State of the Industry: Highlighting Current Accounting Trends

2021 has been a year like none other for people and businesses alike. Accounting has paralleled many of the professional challenges that other industries have dealt with, but the accounting industry has also seen some significant advancements.

We asked our experts to weigh in and contribute their feedback about the state of the industry. Find out what is currently going on in the world of accounting as we highlight current trends and hot topics:

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​Making Virtual Connections
In 2020 everything suddenly went virtual, resulting in haphazard and piecework technological solutions to keep business moving. But in this year, everyone perfected (or at least improved) their virtual solutions.

However, while some activities easily made the digital leap, others were met with greater challenges. In particular, human social interactions struggled to authentically go virtual. Video chat meetings have abounded since the pandemic hit, but this year networking made great strides to digitalize effectively, even among accounting professionals.

The desire to connect face-to-face in an in-person format did not abate during the lockdown. But without a way to do that safely, virtual solutions cropped up to fill the void. Digital accounting groups grew in popularity and virtual networking events became more mainstream. Accountants nationwide leveraged their professional and personal networks online to stay up-to-date on the latest accounting/finance topics, make new connections, recruit, and job search.

Hiring Difficulties
Like every other industry right now accounting is experiencing staffing shortages, hiring challenges, and onboarding obstacles.
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With these changes in the hiring climate, even recruiting firms are finding that they need to adapt their strategies to get in front of top candidates. As Quinn Finnigan, our Recruiting Services Leader, explains,

Accountants are, by nature, generally averse to risk. When you layer in an extremely high level of uncertainty, like we’re seeing in a global pandemic, whatever tolerance for risk someone had to move jobs goes way down. I’m witnessing this first-hand. More than ever before I’m having conversations that end with ‘It will take an amazing, almost perfect role for me to move jobs right now.’

And while accountants may not want to leave their existing roles, they continue to be in high demand. The result is more competition as companies with open positions compete against not only other openings but also accountants’ current employers.

To stand out these days, employers must increase their hiring packages with additional compensation, perks, and work flexibility. As a result, compensation studies estimate that accounting and finance salaries will rise by 4-16% in the next decade.  

But candidates are not simply monetarily minded – they are also looking for the kind of work-life balance that is achieved through remote or hybrid work arrangements, additional PTO, and flexible work schedules. On the subject of accounting salary trends our team explains, 

New employee expectations around remote work and flexible work schedules are finding their way into job postings and offer negotiations. These types of considerations are no longer being viewed as optional perks - remote work is now the norm, and many applicants are requiring it as a condition for employment. And it does not end there. Flexible work schedule perks are now becoming more commonplace as well. Simply put, many applicants are unabashedly demanding that future employers offer them to provide a more favorable work-life balance. This should not be overlooked when making offers to your top candidates because these factors are just as likely to sway their decision as compensation-related components.

Rising Costs
Everything is more expensive right now – labor, raw materials, equipment, technology, packaging, and shipping. As a result, business expenses are significantly higher than usual for all companies.

In particular, higher staffing costs in the form of salaries, benefits, hybrid work support, education, and so forth have contributed to rising costs for accounting services providers. In many instances, these added costs are being passed along to clients. However, even with rising services costs, clients are still seeing a savings when outsourcing their accounting functions compared to hiring accounting staff in-house.

Increased Automation
While AI can be used in a wide variety of accounting applications, the last year has seen automation being utilized specifically in areas where efficiency can be improved by eliminating repetitive manual tasks to reduce labor expenses.

Companies not yet using cloud accounting almost entirely made the switch over the past year, making cloud accounting solutions more ubiquitous than ever before. The benefits of cloud accounting such as cost savings, improved efficiency, and increased collaboration have served companies well through the pandemic, resulting in the kinds of improvements necessary to weather the storm. As a result, migrating to a cloud accounting system has been named one of the top ways to improve your accounting department quickly and a key component to automating your accounting and finance functions.

But implementing a cloud accounting system is by no means the only way that automation took center stage this year in accounting departments across the nation. It was also instrumental in the following ways:

• Payroll and benefits administration became increasingly complex as government programs were rolled out, making the need for automation in payroll and benefits administration even greater.
• Use of project management tools also rose dramatically, as workers spread across many different locations all needed to communicate regarding ongoing bookkeeping activities and collaborate on accounting projects.
• With the increase in cyber schemes over the last year, use of AI in fraud detection rose this year as well, making automated cyber security prevention a key component of today’s internal controls.

Improved Cyber Security
Axios has declared that “2021 was the year cyber security became everyone’s problem” due to the unprecedented rise in cyber security attacks. And, per their categorization of the situation, cyber security became an accounting-adjacent topic this year as well.

Accountants found themselves on the frontlines of preventing security breaches and rose to meet the challenge. Segregating duties to maintain proper internal controls in a remote work environment became more important as employees worked from home where there was less oversight. Security of financial data also rose to paramount importance as employees worked via home networks and, at times, on personal technology devices.
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Cyber security best practices within accounting teams got a 2021 facelift as well, with some companies making the requisite changes in-house and others outsourcing these functions. However, our experts like to point out: 

Remember, you can do everything right internally and still become a victim of a cyberattack because of a vendor’s vulnerability. Understand who has access to what information, both internally and externally. Pay particular attention to your bookkeeping company or outsourced accountant, software providers, web hosting platform, and other partners that may have access to your most sensitive data. Manage access to information across employees, third party contractors, consultants, vendors, and partners and only provide access to what is necessary. Additionally, make sure you know what is being done with information that is shared externally – who else has access to it, how it is being stored, and how it is being transmitted.

Need a reputable outsourced accounting solution? Hire our firm to perform the bookkeeping, accounting, and financial leadership activities you need to sustain revenue and promote business growth.