By Nield Montgomery.
In a 2025 survey of fund accountants—a group responsible for managing complex investment structures, capital calls, waterfall distributions, and regulatory compliance for private equity and venture capital—the sentiments reported around challenges and trends seem poised to influence practices across the accounting profession.
Accounting in private equity and venture capital fund appears to be on the cusp of a technological transformation, as survey respondents anticipate a significant impact from automation, AI, and integrated software solutions in 2025. As this group searches for ways to manage the growing complexity and scope of their work, the solutions they find may light a path for others toward efficiency-driven accounting. Here’s where the research is pointing.
The Shift Toward Automation and AI
Seven in ten fund accountants surveyed identified the adoption of automation and AI as the most pressing industry trend for 2025. Notably, 61% agreed that these technologies will play a major role in fund accounting, while another 34% acknowledged their growing influence but stopped short of calling them revolutionary.
Despite the enthusiasm for automation, a percentage of respondents—though small—remain skeptical. Five percent predict little to no reliance on AI in the next year. This skepticism underscores the challenges that accounting firms face in implementing technology, including integration hurdles, data security concerns, and the unmet need for industry-wide trust in AI-driven decision-making.
Ultimately, the prevailing theme in the road ahead will be the search for balance. Fund accountants are eager to explore the territory of how AI and automation can streamline operations, but remain acutely aware that human expertise is needed for complex decision-making. In the accounting profession, interpreting nuanced financial data, exercising judgment in complicated scenarios, and ensuring regulatory alignment are all examples of where that human oversight remains indispensable. The focus of the near future will be to calibrate the right mix of technology to reduce manual workloads without diminishing the strategic oversight and critical thinking that define the profession.
Persistent Challenges May Reach an Inflection Point
The survey identified four key pain points for which most in accounting are all too familiar.
- Manual data processes: 62% of respondents cited manual data entry and reconciliation as a major challenge, leading to inefficiencies and errors.
- Time-consuming reporting: 64% of professionals reported delays in preparing financial reports.
- Lack of integration: 56% of respondents pointed to inadequate system interoperability.
- Regulatory complexity: 68% found keeping up with compliance updates to be disruptive.
For years, these pain points have been persistent roadblocks, largely due to the industry’s reliance on legacy systems and entrenched methods of work. The use of Excel and manual data entry remain widespread despite the availability of automation tools, because many firms have been hesitant to overhaul existing processes.
As follows, generating reports remains a long-standing and dreaded chore. Fragmented data sources force accountants spend more time gathering, verifying, and formatting information rather than analyzing it. Integration challenges only further exacerbate these inefficiencies, as disconnected systems require workarounds that slow operations further and increase the odds of mistakes. Meanwhile, it stands to reason that regulatory complexity will only continue to grow.
However, 2025 may mark a long-awaited inflection point. The rapid maturation of technology offers opportunity to tackle these challenges that is unprecedented. Previous advancements offered incremental improvements, but AI and automation have the potential to fundamentally shift how accountants operate.
Systems Integration and Data Flow: The Next Priority
The survey data painted a clear picture of an industry struggling with fragmented data and software that doesn’t communicate effectively. Data flow and system integration are an area of priority for fund accountants; sixty percent of respondents highlighted enhanced reporting and analytics as a key trend, while 70% emphasized the necessity of software integration for efficient workflows. Lack of integration was cited as a significant challenge by 56% of respondents, with nearly 60% stating that interoperability with other platforms is a key missing feature in their current software.
Emerging technologies like AI and automation are capturing headlines, but one of the most impactful agents for transformation lies in optimizing data flow and systems integration. Accountants are increasingly recognizing that fragmented data and disparate software platforms not only stand in the way of efficiency, but their limit analytical capabilities and ultimate ability to provide strategic value.
ESG Reporting Among Factors Driving Configurability Preferences
As businesses face growing calls to understand their environmental and social impacts, accounting is playing a growing role in implementing ESG (Environmental, Social, and Governance) reporting. It remains a hotly debated issue with few areas of consensus—aside from the seemingly universal agreement around the challenges posed by the lack of industry-wide standards. As such, it comes as no surprise that survey responses among fund accountants were split about the impact of changes in ESG reporting requirements.
About half (49%) of respondents are anticipating significant changes in 2025, while 45% expect minimal to no impact. In fund accounting in particular, the variability in ESG reporting standards has created a great deal of uncertainty as firms struggle to navigate investor-specific requirements and evolving regulations.
ESG reporting is among several factors that are likely driving preferences toward customizable technology. A majority of survey respondents (66%), participants expressed a preference for configurable software over standardized, out-of-the-box solutions. In a financial environment marked by regulatory and compliance changes, a drive for business growth, and growing stacks of technology systems, configurable software looks to be a tool accountants will use to help organizations stay agile, efficient, and compliant in an increasingly complex environment.
An Industry at a Crossroads
In the coming year, the accounting profession appears poised to tackle long-standing industry challenges by embracing technological shifts that redefine workflows, efficiency, and strategic decision-making. The momentum behind automation, AI, and advanced data integration suggests that firms can no longer afford to rely on traditional, manual processes if they wish to remain competitive.
While challenges still remain in technology adoption, integration, and trust, those who successfully adapt will be well-positioned to thrive. Accountants that successfully strike the right balance between automation and human expertise will not only improve accuracy and efficiency but also elevate their role as strategic advisors in an increasingly complex and data-driven landscape.
Nield Montgomery is managing director at Dynamo Software. Dynamo’s 2025 fund accounting research report is available at dynamosoftware.com.
Thanks for reading CPA Practice Advisor!
Subscribe Already registered? Log In
Need more information? Read the FAQs
Tags: Accounting, fund accounting, Technology
