Accounting is integral to the systematic organisation and success of companies of all sizes and new innovations promise to help today’s accounting firms grow into the future.
Accounting technology is best described as any system, process, or advanced tool that allows a business to improve the efficiency or accuracy of accounting, while simultaneously adding value to the bottom line.
New technology is ever evolving, and it has the power to transform how an accounting firm operates, services their existing clients and attract new clients.
Below, we explore the top 7 technology trends that are driving change in accounting firms today.
1. Cloud-based accounting
No other advance in technology has had as big of an impact on accounting in the 21st century as the cloud. Today, almost 100 percent of accounting firms and major businesses are utilizing cloud-based accounting – and for good reason!
Cloud applications are able to handle everything from invoicing and payroll to benefits and taxes. And as robust as these systems are, they also offer user-friendly dashboards and intuitive interfaces that make it easy for businesses to see what’s happening at any given point in time.Automation is the biggest benefit of cloud-based accounting.
Sophisticated algorithms and machine learning easily handle tasks that previously required hours of manpower to complete. This frees up staff to focus on tasks that require personal touch.
2. Artificial intelligence
Speaking of automation, AI is changing the game. Many of the labor-intensive tasks that accounting firms have previously relied upon – such as payroll, audits, and tax preparation – can be fully streamlined.
AI won’t completely replace humans now or ever. Human intelligence will always be a valuable asset, regardless of how smart computers become. Rather than make accountants obsolete, AI solutions will give accountants access to better information.
3. Real time reporting
As AI has continued to improve, the accounting world has gotten a taste of the value of real time reporting and how it changes the ways in which accounting firms manage and interact with their clients.
Over the past few decades, the delay between when an accounting event occurs and when it’s recorded has significantly diminished. It used to be that businesses were days behind – meaning the reports they had in their hands were only accurate as of a few days ago. Then it become hours. And then it became minutes.
However, today’s most robust accounting technologies actually offer real time reporting. That means every accounting transaction is inputted, recorded, and reported at the same time.
In terms of the relationship between accounting firms and their clients, real time reporting helps establish trust and reduce confusion. It enables both parties to see the same information at the same time.
4. Optical character recognition
One of the primary focal points of accounting innovation over the last decade and a half has been the integration of various tools and systems so that they’re able to seamlessly and effortlessly communicate with one another. Further enhancing these integrative capabilities is a technology known as optical character recognition (OCR).
Advances in this technology allow companies to use scanners or even the cameras on mobile devices to capture printed financial information such as receipts and invoices and translate the text into digital files.
While OCR has become a staple in the industry, there’s still a need to proofread and double-check scanned copies for errors. As these systems become more accurate and proven, OCR will only continue to add value to accounting firms and their clients.
5. Remote accounting
It used to be that accountants were metaphorically chained to their desks – unable to leave their computers during normal work hours. And if they did leave their desks, they were unable to record information or provide clients with the access they needed. Thanks to remote accounting, this is no longer the case.
Remote accounting solutions gives accounting firms the type of ubiquitous connectivity that people could only have dreamt of in decades past. Firms can reconcile accounts, add receipts, send invoices, or create expensive claims all from a smartphone, tablet, or laptop. As an added benefit, this allows accounting firms to hire employees in different areas of the country/world and manage remote teams with greater efficiency than ever before.
If the cloud has been the most transformational accounting technology of the 21st century thus far, blockchain will be the most important over the next 20 years.
Blockchain is a single-ledger technology that lets users from a variety of sources access the same information in real time. This enables business leaders, investors, and clients to all see the same information simultaneously and without delay.
7. Social media
While it’s not considered an accounting-specific technology, social media – as a suite of tools – yields tangible value for accounting firms that are looking to grow.
Social media platforms – like Facebook, Twitter, and LinkedIn – have given firms the ability to build online brands and reach prospective clients with greater ease than ever before. It also provides additional access points for firms to engage their current clients and continually add value.
Social media should be viewed as part of a firm’s larger business development strategy. It’s not the only option for growth, but it plays a significant role in reaching the right people at the right time.
While there is no doubt that technology has and will continue to transform how accounting firms operate, it can require ongoing implementation time, staff training and additional cost.
One strategy that allows you to leverage the benefits of the newest technology without the burden of implementation and cost is outsourced accounting. Outsourced accountants have a vested interest in keeping up with the latest in accounting technology to better serve their clients – benefits that can be passed onto your own clients.
Whatever your views on technology, there is no doubt that it is here to stay and accounting firms that embrace it can better serve their clients, give their practice a competitive advantage and support their firm’s growth.
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