We have seen the era where accounting was done on type writers and each time a mistake was made, a whitener was carefully used. If you told me even 10 years ago that statements could get auto-populated into an accounting software and entries are suggested automatically – I probably would have laughed it off. But today, that is the reality – and is only the tip of the iceberg!
The fintech and accounting industries have gone through many changes in the last few years, mainly because of the advancement in technology, primarily the use of artificial intelligence. More than 90% of accounting firms state that technology improves their capacity to concentrate on clients and increase efficiency. Not surprisingly, 90% of the small accounting firms and 94% of the large firms deliberately use technology to manage their tax season and the results.
When we talk about ‘Technology and Accounting’, the word automation cannot be overlooked. Gartner has reported that by implementing automation technologies, the finance teams can reduce their additional weekly workload of 25000 hours caused by human error, which will be equal to $878000.
The Significance of Automation in Modern Accounting
The relevance of automation in the accounting industry is evident by the fact that about 87% of accounting specialists recognise the contribution of these technologies in increasing efficiency and profitability. Automation also benefits accountants by enabling them to work more efficiently and, more importantly, spend more time on what will help the client and drive value. There is a need to select automation tools that fit the business needs rather than selecting a tool that solves all the problems.
In this case, automation is not just improving the productivity of the accountants but is actually redesigning the field. With the help of repetitive and manual tasks, accountants can now concentrate on the selection of financial data, which helps them transcend the traditional bookkeeping profession. This shift improves the key areas of risk management, cash flow forecasting, and data analysis.
AI and Its Impact on Accounting
AI-powered accounting tools play a pivotal role in this transformation. They assist with analytics, flux, data integrity checks, and technical accounting research, significantly improving financial reporting processes. Automation tools can handle vast amounts of data accurately and swiftly, reducing the need for manual data entry and minimising errors. The primary benefits of automation in accounting include:
=Time Savings: Automation significantly reduces the need for continuous data entry checks, freeing up valuable time for more strategic tasks. This not only enhances efficiency but also provides a much-needed relief from the burden of repetitive tasks, opening up avenues for professional growth and development.
=Increased Productivity: By handling menial tasks, automation allows accountants to focus on improving their clients’ financial health.
=Improved Accuracy: Automation tools are designed to minimise human error, ensuring accurate ledger entries. This not only boosts confidence in the work being done but also enhances the overall reliability of the accounting process.
=Quick Data Retrieval: Automation enables quick data access, eliminating the need to search through physical storage.
=Cloud Technology: Modern accountants can now access documents and process payments from anywhere, thanks to cloud technology. This not only improves flexibility and collaboration but also enhances data security, as cloud service providers often have robust security measures in place to protect client data.
Future Trends in Accounting Technology
Robotic Process Automation (RPA) is a leading technology driving changes in accounting, with usage expected to grow by 72% in the coming years. RPA will continue to increase efficiency and reduce costs. Other emerging technologies include:
=Natural Language Processing: This technology will provide valuable insights from previously inaccessible unstructured data.
=Data Visualization Software: Tools that quickly convert data into tables, graphs, and charts will become more prominent.
=Blockchain: Blockchain will gain traction for its secure transactional data recording capabilities.
In conclusion, automation assists accountants in developing their positions, delivering more effective services to clients, and achieving greater outcomes for companies. It is also changing the role of the accountant from a bookkeeper to a data guardian. This is because automation is gradually becoming more sophisticated and is bound to affect the accounting profession in the future. It is equally important for professionals to keep track of these changes in order to ensure that they remain relevant and marketable!
The author is the CEO and Founder at Fhero Accounting Solutions.
