Technological advances have played a significant part in the growth of industries for ages. The reliance on technology has increased manifold, especially after the start of the pandemic. The accounting firms also have changed their tune according to the need of the hour. These tough times have shown how vital technology is for continuing work, education, or business purposes.
There is always this apprehension on whether technology will replace the job of accountants. It is like arguing about whether Kindle is a threat to physical books. To quote Stephen Fry, books are no more threatened by Kindle than stairs by elevators. On a similar note, technology can never replace human creativity. It can give an edge to the services provided by accounting firms. Hence, it will be foolish to ignore the advancement of technology.
It is essential for the service provider and the receiver to know the latest trends in technology. This knowledge sharing will lead to the optimum utilization of the technology. Thus, it becomes imperative to look at the latest technological trends for accounting firms in 2021.
Accounting Technological Trends
It might be easy to demarcate the history of every business or industry into two eras: pre-pandemic and after that. The things which were difficult to achieve in the pre-pandemic era became mandatory and easiest in the current situation. Consider the work-from-home (WFH) situation. So, every technological trend mentioned may be there for quite some time but proven to be effective in these times. The major trends to look out for in 2021 are:
- Automation of accounting processes
- Outsourcing of accounting services
- Role of Artificial Intelligence
- Cloud accounting
- Advisory services
- Blockchain Accounting
- Social media influencing
Automation of accounting processes
The accounting processes like bookkeeping, management of accounts receivable and payable, tax compliances, payroll management, etc. are tedious and time-consuming. Automation of these processes makes it simpler and saves time. Any excellent accountants will vouch that time is money! Better processes bring the expenses down, which will positively affect the bottom line.
The errors in accounting processes have a ripple effect. It will be manually difficult to trace the errors and rectify them along the process. Error-check, easy retrieval, and reconciliation of data, etc. are desirable features of automation for effective process management. There is always the risk of cyber fraud attached to network security in automation. The advantages of automation far outweigh the risks involved. Implementation of accounting software solutions like QuickBooks is also part of the automation process. These software platforms improve the accounting processes and provide the perfect solutions to the end-users.
Outsourcing of accounting services
The benefits of outsourcing the accounting processes are being increasingly recognized by small and medium businesses. One of the many challenges faced by small businesses is to find the right expertise and tools to streamline their finances. If at all they find the right expert, it comes at an enormous expense. Accounting service providers provide expert, customized solutions at an affordable rate.
The initial cost of automation is a deterrent for many small businesses. Outsourcing of the accounting processes allows them to enjoy the fruits of the latest technology at an affordable rate. The service providers make it their top priority to give data security to their clients. Outsourcing is on an upward trend for some time and is expected to maintain this streak in the future.
Artificial Intelligence and Robotic Process Automation (RPA)
It is common to interchangeably use the terms Artificial Intelligence and Robotic Process Automation. These topics have common aspects but are totally different. Robotic Process Automation is used to perform repetitive, mundane processes and improve the efficiency of such operations. Artificial Intelligence does advance analysis using logic-based techniques to understand the problem, interpret and build algorithms to provide solutions. The big four audit firms- KPMG, PwC, EY, and Deloitte- make use of these technologies. It is gaining prominence in the financial services and the banking sectors.
The identification of tasks and the knowledge to guide the AI and RPA related tasks is the challenge faced currently. The upside is the relatively low cost to implement. They are definitely one of the promising technological trends.
Cloud computing in accounting
Accounting has one of the most sensitive and enormous amounts of data to store and process. This is where the cloud servers help the accountants. The increased data accessibility with no compromise on data security is one of the major advantages of cloud computing. There is seamless communication possible between the service providers and clients. This improves efficiency and the cost to implement is comparably lower. The remote access to the data allows the accountants to provide solutions to the clients anytime and anywhere.
This technology trend is gaining popularity as financial data and communications are possible through online dashboards, MIS reports, etc. at an affordable rate.
Advisory services and data analytics
The role of accountants has grown over the years. Earlier bookkeeping was a synonym for the job of an accountant. Now, the financial service providers have the added responsibility of providing a direction to improve the business. They advise the business on investments, expansion of business, implementation of new ideas to improve efficiency, and whatnot. The data handled by the finance department is enormous and highly sensitive. The compliances and auditing are crucial to the survival and growth of the business. It is also essential to analyze and interpret correctly the influx of data for the benefit of the business.
This is a relatively new technology trend but definitely gaining popularity with its unique features. One of the big 4 audit firms, Deloitte, has predicted blockchain technology as the future of accounting. The major advantage of blockchain accounting is avoiding duplication of works, thus minimizing the errors associated. This is helpful in reconciliation and auditing. This improves efficiency and reduces the cost.
Social Media Influencing
The power of social media to create brand awareness is being recognized by businesses. It is no longer seen as a fad of the younger generation. The accounting services are also tapping the potential of social media to make their potential clients know about their different services. It is possible to understand the competitors and industry trends through social media.
Diligen has always been the trendsetter for providing a better experience to the customers. It stems from the realization that every technology is to improve the process and provide satisfaction to the customers.