CPA Practice Advisor, Canopy Survey Glimpses the Future of Accounting

The future of the accounting industry is unclear, but one thing is certain—the rapid change that is occurring will likely continue for a while.

Between the rise in the prevalence of client accounting service (CAS) firms compared to traditional accounting and bookkeeping practices, the influence of new tech, and world-changing events, a plethora of factors are currently reshaping the very nature of this profession.

A recent survey conducted by CPA Practice Advisor and accounting practice management software provider Canopy revealed several fascinating insights into the changes taking place in this space—changes that all accounting, bookkeeping, and CAS professionals should keep a close eye on.

Accounting technology

From the humble spreadsheet to all-encompassing practice management platforms, accountants and bookkeepers have long relied on tech to perform their jobs to the highest possible standard.

Digital transformation remains a powerful factor driving change in the industry. The survey report revealed a number of key findings about how accounting and bookkeeping professionals are using technology.

Digital transformation and cloud-based accounting technology

The majority of respondents from the survey (66%) reported that they do most of their business digitally, a trend that is expected to increase to 84% within three years.

Besides the software necessary for auditing, financial reporting, and other tasks specific to accounting, bookkeeping, and CAS, respondents said that digital tools like client portals and video conferencing platforms have become essential for optimizing client relationships.

The study also revealed that these tools are essential for remote and hybrid work, which 67% of participants said they currently offer to employees.

Remote and hybrid work

The study also produced some interesting data surrounding remote and hybrid work offerings, indicating they are likely to stay.

• 53% of respondents said their current remote and/or hybrid work offerings will remain the same.
• 35% said they planned to increase these options for employees in the future.
• Only 12% of firms reported that they will offer fewer remote or hybrid options for employees.

Artificial intelligence (AI) and accounting

Data from the survey suggests that participants in the study are warming up to leveraging AI solutions in their practices, but over half of respondents (52%) are not currently using the technology for any purpose. However, the majority of respondents (80%) reported that they believe they will use the technology more in the future.

Among those currently using AI solutions, the most common applications being used are:

• Writing (emails, content, etc.) (34%)
• Accounting work (14%)
• Reporting and analysis (12%)
• Document analysis (12%)
• Data entry (12%)
• Task creation (7%)
• Other (8%)

Automation

The survey also asked its participants about the impact of automation on workforce dynamics.

The results showed that firm owners anticipate a significant wave of retirements, with 20% of respondents expecting 51% or more of their CPAs to retire within the next three years. 57% of respondents expect more work to be automated in the next five years.

Despite the rise of automation solutions, most firm owners reported they do not plan to replace human accountants with them. In fact, 67% of firms plan to hire new employees.

Cybersecurity

The results of the survey showed that cybersecurity remains a top priority for firm owners. 99% of respondents said they consider online security to be important and strive to protect sensitive client information.

15% of respondents also said they had experienced security breaches. The most common causes of breaches were:

• Clicking the wrong link (26%)
• Ransomware (26%)
• Service provider issues (9%)
• Cloud server hacks (9%)
• Computer and data theft (9%)

Client relationships

The survey’s results demonstrated the growing importance of client relationships in the accounting industry. Despite that, there was a wide variance between half of those who responded to the study in terms of how often they communicate with clients.

Accounting firm representatives who participated in the study reported that, in a typical month, they spend the following amounts of time interacting with clients:

• One or two days (49%)
• Three to seven days (36%)
• Two to three weeks (10%)
• Four weeks or more (6%)

This may also demonstrate the diversity of client needs depending on industry, company size, and other factors.

Despite over half of respondents saying they talk to their clients anywhere from three days to four weeks per month, over half of them (51%) said they don’t even spend time with clients typically. The next-most common response (30%) was “I don’t spend enough time with clients,” followed by “I spend too much time with clients” (18%).

The future of accounting

The survey results make it clear that technology will play an even greater role in the accounting, bookkeeping, and CAS fields in the future. It also revealed surprising insights about client interaction, hiring trends, and more.

You can read the full report here.