The accounting industry has evolved at pace over the last few years, and this looks set to continue throughout 2025 and beyond, with emerging technologies, regulatory shifts and the changing needs of businesses driving real transformation.
We take a closer look at some of the main trends and challenges that accountancy firms are likely to expect this year and give our top tips for making the most of the opportunities that they present.
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With HMRC’s continued drive for Making Tax Digital (MTD), many businesses have already made the jump to digital submissions. This is likely to see further expansion this year as sole traders can now submit through MTD voluntarily from April 2025, before it becomes compulsory for those with an annual income of at least £50,000 in 2026.
For some businesses, especially those that have run on traditional accountancy systems for a long time, the transition doesn’t always feel smooth, so accountants have a great role to play in supporting clients through this change.
Along with digital tax submissions, using a cloud-based accountancy system enables businesses and their accountants to access real-time financial data from anywhere, at any time.
With benefits like these, it’s no wonder that continued digitalisation of accountancy is likely to grow throughout 2025.
It doesn’t feel too long ago that AI was just a concept rather than a tangible ‘thing’, but it’s true to say that the AI revolution is now really starting to transform accountancy.
Many of the cloud-based accountancy tools now have AI and automation technology built into standard functions, and it's something that is already helping to automate routine tasks, cut down on human errors and even spot useful insights through data analysis.
Some ways that AI and automation are already having an impact on accountancy include:
Automating reconciliations – with some cloud accountancy platforms able to match transactions automatically to save users time when logging them, while also reducing the chances of errors compared to inputting the data manually.
Spotting errors or potential fraud – with AI algorithms able to spot unusual activity or changes to patterns in financial data, which could signify an error or even fraud.
Spotting useful insights – with AI dashboards able to instantly visualise and summarise data, giving accountants and their clients a quick snapshot of important metrics such as cash flow and profitability.
AI technology is constantly evolving, with more capabilities and applications for financial and business data emerging regularly. Alongside expert human accountancy input to provide the elements that AI cannot, this is a partnership that looks likely to continue to grow at pace this year and beyond.
The traditional role of accountants being limited to purely providing data and handling tax returns is well and truly over. Clients are increasingly seeking strategic business advice from their accountants, whether that’s in relation to digital transformation, business recovery, growth plans or other aspects. This gives accountancy firms great revenue growth potential, by expanding their service proposition, but also presents challenges in managing capacity and in recruiting and retaining the best talent to deliver these value-added services.
Along with the trends and developments happening in the accountancy sector, it’s important to also look at common challenges that are likely to crop up in the year ahead and make a plan to overcome them. Some of these challenges already being felt by accountancy firms include:
Anyone working in an accountancy firm will know that recruiting and retaining experienced, high-quality accountants has become more and more difficult in recent years. We’re predicting this continuing throughout 2025 and beyond. Our Accounting Talent Index shows that almost half of accountancy firms (45%) are affected by skills shortages.
The demand for reliable, highly qualified accountants continues to grow, due in part to factors like:
Yet there are fewer accountants available to meet this demand.
One solution is for accountancy firms to look into outsourcing accounting functions for their clients to a trusted partner. Utilising this kind of opportunity frees up time and resources for the accountancy firm to take on more new business while their service quality and reputation are upheld. Find out more about how to outsource finance functions.
With more sensitive financial data now being stored and managed in the cloud, cybersecurity is a significant concern for many accountancy firms. If client data is compromised and ends up in the wrong hands, this can cause some major problems for the business in question, as well as breaking trust, damaging the accountant’s reputation and potentially having legal consequences too.
Having a robust security policy and protocols in place can help keep data safe. Meeting data security standards is a minimum requirement but it’s possible to exceed this and go the extra mile to help keep financial records and information out of the wrong hands online.
When working with clients and partners, such as an outsourced accountant solution, ensuring that they have high levels of security in place is essential, bringing peace of mind for you and your clients that important data is protected.
With many current trends, opportunities and challenges for accountancy firms, the growth limitations or blockers that you will come up against can be overcome through the effective outsourcing of some of your client’s accounting functions to a trusted partner.
At Advancetrack, our teams have all of the accounting experience needed to deliver a seamless top-level service to your clients, which frees up your time and resources to take advantage of the many opportunities for growth and expanding your services. You get all of the benefits of additional staff members to expand your team, but not the overheads. You can also scale outsourced accounting when needed, so seasonal fluctuations and other changes in demand can be accommodated easily.
Find out more about Advancetrack’s plans for 2025.
Book a call with us to find out how we can help your accountancy firm in 2025 and beyond.
