The accounting industry is changing at an exponential rate. New technologies challenge the way we do things and force us to be more resourceful than ever before.
The rapid adoption of cloud-based technology, artificial intelligence, natural language processing, and machine learning has completely transformed how companies manage and report their finances.
This article will outline five of the major ways that technology has changed the accounting industry and how businesses are continuing to adapt to them.
1. Cloud-Based Accounting Software
Cloud-based accounting software has completely transformed how businesses manage their financial information. Once only available to large corporations, cloud-based accounting software has recently become affordable enough for smaller companies to adopt.
A cloud-based accounting software solution dramatically reduces the time to get started.
No longer is it necessary to purchase software, work on an installation, and import data into a database. Instead, a business can get up and running in minutes.
With cloud-based accounting software, financial reports are delivered in real-time, and authorized users can access information from any location.
Businesses have been able to adapt their business model by quickly adopting cloud-based accounting software and taking advantage of its flexibility.
For accountants, cloud-based accounting software has also been a welcome tool. Cloud-based accounting software has reduced the time it takes to complete financial reporting while increasing the quality and efficiency of reporting.
Accountants have focused more on client service than on the behind-the-scenes tasks required to generate reports.
2. Artificial Intelligence and Machine Learning
Another critical area of advancement has been the adoption of artificial intelligence (AI) and machine learning.
In addition to cloud-based accounting software, the emergence of cloud-based CRM systems, email marketing automation tools, and similar emerging applications have taken advantage of artificial intelligence and machine learning capabilities.
Artificial intelligence uses algorithms to analyze massive amounts of data in real-time. This analysis can take place as a “big data” analysis or on a more individualized level through machine learning. Machine learning capabilities are used to link data points together to look for trends and make predictions about future opportunities based on past results.
When applied to accounting-related tasks, this has allowed companies to better forecast clients’ financial future and provide better services. For example, an accounting firm or CPA firm can use these tools to provide more customized and finely tuned recommendations for clients based on a combination of factors that include past results and current trends.
3. Blockchain
Blockchain technology is one of the most exciting financial innovations to hit the market. It’s a decentralized network that stores data and prevents fraud and tampering.
This makes it especially useful for financial institutions that process large amounts of sensitive data, like banks.
Blockchain technology is being used by banks for everything from retail transactions to securing sensitive customer data. Since it’s a decentralized network, the data is much more secure and protected from hackers.
There are still some scaling and reducing latency issues that need to be resolved before blockchain can be used for everything, but it seems likely we will see it spread as awareness grows.
4. Robotic Process Automation (RPA)
RPA, or robotic process automation, is another of the most exciting technologies in the accounting industry. It’s a tool that allows businesses to automate routine tasks, freeing up employees to focus on higher-value work. Some of the most popular uses of RPA include:
- Administrative Tasks — RPA can be used to automate mundane tasks, like entering data, that don’t require much analysis or creativity.
- Human Intelligence Tasks — RPA can also be used to automate more complex tasks that require human intelligence, like analyzing data and making decisions.
- Fraud Detection — AI systems have made tremendous strides in detecting fraud. But RPA can be used to detect and prevent fraud automatically.
- Compliance Tasks — RPA can be used to help businesses comply with regulations, like tracking the number of hours employees have worked. RPA can be especially helpful for small businesses, which struggle to comply with many regulations. — Reporting Tasks — RPA can also be used to help businesses generate reports. RPA can be particularly helpful for businesses that use a large number of customized reports.
5. Mobile Applications
The accessibility of mobile banking and the rise of mobile payments are transforming how businesses operate. Mobile applications are now not just a convenient way to do banking. They have become a necessity for many companies.
But this means that companies need to find new ways to keep their app updated and improve their functionality.
Increased mobility means more opportunities for businesses to collect data, enabling them to make better decisions and design new products and services.
Mobile applications also present a tremendous opportunity for financial organizations to improve customer engagement. As businesses invest more in the mobile environment, it offers a growing need for financial institutions to create faster, more efficient, and more accurate mobile solutions for their clients.
Conclusion
As the world becomes more digitalized, businesses are shifting toward automation, and the need for new accounting technologies continues to grow. While these technologies undoubtedly provide benefits, their implementation and maintenance create unique challenges that organizations will need to continue adapting to. But the time has come for them to take action and embrace change while utilizing digitalization to create new opportunities for their businesses.
[Lead Image Source: Pixabay]
