Accounting
Predictions for the Accounting Profession: 2023 and Beyond
The end of the year means it’s time to get ready for another busy season and to tune up your strategic plans for the years ahead.
Dec. 06, 2022
The end of the year means it’s time to get ready for another busy season and to tune up your strategic plans for the years ahead. It’s also a time for consultants to the profession to noodle our brains and think about what “could be” in 2023 and beyond, which could inevitably have an impact on those plans. With that in mind we present our 2023 accounting technology predictions.
- Outsourcing Bloom: With staffing continuing to be a significant issue for most accounting firms we anticipate a noticeable acceptance of both offshore and US-based onshore services as the status quo and a bloom in service providers being used by firms.
- Workflow is King: Workflow tools have been one of the key innovations improving accounting firm production and we expect to see firms look to industry ERP (Enterprise Requirements Planning) solutions to make small inroads into firms along with boosted awareness of the accounting vendor workflow systems, which traditional firms will transition to.
- “Passwordless”-Nope: With major corporate players promoting passwordless authentication standards, accountants will stick with familiar identity management solutions including complex 12+ character passwords, MFA (multi-factor authentication) ,and password wallets for identity management through 2023.
- Modern Portals Arrive: Robust featured client portals with dashboards and workflow capabilities that actually make it easier to collaborate with clients will finally arrive from the major accounting software vendors by the end of 2023 to be ready for the 2024 busy season.
- Windows 11 Wins: Adoption of Microsoft’s latest operating system will be the standard on all new computers now that the big three (CCH/TR/Intuit) provide support. However, with Windows 10 support not ending until 2025, most firms won’t upgrade existing Windows 10 PCs until there is a security reason to have to.
- Audit Binders on Hold: While the major accounting vendors will be touting their engagement binder solutions being ready to replace traditional on-premise solutions, 2023 will be another year of “wait and see” pushing any significant adoption to 2024.
- ESG Awareness: This is the year that Environmental, Social and Governance initiatives get some teeth with auditing standards and guidance being created to expand assurance services. Initially the largest US accounting firms will pave the way but smaller “boutique” firms will evolve.
- Blockchain Banking: Major US banks will stop talking about, and actually pilot, blockchain solutions to facilitate financial transactions of fiat currency. This will open the door to financial auditing of a blockchain in 2024.
- Learning Prioritization: We anticipate there will be a surge in learning and change management solutions to help firms adapt more effectively to the constant onslaught of new techs and processes. This will include hiring of outside consultants and internal change “officers.”
- VR/AR/MR Exposure to Accountants: Consumer products such as Ray-Ban Stories Smart Glasses and Apple’s View headset, will get noticed by accountants (when their kids, neighbors invite them to play). These consumer devices combine Virtual, Augmented, and Mixed Realty capabilities into a “useable” device in 2023 which will open accountants to the possibilities of the Metaverse in 2024 and beyond.
We hope our 2023 predictions will provide some thought provocation and maybe a little inspiration for improving your accounting technology outlook for the New Year. However, before we walk away from “prediction mode,” we also want to fess up to our 2022 predictions and results which we self-scored as five WINS two LOSSES and three DRAWs based on the consulting interactions and research, we conducted within the accounting profession this year. Read on to see if you agree with our assessment:
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Last Year’s Predictions (December 2022):
- Security Remains Top IT Priority Driving MSS/Cloud Adoption: Attacks on firms and clients are becoming increasingly sophisticated with hacker groups taking advantage of new attack vectors in a more condensed time frame. This will drive increased adoption of managed security services (MSS) and the use of cloud providers with enterprise class security resources and tools, which is our top prediction for 2022. (WIN-more firms than ever are outsourcing to cloud and managed security.)
- Identity Management: With compromised passwords being one of the key targets of hackers, firms will increase the use of multi-factor authentication tools as well as password vaults/wallets to ensure password complexity and minimize the re-use of old passwords and numerical derivatives, …maybe even “triple” authentication to include biometrics or hardware devices that end users will carry with them. (WIN-while we did not see much “triple” authentication being touted we did see MFA/password wallets rise.)
- Cloud Disrupts Business Models: Firms trying to build a hybrid technology stack of on-premise servers and cloud applications will be thwarted by those building their entire tech stack in the cloud with pre-integrated applications and technology services further driving cloud adoption. (WIN-cloud based tech stacks were a clear trend.)
- Windows 11 Endures Slow Rollout: While Microsoft will tout the security of Windows 11 amongst the reasons to upgrade, there will be slow adoption within firms in 2022 until major tax application vendors promote supporting the new version so expect to see a lot of Windows downgrades on new PCs. (WIN-surveys showed slow adoption in accounting firms.)
- Microsoft Continues Wins: While we believe Windows 11 adoption will be slow in accounting firms, the adoption of Microsoft TEAMS, Power BI, Power Automate, Power Apps, etc. will see a surge amongst accounting firms along with the training resources to support those apps. (WIN-We saw MS TEAMS usage expanded in all firms we consulted with.)
- Advisory Gets Respect: The advisory “experiments” firms conducted in 2021 and discussions of successful advisory practices at conferences in summer 2022 will drive the push for firms to truly make building advisory services the priority for the second half of the year. (DRAW-Yes for medium and large firms but minimally prioritized in smaller so we can’t claim a clear win.)
- Remote Audit Tech Spotlighted: The use of remote audit technology such as smartglasses, drones, and maybe even robots will become a reality in larger firms. (LOSE: while Big 4 firms are testing such tools they have not made it to the next grouping of firms.)
- AI, …”Augmented” Intelligence Garners Inroads into Firms: While lots of applications say their tools utilize “AI,” the reality is that in most cases it is intelligence that accountants have programed into the application in an “If this happens-then do this…” type scripting which we refer to as augmented intelligence. Expect to see a noticeable uptick in adoption of this type of AI in 2022. (LOSE: We saw lots of touting but not much implementation.)
- 5G Sees Adoption: While I won’t be so bold as to predict firms will replace one of their Internet connections with a 5G router (last year’s failed prediction) we will see accountants utilize 5G hotspots for remote connectivity instead of relying on public/client WiFi. (DRAW-5G usage increased significantly but could not find verification of hotspot surge.)
- Portal Modernization: Expect to see the Big Three Accounting vendors upgrade their portals to incorporate “modern” capabilities such as workflow and PBC lists, which will include some serious acquisition activity. (DRAW-some improvements made but no portal acquisitions.)
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Roman H. Kepczyk, CPA.CITP, CGMA is director of Firm Technology Strategy for Right Networks and partners exclusively with accounting firms on production automation, application optimization and practice transformation. He has been consistently listed as one of INSIDE Public Accounting’s Most Recommended Consultants, Accounting Today’s Top 100 Most Influential People, and CPA Practice Advisor’s Top Thought Leaders.