Technology has had a major impact on the accounting industry. Gone are days when technology was a second thought and accountants preferred the traditional methods to which they were accustomed. As we start another year, technology is also progressing rapidly. The recent business disruption by the COVID-19 pandemic also has contributed to the acceleration in tech adoption. A major lesson learned from the events of the past two years is the need for digital transformation and prioritizing technologies that will help businesses remain relevant.
Since the accounting industry plays a crucial role in running businesses, it is important to be aware of relevant technologies that will impact their future work.
Remote work is picking up, and accountants have not been left behind. This creates a need for the accounting department to rethink their workflow and optimize hybrid arrangements that combine working in the office and remote work. Embracing hybrid arrangements will help avoid losing employees and enable access to a pool of employees with specialized skills as they can work from anywhere.
Cloud-Based Accounting Services
Cloud-based accounting solutions have enabled accounting services to be provided virtually. This has grown exponentially with the COVID-19 pandemic. Software solution providers are expected to continue developing innovative solutions that will enable remote accounting.
The need for cloud-based accounting services also will be heightened as more businesses seek to cut operational costs. With cloud-based solutions, they can pay for only what they use and not necessarily make heavy investments.
Increased Automation of Accounting Tasks
Automating accounting tasks has helped replace many time-consuming aspects of an accountant’s daily work. It is expected that more tasks beyond just data entry and calculations will be automated. As more accountants realize the benefits of automation, such as reducing errors in payments, ease of invoicing, less ambiguity, enabling compliance, etc., providers will develop more automated solutions.
The accounting industry has not yet fallen victim to the great resignation witnessed last year, where the labor department reported millions of people quitting their jobs or leaving the workforce entirely. Such occurrences will increase robotic process automation (RPA) to include more efficient automation for critical functions such as payroll, purchases, invoices and payments.
Cryptocurrency and Blockchain Technologies
Although cryptocurrency and blockchain technologies have been around for a while, they are still difficult for most to figure out. However, there is an increased uptake of these technologies. Some countries already have allowed cryptocurrency as a legal transaction currency. As this trend continues to grow, accountants and auditors are tasked to understand these technologies so that they can offer sophisticated service to their firms or clients who invest in cryptocurrencies.
In other areas, blockchain technologies will continue being utilized in validation services such as audit and risk analysis, and balancing and sustaining accounting records.
Advanced Artificial Intelligence (AI) and Machine Learning
According to a CNBC TEC survey, 90 percent of executives surveyed agreed that machine learning is critical for companies in 2022, with 20 percent saying they would be willing to invest money in this technology.
There will be more adoption of sophisticated AI solutions that offer better insights, help make data-driven decisions, and carry out basic tasks that take up a lot of an accountant’s time.
Machine learning will be used to develop algorithms that learn patterns in accounting tasks to help reduce mistakes early and avoid wasting time looking for errors. It also will be useful for audits and predictive analytics to forecast future trends.
Although AI and ML may not work well in areas that require creativity and intuition, they can help aid decision-making.
All the advanced technologies mentioned above offer promising benefits. However, they also present a new problem in data security. For instance, remote accounting adds a vulnerability that allows cybercriminals to gain access to a company network. Considering that the accounting department holds crucial financial data that attackers target, security is critical for any business.
With cybercriminals using advanced technologies such as artificial intelligence, it is now more important than ever to harden access to corporate data. Therefore, there will be more defensive cybersecurity services to handle the rise in security issues that come with technology growth.
As we forge ahead in the new year, one thing is certain: Technology will continue to be a main driver in the accounting industry. This creates a need for upskilling to evolve with new accounting roles. It also helps to be conversant with technologies that will help meet client demands.