How Will Technology Change Accounting in the Future?
- 20th October 2022
- Online Learning
Technology is rapidly advancing and practically every field and industry will continue having to adapt to keep up with these advances. If you are currently working as an accountant, or are interested in becoming an accountant, a vital step in your career is ensuring that you are comfortable and confident with the technological advances that are occurring in your field.
What is Accounting Technology?
Finance and accounting companies are becoming aware that they must implement the use of new digital technologies into their workplace. Artificial intelligence, automation, data analytics and more advanced accounting software can improve the working processes and results of accounting organisations and lead to enhanced productivity.
Working in finance in 2023 will differ greatly from working in finance 10 years ago, and modern roles incorporate several new digital products and advanced finance-related software. Working at a bank, for example, will now incorporate using modern forms of digital-based customer service and communication. Firms and their workers must move with these times and get to grips with changing technologies if they want to retain a competitive edge in the field.
Future of Accounting With Technology Transformation
1. Technology will support, not replace, accountants
Automation is being utilised to improve accountants’ work, rather than replacing them in their role. Accounting technology improves efficiency and shifts the burden of time-consuming tasks like data entry onto a programme rather than an individual. This also eliminates the issue of human error.
2. Accountants will be able to offer more value
Another benefit of adopting account technology is more in-depth analysis. Accountants can utilise data to offer insight into current trends and forecast problems that may arise in the future. This contributes to evidence-based, data-driven decision making.
3. Advanced ways to present data
Data visualisation is a useful tool for any business. This area provides the opportunity for accountants to present information in novel and creative ways. This leads to more efficient communication internally and externally since people who have different learning styles can see data presented in different ways. Better communication will lead to more efficiency within the business and if more people can understand what is going on, this will lead to more informed and effective decision making.
4. Accounting skills are evolving
As mentioned, advancements in digital technologies have led to big changes to the skills required by finance professionals. It is important for accountants to develop skills in digital technologies including data analytics, automation and coding which can help them work more effectively. However, it may not be necessary for every accountant to be an expert in all these areas, as different skill sets can complement each other. It is more important for people to have an openness towards these changes and how digital technologies can be used to help them.
5. Recruitment and retention transforming
Tech-savvy young adults are used to new ways of working and employers may find a generational divide between, for example, millennials/Gen Zand senior staff. Companies who lack digital advancements may find it more difficult to attract and retain younger members of staff. On the other hand, if a company focuses too much on digital technologies, more experienced accountants may be put off these companies. It is important for accountancy firms or companies in the finance industry to appeal to all skillsets and remember that different people offer different tools and employees can support and learn from one another.
Emerging Accounting Technologies
Every day, new technologies are being developed and these advances are taking accounting to new levels and opening doors to completely different ways of working. Some of the most prominent technologies emerging in the accounting field are:
1. Cloud computing
Often perceived as an abstract storage space no one can quite get their head around, the cloud is a tool that allows instant access to resources, such as data and computing capabilities. One vital feature of a cloud-based system is the continual updating of information. In terms of finance, this allows accountants and clients to view and analyse data and make data-informed decisions using up-to-date information.
2. Automated accounting tasks
Accounting can include time-consuming and menial tasks e.g. audits, tax preparation, banking, and payroll. Many companies have shifted to make these tasks fully automated. We can see this trend continuing into 2023, where repetitive and time-consuming jobs are completed by machines, leaving more time for analytical tasks for humans.
3. Blockchain technology
This is a computer-based recording system which uses cryptocurrency within a user-to-user network. Blockchain gained popularity through its connection to bitcoin, but the technology has progressed substantially. Blockchain is appealing to accounting because it offers the possibility of a new type of accounting ledger.
Benefits of Technology in Accounting
As you can see, there are many exciting changes and technological advances happening in the field of accounting. To summarise, some of the benefits of incorporating these technologies into an accountancy firm are:
1. Time management: When the responsibility of menial tasks is shifted onto computers, employees are able to focus on more important tasks such as managerial duties, critical analysis of trends Wand decision making.
2. Increased productivity: Technology is used to streamline processes within accounting, meaning the workflow runs more smoothly and work is completed more efficiently.
3. Accuracy: Using AI to work through data eliminates the issue of human error and if used correctly, can give more accurate insight into a problem.
4. Security: Accountancy firms often hold a lot of high-risk information and there are many advanced programmes that allow you to store and protect data with little risk.
If you want to be a successful accountant, it seems clear you will need to develop your technological skills. Accounts of tomorrow must be technologically savvy to evolve with the changing industry. As more companies prioritise their use of technology, transport their information to cloud-based systems, and incorporate digital process in their workflow, accountants need to become proficient in a variety of technological areas, while retaining the traditional skills and knowledge that is required of an accountant.
Enrolling on an advanced programme such as LSBF’s ACCA course can help you learn more about what is required to become an effective accountant in 2023.
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