Happy new (financial) year! Cue the fireworks. 

Now that we’ve moved on from last year and completed our tax write-offs (hopefully you didn’t put that off until the last minute), it’s time to face this year’s challenges. You may be raring to go, but take a second to review your plan of action. Have you done your due diligence in terms of figuring out what the financial landscape looks like this year? 

Ask yourself: Have I taken accounting trends and how these trends will affect the decisions I make as the leader of my practice into consideration?

If not, it’s not too late. 

When you have an idea of what might happen in the next financial year or what the accounting world is focusing on, you can steer your practice to go places that can supercharge your success. Ignoring these trends may cost you opportunities to get ahead of your competition or even slow your growth altogether. 

When you identify shifts and respond to them accordingly, you allow your practice the growth you want for it and you’re able to perform optimally without the stress. Your accounting practice will benefit from thoughtful plans for the start of the financial year that engage with what’s big in the accounting world and want to make the most of them. 

Accounting trends to consider this new financial year

Accounting practices need to embrace the cultural shifts happening now and in the near future. The practice is becoming more technologically dominated and fast-paced because of rising client demands and how we’ve been able to create the tech possible to adapt to those demands. Some of these changes have been easy to project–here are just a few of them. 

1. Artificial Intelligence and automation

Artificial intelligence (AI) has moved beyond just a few awe-inspiring responses via machine learning. Bots and autoresponders are everywhere now, and we interact with them more than we think. 

It’s no wonder that artificial intelligence is slowly taking over repetitive processes, expediting turnaround times and maximising efficiency for accounting firms and businesses. By optimising workflow through fewer errors and more insights based on information they can process, AI gives you the opportunity to make quicker, more informed decisions and get things done faster. 

Around 20% of accountants said they’re currently investing in AI, while another 20% said they’d start to adopt it in the near future. They believe that AI will shape the future of the industry and that they’ll be staples within the next few years. 

While AI continues to be on the rise, it’s important to still remember that the human element is still necessary for your practice as AI can’t always address everything. There are some multi-layered issues that only people can solve because an AI can’t figure out how each problem leads to the next. That, and it’s important to acknowledge that the human element is what fosters meaningful relationships within your practice in the first place. 

2. Cryptocurrency changes

Since its inception in 2009, cryptocurrency has flourished because of how decentralised it is. Its independence from regulatory bodies gives people who are unbanked or underbanked the opportunity to invest and grow their wealth in a more inclusive digital market. 

However, some have begun to worry because of how little protection and security cryptocurrency has, thinking that some regulation may be good for it. Most crypto investors are still currently against it, while bigger institutions–like some banks and even governments–are slowly considering it. 

Some countries have even started to adopt cryptocurrency as legal tender. El Salvador was the first (with a few others attempting to follow in their footsteps), allowing El Salvadorans to pay for private transactions and tax payments via crypto. Other nations are observing how this is working out and are contemplating crypto regulation as well. 

Crypto expertise is something other practices and organisations are looking for because of how sought after they are now. They’re universally seen as a lucrative investment, and embracing their marketability is a smart move to stay relevant. 

Non Fungible Tokens (NFTs) have also risen in popularity in recent years. Even if they’ve been around since 2014, they’ve only just entered mainstream consciousness and have taken the world by storm. There’s tons of potential with NFTs because of how they become exponentially more in-demand.

3. Cloud-based accounting

The internet has revolutionised how we store, share and access information. Firms are saying goodbye to cumbersome on-site computers and servers and are embracing cloud-based accounting (think more accounting-conducive versions of Dropbox, Google Drive etc.) because of its accessibility and convenience. As long as you have the security or log in details necessary, you can retrieve data even on your own personal devices. 

Cloud-based software also maximises efficiency as it updates in real-time, leading to more streamlined processes and fewer errors. You no longer have to drive through rush hour traffic to sit at a computer still trying to download clunky updates. All you have to do is go through your practice’s security precautions online and you’ll be able to pull all the information you need.

You also eliminate the need to purchase servers and other hardware, as well as the maintenance necessary to keep them running and up-to-date. 

Your 2023 financial to-do list

With the financial year just starting, you need to keep these five things top of mind to make the best of it. 

1. Review the previous year’s financial performance

Reducing ongoing costs will be much easier if you have something to compare. A point of reference will help you figure out which continuing expenditures can be modified or omitted altogether.  

Look at your statements from last year. Where did you spend the most money? Can you rework that expense or do you need to still spend the same amount this year? 

Comb through your receipts as well and find subscriptions or other regular payments and see if they’re still necessary. Maybe you’re paying for a database you don’t really need anymore or a subscription to an online tool that’s now defunct. Identifying what can go will help you save money down the line. 

2. Forecast your cash flow this year

A new year is often treated as a clean slate and a good time to reset your goals. It’s smart to commit to better decisions around your money during this time and, by forecasting your cash flow and putting together a comprehensive budget, you can keep your finances healthy. 

To help you stay on track with your spending habits, take note of what you definitely need to spend on and what you possibly have to spend on. Ease the pressure off yourself by separating these predictions into quarters so you can adjust as the year passes. Having three-month breakdowns will feel less stressful compared to having to map out the entire year from the get-go. 

3. Set up a tax obligation organisation system 

When it comes to the end of the financial year, I’m sure we’re all too familiar with scrambling to find every receipt we can for tax reviews (guilty as charged!). It can be stressful to leave that to the very end of the year, scrounging up past expenses to see what you can convert into tax obligations, so a simple system will help you sort that out without all the anxiety.

Put away all your invoices in systematised folders within your email as you receive them. It’s as simple as just sorting them with just a few clicks, making it easier to keep things up-to-date. You also avoid missing any receipts or overlooking any invoices because you’re sorting as you get them in real-time. 

4. Update your technology

Outdated technology can hamper your progress as they’re slow and often obsolete in the face of continuously advancing tech outside of your practice. Your competitors can easily get ahead of you if you stay stuck on the same databases or software you’ve had for five years. Technology that’s up-to-date and optimised for business growth will help you stay on top of things.

Updated tech will accelerate processes and help you solve problems faster, making everything more cost-efficient. You won’t need to spend as much time uploading, downloading or waiting for transfers, saving you a lot of money and energy as well. Turnaround will be quicker, making your practice more reliable.

5. Establish a monthly or quarterly money review setup

By figuring out when and how you want to revisit your financial structure, you set the pace for your practice’s expenses. 

Revisiting your financial forecasts and budget monthly or even quarterly will help you make adjustments in case of shortages or unforeseen circumstances. Without regularly checking in and diagnosing your firm’s finances, you run the risk of overspending. 

Checking on your expenses, what you do and don’t need and what you need to reallocate will help you get a better estimate of your finances as you progress.

The new financial year is sure to bring new challenges and excitement–be prepared for them by anticipating these accounting trends and gearing up for how they’ll impact the industry accordingly.  Your practice will only be all the better for it, especially because you’re responding to what’s going on around you, adapting to external pressures by changing internal processes to meet changing needs. 

If you want to learn more about what you need to look out for this financial year to optimise your firm and set it up for success, give us a call.