The accounting world is changing rapidly. As emerging technologies and shifting business priorities disrupt old processes, accountants must adapt to stay competitive. In 2023, finance teams that embrace innovation and harness it to provide strategic value will pull ahead of their peers. 

This comprehensive article explores the 5 biggest trends that are redefining accounting. By getting ahead of these changes and skillfully leveraging them, CFOs and their departments can reduce costs, gain insights, manage risks, and drive business growth. Read on for an in-depth look at what leading finance functions will focus on this year.

Automating High-Volume Repetitive Tasks

One of the biggest shifts on the horizon is intelligent automation taking over repetitive, routine accounting work. This includes standard processes like accounts payable, accounts receivable, expense reporting, journal entries, reconciliations, and basic data entry. 

According to research by KPMG, about 65% of CFOs say their top priority for finance automation is improving efficiency by eliminating tedious manual work. Much of this routine transactional work provides little strategic value and can be done better and faster using rules-based software automation tools combined with new technologies like artificial intelligence (AI) and machine learning.

SAP Concur and AppZen are two leading providers of intelligent process automation solutions tailored for common finance department tasks. Cloud-based accounting platforms like NetSuite, Sage Intacct, and QuickBooks Online also integrate workflow automation across core accounting activities.

The benefits of automation for recurring low-value tasks include:

– Reduced manual workloads so accountants can take on more rewarding analysis and advising roles  

– Improved efficiency, speed, and accuracy by removing human errors

– 24/7 processing without pauses for nights, weekends, or holidays

– Better version control, audit trails, and security for sensitive financial data

– Savings on labor costs by eliminating redundant roles

According to McKinsey, automation can reduce the time spent on repetitive tasks by up to 90%. This frees accounting teams to provide real-time insights and become true advisors to the business.

Transitioning to Continuous, Real-Time Accounting

For generations, accountants have worked in monthly, quarterly, and annual cycles. Closing the books was a drawn-out, rigidly scheduled ordeal. But new technology is making real-time, continuous accounting possible.

Leading accounting departments are already testing out continuous accounting. A PwC study found about 43% of finance teams expect to implement continuous accounting by 2025. Key enablers include cloud-based ERP systems and accounting platforms plus automated workflows. Together these allow transactions to be captured, aggregated, matched, and posted as they occur instead of waiting for artificial monthly cut-offs.

Continuous accounting powered by automation provides real-time visibility into the real numbers at any point. Benefits include:

– Making data-driven decisions using live financial data instead of lagging reports

– Rapidly detecting and responding to problems before small issues become big risks 

– Giving executives up-to-date dashboards to monitor cash flow, profits, and other KPIs

– Driving forecast accuracy by factoring in emerging trends faster

– Shifting from historical budgets to dynamic forecasts that reflect real-time results

– Providing instant feedback on the impacts of business decisions 

– Supporting value-added analysis of why changes are occurring 

Though significant effort is required to re-engineer systems and processes, over a quarter of CFOs in one survey say continuous accounting is their top priority for the future. The payoff can be game-changing in terms of insights and agility.

Leveraging Advanced Analytics for Deeper Insights

Another key trend is finance teams adopting sophisticated analytics to turn raw accounting data into strategic business insights. Modern analytics examines historical patterns and relationships to yield forward-looking recommendations that enhance decision making.

Tools like Microsoft Power BI, Tableau, and Oracle Analytics Cloud make robust analytics accessible to most finance departments. According to Gartner, uses cases relevant to accounting include: 

– Financial modelling to forecast revenues, costs, profits, cash flow and KPIs under different scenarios

– Revenue analytics to optimise pricing, understand customer profitability, reduce churn, and identify upsell opportunities

– Cost and profitability analysis to pinpoint where margins are being lost 

– Benchmarking financial and operational metrics against budgets, forecasts, past performance and industry standards  

– Anomaly detection using machine learning algorithms to spot unusual transactions that may signal fraud 

– Process mining to analyse patterns and recommend improvements to accounting workflows

Leading-edge firms are also exploring more advanced technologies like predictive analytics, AI, and natural language generation to turn raw data into narrated, actionable strategic insights.

