Each new year, after champagne toasts have been made, and last year’s books are (finally) closed, we are afforded a unique opportunity to reflect on what we're leaving behind. Hindsight brings the lessons learned for the year into sharp focus, and we can approach the next big thing a little wiser. Maybe a little more confidently, or even, cautiously, too. With all of that out of the way, we think this is a good time to learn about the accounting trends you need to keep on your radar this year and beyond.
The last two years have been challenging for many. We have all had to adapt to the ‘new normal’, both personally and professionally, but 2022 seems filled with hope. Hope that we are close to emerging from a two-year pandemic that has changed the world forever, but change can be filled with opportunities for those who chose to look for it and take advantage.
It's so important to remember that market predictions can be slippery. There is no magic formula or special talisman that can guarantee the outcome you anticipate – not that every CFO, controller or accountant hasn't fantasized about one at some point – but a healthy dose of grounded critical thinking and a decade's worth of lessons learned can sometimes get you close.
Check out these 6 accounting trends to watch:
The Accounting Talent Shortage Will Hit New Highs
With Covid forcing us to reprioritize our lives, the great resignation is upon us. This recent mass exodus combined with baby boomers retiring in droves prior to Covid will lead to fewer and fewer accountants available to fill the jobs available today, let alone the double-digit growth that is expected to occur in available positions over the next decade.
In 2018, The American Institute of CPAs Economic Outlook Survey showed that 43 percent of CEOs, CFOs and Controllers indicated that they currently have too few employees, a growing trend. A survey we conducted at Personiv supports these findings, with 85 percent of accounting executives wishing they had more time to do strategic work and only 19 percent feeling like they could easily find talent to share the load.
It's not all doom-and-gloom -- there are solutions to be had if you're willing to approach the problem of talent scarcity from new angles. Remote work has proven successful for professionals across every industry and many workers are not willing to completely give that up as we near the end of the pandemic.
Remote or flexible work arrangements are expected these days and not offering either can cost you qualified talent. Furthermore, flexible work arrangements attract baby boomers and millennials alike. The former may have left the office but not their desire to contribute to the workforce behind, while the latter is increasingly demanding a higher quality of life through work-life balance.
Outsourcing Will Continue to Grow in Popularity
Continuing with the idea that a remote workforce is a trend that’s here to stay, the need to hire people who are local to an office building is now a thing of the past, which means the globe is now your talent pool. The rise of remote work will contribute greatly to the growth of outsourcing. If companies were opposed to hiring a remote team abroad, now, having even internal employees work remotely, they are more likely to be interested and less reluctant to outsource certain functions to a third party at a lower cost.
This new way of thinking combined with the accounting talent shortage will mean explosive growth for outsourcing in 2022 and beyond. Accounting talent with excellent experience supporting US companies is plentiful overseas, so trust your accounting to a service provider who specializes in doing it well.
Automation and AI will Continue to Transform Accounting Trends Moving Forward
Accounting automation simply means that the capturing, manipulating, and interpreting of transactional data is done by software - with less dependence on manual transactional entries being done by people. The right software and tools can help companies deliver accurate, streamlined financial management and allow them to access real-time data to make faster decisions.
Artificial intelligence (AI) is a wide-ranging branch of computer science concerned with building smart machines capable of performing tasks that typically require human intelligence - can allow accountants to redirect the time that they used to spend on mundane tasks toward performing high-value, high-impact tasks.
Suggested Reading: Artificial Intelligence in Accounting and the Evolution of the CFO
Soft Skills Increase in Importance
The days when an accountant could sit in their office crunching numbers is a thing of the past. While many technical tasks are being automated, the ability to communicate in a way that makes sense to someone is incredibly valuable. Furthermore, as the walls continue to crumble between operations and accounting, accountants, especially at the executive levels, benefit from creating relationships across the organization.
Developing soft skills means cultivating the ability to connect with people and maneuver in complex situations. It’s through soft skills that accountants can develop true relationships across the organization to become strategic advisors to the business.
Data-Driven Decision Making Will Be More Important Than Ever - Accounting Trends
As data becomes increasingly available through technological advancements -- and companies gain access to it in real-time -- data-driven decision making is more important and valuable than ever. Gone are the days when gut feelings make decisions. Hard data is helping to drive smarter, more strategic decision making and a company’s ability to collect and manipulate its data is becoming a differentiator.
Companies who have the time and ability to collect data can make smart investment decisions by analyzing product margins, their most profitable sale points and historical data along in conjunction with outside information to make predictions about the future.
There isn't time for companies who want to remain competitive to drag their feet on this one – looking at you, industry-wide slow adoption of cloud-based computing – they need to invest in technology that will collect and cleanse data, hire data scientists and ensure teams are appropriately staffed to make the most of data analyses as soon as they can in 2022.
Accounting Will Move Away From Backward-Looking and Toward Forward-Thinking
Twenty years ago, the idea of "strategic accounting" was just emerging, today it is something that is expected of many CFOs and accounting departments. It’s no longer enough for accountants to "simply" compile accurate and timely financial statements reflecting historical results, organizations are looking to their accounting departments to help drive growth.
Businesses need accountants who can use data to provide advice and guidance on the implications behind the numbers and possible strategies to increase value and growth. Universalizing systems into a "single of the truth" and moving to the cloud for real-time access to data will help companies adopt new forward-looking outlooks, and so will outsourcing. By freeing up internal resources to focus on higher-end, value-add activities, CFOs can develop growth strategies and leave the lower-level processes and activities to automation and offshore talent.
While there is no crystal ball heading into 2022, we expect these trends to grow as we move out of the pandemic. To hear from CFOs on what challenges they are facing today, check out our podcast, CFO Weekly where I speak with leaders on how they are getting ahead in uncertain times.
In-person events more your speed? We will be hosting CFO Leadership LIVE panels in cities across the state of Texas this year. Follow us on LinkedIn to see where we go next.
About the AuthorFollow on Linkedin More Content by Megan Weis, CPA, MBA