Accounting and finance teams have their work cut out for them in 2023. With rapidly changing tax policies, regulatory changes, ESG requirements, and accounting standards update - businesses need to be proactive in understanding and implementing these changes.
In this article, we'll discuss 8 key trends in the world of accounting that you should pay attention to in 2023.
1. Tax Policy:
Over 6,000 pages of the new legislation were included in the 2022 Consolidated Appropriations Act - commonly referred to as the COVID stimulus package. This is just one example of how quickly tax policy can change from year to year, affecting your total tax liability and necessitating changes in your company's practices related to taxation.
2. Statutory & Regulatory Changes:
With the changing of administrations, it is likely that new regulations and federal policies will emerge. Changes in leadership at the SEC are expected to impact financial reporting requirements and scrutiny.
3. Environmental, Social & Corporate Governance (ESG):
ESG will be a major focus for companies - with new federal regulations pertaining to areas such as climate-related financial risks, greenhouse gas emissions, diversity, and more. Professional trade organizations can help prepare accountants for these changes.
4. Accounting Standards Updates:
Throughout 2023, the Financial Accounting Standards Board (FASB) will issue updates on changes that could affect financial statements and how to keep them GAAP compliant. These updates may include asset acquisitions, credit losses, debt securities, leases, reorganizations, variable interest entities, and banking regulation disclosures.
5. Proactive Accounting:
Machine learning and RPA are being used to reframe the approach to accounting. The concept of continuous accounting uses automation and other technology to embed tasks that are normally done at a period's end into day-to-day activities. This helps improve efficiency, data integrity, and can free up time for your accounting team.
6. Outsourcing:
Organizations of all sizes may find benefit in outsourcing some or all of their finance and accounting functions - either to save money or gain access to skillsets and technologies they wouldn't have with their own infrastructure.
7. Accounting Software:
In order for RPA to be a success, transactional data must first undergo standardization and merge from various sources in different formats- known as harmonizing. This may involve unifying structured, semi-structured, and even unstructured data into one system. AI requires an abundant amount of information for it to bring about effective results. Ultimately though, accountants need the assurance that outputs generated by all enabling technologies are reliable.
Accounting software is an essential part of any successful business. In fact, 36% of companies are anticipating the implementation of cloud-based accounting solutions in the near future. Enterprise resource planning systems can bring these applications together with other necessary areas such as supply chain management and order production to create a data consolidation platform that will give you more control over your finances and decision-making process. With ERP, it's easier than ever for businesses to gain insight into all aspects of their operations!
8. The Use Of AI In Accounting:
In almost all industries, it is understood that AI and RPA will have a noteworthy effect on finance and accounting. Companies are leveraging these technologies to automate mundane tasks, allowing accountants to focus their skill set on higher-value pursuits with greater impact.
Accounting firm EY has tailored Artificial Intelligence to conduct assessments of leasing contracts, allowing finance professionals to collect critical data rapidly such as the start date, total payment, or expiration options. This empowers them to spend more time making decisions with their findings instead of searching for them.
The Bottom Line
Accounting and finance teams need to stay up-to-date on the latest trends, regulations, and technologies in order to remain compliant and competitive. With the right information and tools, accountants can take their businesses further in 2023.
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