Every year brings the accounting industry new tools, tech buzzwords and promises of transformation. How do firms separate the noise from what truly delivers value?
Technology certainly has the potential to change the way accountants work for the better, but it can be difficult to know which trends are worth the investment of time, effort and budget, and which will fade away.
In this wrap-up of 2024 and look ahead to 2025, we explore what’s exciting accountants, what concerns them, and how they’re using capabilities like AI to drive their next chapter of growth. Most importantly, we’ll also touch on what your firm should consider to stay competitive in the year ahead.
Over 75% of firms have invested more in technology this year
According to the UK Accountancy Sector Outlook Report by HSBC UK and Accountancy Age, over 75% of firms have increased their technology spending year-on-year, reflecting the industry’s growing willingness to invest in digital tools.
However, 15% of firms acknowledge difficulties in adapting to technological advancements, suggesting that while most are keen to innovate, some still face challenges in keeping up.
Firms are actively exploring AI, with over 30% already integrating it into their operations and a further 23% planning to adopt it in 2025. This growing interest in AI reflects its potential to improve processes and support growth.
Technology adoption is not a one-size-fits-all journey
The report highlights an important point: technology adoption looks different for every firm. While the entire industry recognises the importance of digital transformation, it seems as if priorities and strategies differ significantly based on firm size and resources.
- Large firms are scaling and optimising
Bigger firms are leading the charge in technology adoption, with 37.5% significantly increasing their tech investments. Their focus has shifted from adopting new tools to optimising existing systems to maximise value and efficiency. - Mid-sized firms are focused on balanced growth
Among mid-sized firms, 58.3% report somewhat increased spending on technology, reflecting a steady and measured approach. These firms often aim to scale their operations without overextending resources, focusing on incremental improvements to existing systems. - Smaller firms are in a catch-up phase
These firms seem to be focusing on foundational investments like cloud computing and process automation. While they may lack the budgets of larger firms, their investments are driven by the need to remain competitive in a rapidly evolving market. These firms often prioritise solutions that deliver immediate efficiency gains without significant risk.
39% of firms are using full-suite solutions
The results of a recent LinkedIn survey run by Phil Hobden, Silverfin’s Head of Sales, provide valuable insights into the technologies currently being used by accounting practices.
The findings show that the majority (39%) of respondents are using full-suite software solutions such as Iris, CCH and Digita. These tools, known for their comprehensive features, enable firms to handle multiple aspects of accounting efficiently within a single platform.
Interestingly, 21% of participants reported using specialist software like Caseware and Alphatax, suggesting that many firms are seeking tailored tools to meet specific needs.
Similarly,18% have transitioned to 100% cloud-based platforms, like Silverfin, highlighting the ongoing shift towards cloud technology for its flexibility and real-time collaboration capabilities.
The power of cloud computing is evolving
Cloud-based accounting software is playing an increasingly important role, making financial data accessible from anywhere and enabling teams to collaborate in real time. This flexibility helps firms manage tasks more efficiently and reduces the risk of errors by automating manual processes.
Beyond these practical benefits, cloud-based software can connect with other tools to create systems that simplify workflows and improve accuracy. For instance, firms can link cloud accounting platforms with tools for analytics, payroll or client management.
Recent investments, such as KPMG’s $100 million partnership with Google Cloud, demonstrate the rising demand for cloud infrastructure. Over the past two years, bookings for KPMG’s services related to Google Cloud have increased tenfold.
“We believe that professional services is going through the largest transformation that it will likely ever go through.”
Steve Chase, vice chair of AI and innovation for KPMG
Cloud technology and AI are closely linked, as cloud platforms provide the scalable computing power and data storage required to run AI applications effectively. By hosting AI tools on the cloud, firms can process large volumes of data quickly, access advanced analytics, and deploy solutions that adapt to changing needs without investing heavily in on-premises hardware. For instance, AI-driven applications often rely on the cloud to handle complex calculations and store real-time data securely.
AI is being harnessed for the next chapter of growth
In recent years, AI has rapidly gained traction, evolving from a niche technology into a mainstream trend. Its impact on every industry is undeniable and it has the potential to significantly boost the global economy. PwC estimates AI could add $15.7 trillion by 2030, with $6.6 trillion coming from productivity improvements as businesses automate tasks and enhance efficiency.
In the UK, AI is expected to contribute £2 billion to GDP, with firms adopting it likely to see revenue grow three times faster than those that don’t. In accounting, AI is improving accuracy, streamlining processes, and helping firms adapt to new challenges, with 61% of accountants seeing it as more of an opportunity than a risk. However, not everyone is fully convinced.
Some accountants are voicing concerns about AI
While AI offers exciting possibilities for the accounting profession, it’s not without its challenges. According to a Karbon’s State of AI in Accounting study, many accountants worry about the potential downsides of automation. For instance, 56% are concerned that AI could undermine the “human touch” in client relationships, making interactions feel less personal and more transactional.
Data security also looms large as a concern, with 76% of respondents identifying it as a key issue. Ethical considerations, such as bias in AI systems and the transparency of AI-driven decisions, trouble nearly half (49%) of accountants surveyed. These worries reflect broader anxieties about how AI will be integrated into professional settings without compromising fairness and accountability.
It’s worth noting that AI is far from a replacement for the expertise that accountants bring to their work. Strategic thinking, client understanding and ethical judgment remain areas where human professionals excel. Instead, AI serves as a tool to handle repetitive tasks, freeing up time for accountants to strengthen client relationships and add greater value to their firms.
The road ahead will involve finding a balance – harnessing AI to drive innovation while preserving the trust, personal connections and ethical foundations that define the profession.
What’s next?
The future of AI in accounting looks bright, with advancements expected to help firms navigate new regulations and deliver more specialised tools for tasks like tax calculations and financial reporting. Emerging technologies such as quantum computing could amplify these benefits, making processes even faster and more efficient. By adopting AI responsibly and addressing its ethical considerations, firms can remain competitive while supporting their teams and clients.
Blockchain technology is another field to watch, with its potential to transform auditing and assurance by automating processes with smart contracts and enhancing transparency. Its decentralised design could be used to reduce the risk of fraud and build trust in financial transactions. This is certainly a new frontier for accounting firms to explore in the years to come!
As we look ahead to 2025 and beyond, Silverfin is here to help you discover and embrace new possibilities in accounting.
