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- November 14, 2024
Top 15 Accounting Trends in 2024-25 To Watch Out For
The accounting and taxation industry is constantly evolving. In the past decades, it has witnessed a lot of changes. Mostly, this has happened due to innovation and technology. In this blog, we will take a look at the latest accounting trends in 2024-25. So, let’s take a look at the upcoming accounting trends that will impact 2024-25.
Accounting Trends to Watch Out in 2024-25
Digital Transformation and Automation
The digital transformation and automation is the most important trend to look out for in 2024-25. With the rise of Artificial intelligence and Machine Learning, automation is all set to transform the accounting industry. A lot of tasks will be automated, saving businesses critical time and resources. Tasks like data entry, bookkeeping, and compliance reporting will be automated. AI and ML are enhancing analysis capabilities and will increase accuracy. Result? Accountants and tax experts will be able to focus more on strategic tasks. Let’s take an example. An AI-powered tool can quickly identify any errors in financial reporting. This can be extremely challenging and time-consuming if done manually.
Remote Work and Collaboration Tools
COVID-19 is over, but a lot of changes have been brought about. One such example is the remote working. Today, remote working has penetrated all industries. And now it’s getting more popular in the accounting industry, too. Accountants are now using the latest tech and cloud-based platform to work remotely. This is giving businesses, access to a highly skilled workforce from across the globe. With real-time collaboration tools, information sharing is becoming easy, and client management is getting simplified, too. The only problem? This shift also brings challenges. For example, managing multi-state taxation and ensuring compliance with various jurisdictional regulations might prove to be a challenge.
International Taxation Challenges
Globalization is all set to go on. So, international taxation will be a challenge for most accounting firms. A lot of issues, base erosion, and profit shifting (BEPS) will be a tough nut to crack. Moreover, governments across the globe are tightening their regulations to stop tax avoidance. So, multinational corporations might feel the crunch, and this, in turn, will reflect on accounting firms’ plate! Accountants will have to constantly adapt themselves to the changing international tax laws. Only then can they offer better services to their clients.
Cryptocurrency Taxation
Cryptocurrency is slowly entering into the mainstream. People are accepting it as both a transactional currency and an investment opportunity. But at the same time, tax authorities are tightening the noose around these digital assets for taxation. So, accounting firms will have to gain extensive knowledge about how taxes work on cryptocurrencies. They will have to guide their clients on reporting requirements and ensure compliance with evolving regulations.
Data Security and Privacy Concerns
With the increasing digitalization of financial information, data security, and privacy have become paramount concerns. Accountants handle sensitive financial data, making them prime targets for cyberattacks. When accountants adhere to cybersecurity best practices, like robust data encryption and regular security audits, they can protect their client’s privacy better. Additionally, accounts will have to maintain a Written Information Security Plan (WISP) to safeguard client information and comply with regulatory requirements.
Green Tax Incentives
Governments are introducing tax incentives to promote environmentally friendly practices. Accountants need to be well-versed in these green tax credits and deductions to advise clients effectively. For example, tax incentives related to renewable energy investments, electric vehicles, and sustainable business practices are becoming more prevalent. These incentives can help clients reduce their tax liabilities while contributing to environmental sustainability.
Increased Scrutiny of Tax Planning Strategies
Tax authorities are placing greater scrutiny on tax planning strategies, aiming for increased transparency and ethical practices. Aggressive tax planning is under the microscope, and accountants must ensure that their strategies align with legal and ethical standards. This trend is clearly visible in the recent implementation of the Beneficial Ownership Information (BOI) reporting requirement. The aim here is to increase transparency in business ownership and control structures.
Cloud-Based Accounting
Cloud technology is revolutionizing accounting practices by providing secure, scalable, and accessible platforms for managing financial data. Cloud-based accounting software allows for real-time data updates, streamlined workflows, and improved collaboration among accounting teams. This technology eliminates the need for costly on-premises servers and IT infrastructure, making it an attractive option for firms of all sizes.
Enhanced Focus on Data Analytics
Data analytics is transforming the accounting profession by enabling accountants to extract actionable insights from vast amounts of financial data. Advanced analytics tools help identify trends, uncover hidden patterns, and make data-driven decisions. This shift allows accountants to move beyond traditional number-crunching roles and become strategic advisors. Result? Accountants will be able to deliver better guidance for better success.
Robotic Process Automation (RPA)
RPA uses software robots to automate repetitive accounting tasks. This includes data extraction from invoices, bank statement reconciliation, and financial report generation. This technology improves efficiency, reduces errors, and frees up accountants to focus on higher-value activities. RPA is becoming increasingly popular in accounting firms seeking to enhance productivity and streamline operations.
Increased Adoption of Blockchain Technology
Blockchain technology provides a secure and transparent way to record financial transactions. Its secure ledger system enhances auditability and reduces the risk of fraud. Blockchain can also facilitate automated tax calculations and payments through smart contracts. This will improve efficiency and accuracy in tax compliance.
Cybersecurity and Data Protection
As accounting firms handle sensitive client data, robust cybersecurity measures are essential. Implementing managed security solutions, real-time monitoring, threat detection, and data encryption helps protect against cyberattacks and ensures the confidentiality of financial information.
E-filing and Digital Signatures
E-filing and digital signatures are streamlining tax and financial reporting processes. These technologies reduce errors, expedite document processing, and enhance security during electronic transmission. The eco-friendly approach also aligns with the growing emphasis on sustainability.
Wrapping Up
The accounting profession is all set to witness dramatic changes as the technology advances. The professionals and accounting agencies will have to keep up with these changing trends. For example, at CROWGNLOBE, we constantly upgrade our infrastructure, focus on training our teams on the changing tech stack, and ensure all our experts have enough knowledge about changing tax regulations. This has helped us deliver outstanding accounting services, payroll services, and bookkeeping services. Remember, technology is not going to stop for anyone; you stop, and you get left out!
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