rate of firms that are not in the cloud.
The benefits are huge: Cloud-based accounting software like Mango Practice Management offers enhanced data security, greater convenience to your clients, and better overall efficiency. Cloud-based accounting software will immediately reduce the need to manually input and repeat mundane tasks.
The Rise of AI
Artificial intelligence was once considered science fiction, but it has quickly become part of our daily processes. Many accounting firms use AI in the form of machine learning. Machine learning has led to knowledge discovery and, as a result, increased efficiency.
What exactly is machine learning?
Machine learning is using computer algorithms to analyze and identify data patterns. One major goal with machine learning is to make wiser decisions. For example, machine learning can help an organization make smarter predictions about the future. You can input your data into a software and the software can analyze and then “learn” from the past to make informed predictions or decisions.
While automation can simply perform the same tasks over and over again, machine learning adds the ability to learn from those tasks. Machine learning can positively impact accounting firms by reducing audit staff and the time spent processing data. Machine learning can also improve your firm’s ability to detect fraud and anomalies. It can be used to improve overall accuracy.
Artificial intelligence works in harmony with accounting software. In fact, the more you feed it, the smarter it can become.
A Move Towards Data Analytics
One major trend for 2023 is the move towards incorporating data analytics into accounting. Data analytics is looking at data and deriving insights that can help an organization make better decisions.
If you work for organizations, you already know that they have a ton of data at their disposal. Organizations are actively looking for accounting firms that can turn that data into valuable and actionable information. The organization will then use this data to take action, such as increase their revenue or decrease their spending. This will allow the organization to meet their business goals.
Data analytics can be descriptive and answer the question of what’s happening currently. You can use this information to create financial statements. Data analytics can also be predictive, answering what will happen next.
Data analytics can be diagnostic. You can use data to discover why something is happening.
Finally, data analytics can be prescriptive. It can be used to create a plan of action for what should happen next.
As an accounting firm, you can use data analytics to help your clients reduce their risks, improve their business’ performance, and possibly predict future market behavior. Your insight can position you as a trusted expert.
The Move to Client Advisory Services
Are you still offering the basic accounting services? It may be time to expand your current offerings – that is, if you wish to remain competitive.Are you still offering the basic accounting services? It may be time to expand your current offerings – that is, if you wish to remain competitive. Click To Tweet
As we discussed above, machine learning is taking over. That doesn’t mean that machines can replace you at your job. However, it does mean that you’ll need to re-position and challenge yourself to take on more nuanced jobs that software cannot do. That’s where offering client advisory services comes in.
Client advisory services include any service outside of the traditional tax, audit, and general bookkeeping core. Client advisory services help your clients achieve their financial goals. These are personalized recommendations for how your client can solve their financial dilemmas and increase their money work. In other words, you can become their financial advisor.
Client advisory services allow accounting firms to expand their business by opening up another stream of revenue.
If you offer these services to your clients, you’ll gain a ton of benefits. First, you can increase your engagement with your clients. Instead of only working with the client during tax season, you can begin working with them regularly throughout the year. This will no doubt increase the client’s lifetime value with your firm. Additionally, your client will come to perceive you as a trusted advisor, and not just “the tax guy.” You’re the expert who can help them make better financial decisions. As a result of your status elevation, they’ll be more likely to refer you to their social circle.
The Evolution of Client Portals
Client portals have been around for a while now, but they seem to suffer from one major problem: Clients hate using portals. Despite how useful accounting portals can be, some clients simply don’t like installing another piece of software or attempting to remember another user name and password.
To cater to those clients who don’t want to deal with the hassle of client portals, use an accounting software that allows clients to interact with you without signing in. Mango Practice Management Software can work seamlessly, directly from the client’s inbox. You can share files with your client and they can sign documents without either of you leaving your inbox. It’s convenient, bank-level secure, and so simple that your clients won’t get confused or delay getting back to you.
Learn more about Mango’s client collaboration here.
The Move to Mobile Computing
Mobile phones are becoming an essential part of how people work. Now that many workers (including some of your clients) aren’t tied down to traditional office spaces, phones have become a central part of the workday. Many people rely on their smartphone to conduct business, including accessing information, reviewing data, and signing documents. To accommodate the needs of now, be sure to make your documents available to clients who may be viewing on mobile devices.
In addition to focusing on clients and business expansion, 2023 will see a sharp focus on employee wellness. Wellness has become increasingly important. Mental health has especially received a lot of attention since the onset of the Pandemic. Isolation has increased anxiety and it’s affected all of us to varying degrees.
Many accountants are prone to stress, and chronic stress can ultimately lead to burnout. Employee burnout will negatively impact your accounting firm as a whole, and in many ways. First, burnout can lead to lackluster performance. Burned-out employees aren’t as productive as they once were. Once-shining stars can become black holes of apathy, and threaten to pull all other employees down. Employee burnout can also lead to careless errors that can cost your clients’ money and potentially cause you to lose their trust and their business.
By offering wellness programs to your employees, you’ll invest in the future success of your business. You can also use it to sweeten your hiring package to potential employees you’re hoping to hire in the future.
The future is always uncertain, but this much is true: Accounting clients will continue to value organizations that prioritize convenience and innovation. Start incorporating the above trends to push your accounting firm forward.
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