Accounting Trends in 2020
The accounting industry continues to change rapidly. Tech-based changes, such as the advancement of artificial intelligence (AI), continue to evolve. For those interested in accounting or financial management, an aptitude for technology and an eye on the future are more important than ever. Individuals interested in working for nonprofit organizations, the government, or their own financial businesses should familiarize themselves with big data analytics and develop the skills necessary for utilizing evolving technologies.
Students interested in pursuing a career in financial management can earn an advanced degree to develop the skills they need. By earning a Master of Science in Accounting and acquiring financial management, social entrepreneurship, and business skills, students can become competitive in the job market.
Why Accounting Shows Promise in 2020 and Beyond
Accountants are trusted and sought-after consultants and team members in companies of all types and sizes. Though AI is entering this field, it does not present a major threat to professionals in accounting or financial management as it might in other areas. Rather, technology may help accountants perform their work better and offer greater value in their services. With the time freed up from less valuable items and tasks, individuals can focus on the bigger picture. They can suggest and implement strategies for business growth and development that will provide greater return on investment for businesses. While technology plays a role in accounting trends for 2020 and beyond, prospective accountants should be knowledgeable of other key trends in accounting.
Key Trends in Accounting
From hiring trends and high salaries to new opportunities for tech-savvy professionals, there is a lot for individuals in this field to be optimistic about. Understanding where accounting is going will help current and future accountants see the potential in this profession. Looking ahead, it’s worth considering many key accounting trends that are reshaping the industry, including:
- A strong demand for accountants with master’s degrees
- A continuing need for accounting services among small businesses
- Opportunities for social entrepreneurship
- The demand for a global perspective
- The need for tech-savvy accountants who can combine automation with insightful analysis
The following trends indicate that accounting is a promising career for both established professionals and new graduates to pursue. Keeping these accounting trends in mind, accountants can position themselves to leverage new technologies and meet their clients’ evolving needs.
Salaries and Revenues Are Increasing
Individuals working in a corporation or the government can take on leadership roles, working in accounting or financial management positions. Other individuals can be leaders in their own businesses and handle their own financial records and documentation. Among these, roles such as financial consultants, controllers, and financial managers have a positive job outlook. The BLS indicates the job outlook for financial consultants is growing at 7%, and the job outlook for financial managers is growing at 16%, much faster than average jobs. These individuals in financial leadership produce financial reports and strategize plans to achieve long-term goals.
With technology rapidly redefining clients’ needs and wants, innovative and educated professionals can gain an advantage. Staying ahead of accounting trends by pursuing higher education now may help prepare accounting professionals to tackle the changes anticipated in the near future.
While most employers seek candidates with a bachelor’s degree, prospective accountants can make themselves more competitive and qualify for leadership roles with an advanced education. Some accountants pursue specialized certifications in specific accounting fields, while others earn a master’s degree to build upon their knowledge and improve their job prospects.
Accounting Is Becoming More Advanced
The shape of the accounting industry is undoubtedly changing as AI becomes more prevalent. By 2020, 40% of accounting work is expected to be replaced by robotic technologies, according to Accounting Today. The BLS predicts that the automation of common accounting tasks will allow the modern accountant to become more efficient and take on greater responsibilities. Instead of decreasing the need for accountants, automation will free accountants for more analytical and advisory duties. Therefore, professionals who stay up to date on accounting trends will be better prepared for the advancements in their field.
In a study by Wasp Barcode Technologies, businesses reported that their top complaint regarding accountants was that they were more reactive than proactive. A lack of guidance was another major complaint that surfaced among businesses of all sizes. Professionals who can counter these criticisms will have the potential to make great strides in the industry.
Small Businesses Need Accounting Advisors
The U.S. Small Business Administration considers 99.9% of U.S. businesses to be small. About 30.2 million of these businesses exist in the United States, creating a prime job market for accountants who can help meet this sector’s needs. According to a U.S. Bank study, 82% of businesses fail due to poor cash flow management. Improper pricing is an issue for 77% of small businesses, and starting out with too little money was an issue for 79% of those that failed. An accountant with a specialty in small-business management can help entrepreneurs avoid these issues and keep their companies out of the red. With startups constantly emerging, there’s no shortage of opportunities for accountants who are equipped to assist small-business owners with their financial management, risk mitigation, and long-term strategic planning.
A study by the International Federation of Accountants (IFAC) revealed that small-business owners consider accountants among their most trusted advisers. As such, organizations rely on these financial managers working in their organizations to provide consultation as financial advisors. Relationships between clients and advisers are usually long term, giving both parties the chance to familiarize themselves with one another. This type of business relationship is highly beneficial, as accountants have the opportunity to fully assess the client’s needs and provide evolving solutions that adapt to business trends in accounting.
Taxes Are Becoming More Complex
The Tax Cuts and Jobs Act of 2017 brought significant changes to the U.S. tax code. This has created a far more complicated environment for individual income tax and will likely generate more opportunities for accountants who are equipped to help. This legislation also has a significant impact on businesses, so accountants can likely find opportunities assisting both.
Of particular concern for businesses are:
- The new deduction for business income from pass-through entities
- Stricter limits on business expenses used for meals
- The elimination of deductions for expenses related to entertainment or recreation
- Limits on deductions for business interest expenses
- New rules for the application of like-kind exchange treatments
- Excess business loss limitations
- New rules for expensing depreciable business assets
Well-placed accountants who are prepared to deftly navigate the new tax laws may have the opportunity to connect with a wide customer base of companies and individuals who need these services.
Financial Management for Organizations and Clients
A CPA.com study found that 78% of CPAs feel it’s important to prepare their clients for future challenges, which includes trends in accounting such as changing technologies, increasing economic risk, and an evolving marketplace. Financial consultants and controllers working for organizations will be responsible for understanding changes in the field, as they provide consultation and strategize financial plans for the future.
Eighty-two percent of CPAs indicate the need to better understand innovation, and just 8% believe their profession is ready for the future. Still, a great number of accountants see the future coming and are preparing themselves to meet it. Among accountants, 39% describe themselves as early technology adopters, and 66% are interested in investing in AI.
Accounting professionals who are poised to make the most of the technology available to them are likely better equipped to meet the growing demands of their organizations. Understanding how to automate simple tasks and leverage big data and analytics to provide more insightful, personalized services is becoming one of the most crucial accounting skills.
Learn More About a Master of Science in Accounting
To prepare for the future, today’s accountants are considering advanced education. An online Master of Science in Accounting from Regis College allows students to pursue their degree from home, the office, or anywhere that is convenient. They work alongside faculty who bring extensive real-world experience to the table. The curriculum revolves around a managerial perspective and business management, which allows students to focus on what they are most passionate about as they prepare for the future. As students develop skills in strategy, global perspective, ethics, and business perspective, they prepare to work as accountants as well as to manage others.
Learn more about how Regis College’s online Master of Science in Accounting can teach you about accounting trends in 2020 and beyond, preparing you for a successful career in accounting.
Accounting Today, “Voices Job Disruption Is Quickly Coming to Accounting, Too” AICPA, 2017 Trends CPA.com Study, “Are CPAs Future Ready?” IRS, Tax Cuts and Jobs Act: A Comparison for Businesses Preferred CFO, “Cash Flow: The Reason 82% of Small Businesses Fail” U.S. Bureau of Labor Statistics, Financial Managers