The accounting industry is changing at an exponential rate. New technologies are challenging the way we do things and forcing us to be more resourceful than ever.
The rapid adoption of cloud-based technology, artificial intelligence, natural language processing, and machine learning has completely transformed the way companies manage and report their finances.
This article describes five of the key ways technology has changed the accounting industry and how businesses continue to adapt.
1. Cloud-Based Accounting Software
Cloud-based accounting software has completely transformed the way businesses manage their financial information. Once reserved for large corporations, cloud-based accounting software has recently become affordable enough for adoption by small businesses.
A cloud-based accounting software solution dramatically reduces startup time.
It is no longer necessary to buy software, work on an installation and import data into a database. Instead, a business can be up and running in minutes.
With cloud-based accounting software, financial reports are delivered in real time and authorized users can access information from anywhere.
Companies have been able to adapt their business model by quickly adopting cloud-based accounting software and taking advantage of its flexibility.
For accountants, the cloud-based accounting software has also been a welcome tool. Cloud-based accounting software has reduced the time it takes to complete financial reports while increasing reporting quality and efficiency.
Accountants focused more on customer service than on the behind-the-scenes tasks needed 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 leveraged artificial intelligence and machine learning capabilities.
Artificial intelligence uses algorithms to analyze massive amounts of data in real time. This analysis can take place in the form of “big data” analysis or on a more individualized level through machine learning. Machine learning capabilities are used to connect data points to find trends and make predictions about future opportunities based on past results.
When applied to accounting-related tasks, it has allowed companies to better predict the financial future of customers and provide better services. For example, an accounting firm or a CPA firm can use these tools to provide more personalized and accurate recommendations to clients based on a combination of factors that include past results and current trends.
Blockchain technology is one of the most exciting financial innovations to hit the market. It is a decentralized network that stores data and prevents fraud and tampering.
This makes it particularly useful for financial institutions that process large amounts of sensitive data, such as banks.
Blockchain technology is used by banks for everything from retail transactions to securing sensitive customer data. Since it is a decentralized network, the data is much more secure and protected from hackers.
There are still scaling and latency reduction issues that need to be resolved before blockchain can be used for anything, but it seems likely that we will see it spread as awareness grows.
4. Robotic Process Automation (RPA)
RPA, or robotic process automation, is another of the most interesting 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 data entry, that don’t require a lot of analysis or creativity.
- Human Intelligence Tasks – RPA can also be used to automate more complex tasks that require human intelligence, such as data analysis and decision making.
- Fraud detection — AI systems have made huge strides in detecting fraud. But RPA can be used to automatically detect and prevent fraud.
- Compliance Tasks – RPA can be used to help businesses comply with regulations, such as tracking the number of hours worked by employees. RPA can be especially useful for small businesses, which struggle to comply with many regulations. — Reporting Tasks — RPA can also be used to help companies generate reports. RPA can be especially useful for companies that use a large number of custom reports.
5. Mobile apps
The accessibility of mobile banking services and the rise of mobile payments are transforming the way businesses operate. Mobile apps are no longer just a convenient way to bank. They have become a necessity for many businesses.
But that means businesses need to find new ways to keep their app up-to-date 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 apps also present a tremendous opportunity for finance organizations to improve customer engagement. As businesses invest more in the mobile environment, financial institutions increasingly need to create faster, more efficient and more accurate mobile solutions for their customers.
As the world becomes more digital, businesses are turning to automation and the need for new accounting technologies continues to grow. While these technologies undoubtedly offer benefits, their implementation and maintenance create unique challenges that organizations will need to continue to adapt to. But now is the time for them to act and embrace change while using digitalization to create new opportunities for their businesses.[Lead Image Source: Pixabay]