The benefits of deeper analytics include seeing trends and risks sooner, simulating future scenarios, continuously optimising costs and profits, and enabling data-driven business decisions.According to FSN, 95% of CFOs say big data analytics is crucial to their financial planning and analysis processes.

Blockchain: Enhancing Security, Transparency, and Trust 

Blockchain is an emerging technology that is starting to gain traction across the accounting domain given its ability to improve the security, transparency, and trustworthiness of financial data. 

A blockchain is an immutable sequential ledger that is distributed across multiple participants in a business network. Every transaction is time-stamped and verified using cryptography to prevent manipulation. This creates a complete, shared audit trail visible to all approved stakeholders. 

According to a survey by PwC, over 65% of accounting and finance executives say they expect blockchain will be integrated into their systems in some form by 2025. Uses cases related to accounting include:

– Auditing – Provides real-time visibility and assurances over transactions to prevent and detect fraud

– Accounts receivable – Allows faster AR settlement with digital currencies and smart contracts 

– Supply chain payments – Streamlines and automates B2B payments and cash flow

– Compliance – Immutable records ease regulatory reporting burdens

By enhancing transparency, security, and collaboration, blockchain has the potential to automate and optimise many accounting and finance workflows. Leading organisations like KPMG, Oracle, and SAP are already providing blockchain-enabled solutions tailored for the accounting space.

Sustainability and ESG Reporting Taking Center Stage

As stakeholders like investors, employees, and regulators demand more accountability around environmental, social and governance (ESG) issues, accounting teams are being asked to provide the underlying data and disclosures.

 topics like climate impacts, DEI, executive compensation, and ethical supply chains. Producing accurate and consistent ESG reports requires collecting and consolidating new data sources from across the business.

Key drivers of the focus on ESG include:

– Investors increasingly favour companies with strong sustainability measures. According to KPMG, ESG data has impacted institutional investment decisions for 75% of money managers.

– Employees want to work for responsible corporations. CSR and DEI metrics are top considerations for younger generations entering the workforce.

– Consumers gravitate towards brands that align with their values related to sustainability, fair labour practices and more. 

– Regulators globally are enacting new standards around climate risk disclosures and other ESG reporting. In the US, the SEC has proposed mandatory climate-related disclosure rules.

– CEOs see sustainability as directly linked to long-term profitability. A survey by PwC found 95% of CEOs say ESG helps drive financial value.

Given this rising focus, accounting teams need the right tools to collect, analyse, and disclose reliable ESG metrics. SAP Analytics Cloud, OneTrust, and Workiva offer ESG reporting solutions tailored for accountants.

For companies to attract top talent and capital in today’s market, robust sustainability measures and disclosures are becoming mandatory. Accountants play a crucial role in quantifying, reporting on, and helping improve ESG performance.

The Road Ahead

The accountants that will thrive in the future are those who embrace new technologies like automation, blockchain and analytics rather than resist them. Though learning new tools and processes requires an investment, the payoff is higher efficiency, richer insights, lower risks, and more strategic value for the businesses they support.

While change can feel daunting, these new capabilities give forward-looking accounting departments an opportunity to evolve their roles from purely transactional to much more strategic and value-added. 

By getting ahead of trends like automation, real-time reporting, advanced analytics, blockchain security, and ESG disclosures, accountants position themselves as true partners in driving better financial decisions and performance.

Those who lag behind by clinging to outdated manual methods risk becoming obsolete. The competitive landscape demands that CFOs and controllers make innovation an urgent priority.

Hopefully this overview provides useful insights into the key trends that will shape accounting excellence in 2023 and the coming years. Please reach out if you need any help assessing new technologies or upskilling your team to leverage them. Our firm specialises in helping accounting departments transform to provide strategic insights and value.