The world, as we know it, has undergone significant shifts in the last couple of years. Whether it is the Russia-Ukraine war, post-covid spending, fluctuating stock markets, inflation, or the possibility of a recession.

These events and their outcomes continue to impact the accounting departments and their operations. But as we enter into a new financial year, what accounting trends can we see in 2023?

Let’s find out!

1. Continuous accounting

Continuous accounting refers to using technology to keep tabs on and reconcile all of a company’s financial transactions in real-time. As a result, this allows for a completely paperless and digital accounting process.

The work of the finance department under this system is spread throughout the accounting period. If the processes typically associated with period closure, such as reconciliations, are added to regular operations throughout the month or quarter rather than being left until the last minute, then accounting periods can be closed quickly.

Furthermore, you can perform continuous and automated reconciliations and generate on-demand statements and reports. As a result, accounting procedures become more responsive to the company’s needs.

2. Reliance on data analytics

Accountants no longer focus on tax returns, budgeting, and predictions. Today’s accountants

• Interact with customers and investors
• Help create strategies
• Aid in evaluating investments
• Advise top executives on crucial business choices

They do all of this with data analytics. Moreover, accountants may employ data analytics to study customer behavior and spending patterns. This allows them to make more accurate predictions about future trends, which helps them improve their marketing strategies and strategies for expansion.

Thus, we can expect their reliance on data analytics to increase as their role takes on a new shape and form.

3. Cybersecurity training

One of the most common targets of data breaches is the finance department. Two things that could happen due to such breaches are:

• Email spoofing, in which a fake email looks like it came from a trusted source
• Identity theft

Accounting teams, who are already adept at reviewing the information and identifying irregularities, will still need coaching in recognizing potentially damaging emails and spotting assaults. The finance department has a unique chance to teach the rest of the company about cybersecurity and become advocates for it within the company.

4. ESG compliance

Companies will give Environmental, Social and Corporate Governance (ESG) a lot more attention, and new government laws on ESG-related topics are likely, particularly as they relate to public businesses’ financial reporting.

There is a growing trend toward making it a requirement to report information, like the financial risks that come with climate change and the greenhouse gas emissions that your business and its supply chains cause.

In fact, up to 60% of operational profitability may be influenced by ESG practices. Your company’s financial and accounting operations will be impacted by the need for increasing diversity from your company’s most important investors.

5. Cloud-based accounting systems

Accounting systems store sensitive information on a business, its customers, and its staff, including:

• Social security numbers
• Tax IDs
• Earnings reports
• Credit card data

Data leaks and breaches risk corporate expansion, client loyalty, and image. The solution? Cloud-based accounting systems. But why?

• It provides access to various resources, such as data stores, applications, and computer hardware.
• Cloud-based accounting systems provide strong security and a secure home for data.
• Also, they are regularly updated and tested for security.
• Companies that use cloud-based solutions can also limit who can see sensitive customer information and manage processes based on what each user can do.

If a business has strong internal procedures, it may be better able to protect itself from outside threats like data theft, fraud, and hostile cyberattacks.

6. Workplace wellness

Employees undergo a lot of stress and fatigue. As such, many companies are focusing on workplace wellness. These include offering wellness packages, wellness programs, leaves, and more.

And while this helps the employees, it increases the burden on the accounting department. Two reasons why:

• Accountants are responsible for ensuring that wellness program-earned health insurance discounts are properly reflected as withholdings.
• If the things included in the wellness program are to be deducted as business costs, accountants must be aware of how these deductions are affected by recent changes in tax law.

As a result, accounting departments have too many commitments and too few breaks. Thus, the focus may be on encouraging accountants to benefit from these wellness programs.

7. Increased awareness

Post-pandemic, there are significant changes in financial policies and compliances. A few of the relaxations have been lifted, while others have been changed.

As such, it is not only taxes that accounting and finance departments must keep an eye on; laws and regulations are also constantly changing. They must keep an eye on legislation like the COVID stimulus bill and make sure it’s being followed.

Wrapping up

The accounting landscape is ever-evolving as international relations change, the market fluctuates, and other economic factors come into play. But if there’s one thing that can help all accounting departments stay on top of their game, it’s making friends with technology – be it enterprise resource planning (ERP) systems, cloud software, or data analytic tools.

Simultaneously, they must pay attention to government guidelines and issuances and focus on reskilling and upskilling.

We are optimistic that after reading this blog, you now have a better idea of what to expect. But if you still have any questions, GJM & Co. will happily answer them. We will not only help you understand how your business may be affected but also take care of all your accounting and financial requirements. Be it filing taxes, bookkeeping, accounting, creating financial statements, or more.

Should you have any queries or need consultation, Schedule a Call today or write to us at info@gjmco.in.