The Future of Accounting: Embracing Intelligent Technology
Technology Trends Transforming the Accounting Industry
The accounting industry is continuously evolving and adapting to new technologies, and businesses and professionals who embrace these advancements are better positioned to face the changing economic landscape. With the increasing use of cloud computing, big data, online collaboration, and other innovative technologies, the future of accounting is becoming more intelligent. In this article, we will explore the technology trends that are impacting the future of accounting.
Cloud Computing
A significant shift is taking place in the accounting industry, with many companies moving from on-premises enterprise resource planning (ERP) to cloud computing. This transition is providing a clean slate for companies to optimize their processes and build transformative finance processes. Cloud accounting software is especially crucial for supporting remote accounting teams, providing them with secure access to real-time data, regardless of their location. The benefits of cloud computing and cloud becoming the future of accounting have become even more apparent during the pandemic, as companies that relied on this technology were better equipped to adapt to remote work.
Mobile Accounting
As millennials continue to take on leadership roles in the workforce, they bring with them the expectation for consumer-grade technology to be integrated into businesses. This trend is being met with enabling technologies like 5G, making it possible for business processes to take place on mobile devices. This includes accounting processes, such as reconciling business transactions, invoicing clients, receiving alerts on pending approvals and taking payments from clients on the go. Mobile accounting also means creating mobile-responsive reports for management to view on the go.
Machine Learning and RPA as the Future of Accounting
Adoption of machine learning is growing rapidly in the accounting industry. This technology is mature, low cost, and can quickly return benefits by reducing errors, manual effort, and processing time, as well as accelerating the auditing process and eliminating time-consuming tasks. Machine learning algorithms automate workflows, reducing human error and increasing output. Many companies are using machine learning for reconciliation processes, such as automatically downloading bank data and reconciling accounts, which is faster, more accurate, and more efficient than performing the same process manually. Machine learning and RPA (robotic process automation) are becoming more prevalent in large enterprises.
Is Accounting a Dying Career?
With the move toward machine learning, some may wonder if accounting is a dying career. However, the reality is that the industry is simply changing. To take advantage of the outputs generated by machine learning, additional training and education in digital skills is required. To ensure the success of accounting professionals in small or large businesses, it is important to incorporate training into business plans.
Big Data & AI Impacting the Future of Accounting
Big Data and AI are revolutionizing finance and accounting practices. With the rise of big data, the analysis of large amounts of structured and unstructured data has become increasingly prevalent in finance. Automation and technological advancements have shifted the way finance departments approach data-driven decision making, leading to an increased focus on big data projects. As stewards of big data, finance teams are responsible for ensuring proper data governance and utilizing data to inform and enhance organizational risk management. Predictive analysis is becoming a key tool for finance teams to uncover revenue trends, predict shifts in consumer behavior, and detect fraud. The successful adoption of big data provides a strong foundation for the growth of AI in accounting departments, as finance teams look to further improve their data-driven decision making.
Blockchain Technology and Accounting
Blockchain technology is improving the efficiency and safety of transactions and helping them happen at faster speeds. It provides a digital, global, distributed ledger for exchanging assets without intermediaries. The potential of blockchain applications is vast, transforming processes such as procure to pay, record to report, and order to cash. Accounting departments are playing a crucial role in guiding the use of blockchain with practical use cases. Blockchain has a significant impact on auditing, as it becomes possible to audit 100% of transactions by combining blockchain with AI.
Cybersecurity
With remote work becoming the norm, accounting and finance processes are increasingly vulnerable to online attacks. The rise in finance team remote work has only added to the complexity of cybersecurity, with a 54% increase in invoice and payment fraud from spoofing reported from Q2 to Q3 2020. While all industries are at risk, retail, consumer goods, and manufacturing are among the most targeted. Some of the main threats to look out for include phishing attacks through email, phone, or SMS, malware, and data leakage.
Collaborating in the Cloud
Remote work has posed a significant challenge for accountants and the future of accounting, particularly when it comes to collaboration. With traditional office-based practices like late nights at the office to close the books for the month no longer feasible, cloud-based accounting software has become a critical tool for finance teams. The software provides real-time access to accurate financial information for all team members and supports asynchronous work. In response to this new reality, accounting software vendors are working to enhance collaboration tools within their platforms, such as secure real-time chat, to support finance team workflows.
Making Wise Technology Investments
When investing in technology, it’s crucial to consider the potential return on investment and the value each technology can bring to your business. Finance leaders are well-positioned to contribute to the decision-making process and determine where resources should be allocated for maximum impact. Despite the challenges facing finance teams in a rapidly changing business environment, there are also ample opportunities to leverage innovative technology, such as financial management software, to drive process efficiencies, transform processes, and ultimately create business value.
