Innovation in the 21st century is at an all-time high. One simple look around us speaks volumes to the progress humanity has made in the last two decades. With technological advancement embedded into every facet of life, the accounting profession is no exemption. Accounting has undergone a drastic change over the past decade, thanks to the evolving technology and methodology, with innovations like paperless bookkeeping entering the fray. This leads to a big question: What is the future of the accounting profession in this age of information?
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Accounting in 2022
In the past, accountants were primarily charged with the maintenance of the accounts and accounting records of the business, as well as management and analysis of financial data. Machines have changed the way the accountants work today. However, automation is not the only technological aid to accountants. Let us have a look at some of the new innovations that have reshaped the accounting profession.
Cloud Accounting
As defined by Financial Force, Cloud accounting software is similar to traditional, on-premises, or self-install accounting software, except that the accounting software is hosted on remote servers. Data is sent into “the cloud,” where it is processed and returned to the user. Cloud accounting allows for a centralized server to host all the data, allowing for quicker and easier access to your financial records from anywhere in the world. This is what we call “paperless bookkeeping” as it saves the cost of paper-based recordkeeping, and all the records are secured on the cloud server.
Cloud accounting has become an integral part of the profession with 67% of respondents in the Sage Practice of Now 2020 reporting adoption of cloud accounting. Virtual Bookkeeping and cloud accounting are here to stay and following the Covid-19 pandemic and the spike in popularity of the remote work model resulting therefrom, have become the dominant method.
Robotics and Artificial Intelligence (AI)
The rise of AI and robotics has led to a significant drop in the labor cost of accounting. The mundane and repetitive tasks of accounting such as data entry have moved into the hands of AI, who use complex algorithms and machine learning to perform them. It is to be noted, however, that a machine can never replace human intelligence, and all work performed by AI must be reviewed by an accountant to prevent any major errors. It also requires a keen knowledge of these technologies to operate them, and the cost of implementing sophisticated AI may be out of reach for small businesses.
Normally, this would be a red flag for any accountant due to the trend of machines replacing human resources in other industries. For accounting, the statistics suggest that rather than replacement, machines are simply changing their responsibilities. In the Practice of Now 2020 report by Sage, 79% of accountants report that client expectations have risen to include services like business and process consulting. This is fantastic news for any budding accountants, and they must focus on technological literacy as well as sharpening consulting and analysis skills.
Outsourcing
While not being strictly technological but, rather, process evolution, cloud accounting also paves the road for outsourced accounting services. Outsourcing entails relegating the functions of the accounting department to a third-party firm that specializes in the field. Reputable outsourcing firms for accounting services provide access to accounting talent from all over the world as well as sophisticated technology at a fraction of the original cost.
The biggest advantage of outsourcing is cost optimization. With the rising demand for accountants to provide services like business consulting at the same old cost, outsourcing becomes the smart choice for businesses. For any accountants out there, working for a prolific outsourcing firm is worth an experience and should be considered as an opportunity.
Expertise Accelerated as your Accounting Outsourcing Partner
Expertise Accelerated (EA) is a Connecticut-based outsourcing and staff augmentation specialist for accounting & finance services, committed to delivering 60 percent quality-assured payroll savings to its US clients.
EA’s service methodology revolves around a futuristic doctrine to combine technology with experience and expertise to deliver cost and process optimization.
EA’s diverse service portfolio also includes accounting and bookkeeping services that relieve the management of mundane and repetitive tasks so as to spare it with the time and human resource to focus on areas of strategic and core interest.
Moving Forward
The advancements in accounting methodology and technology are being embraced with open arms by the profession, and businesses and accountants alike should keep themselves informed on the subject. For businesses, it is vital to search for accountants that are technology savvy and can adapt to the fast-paced evolution of the industry.
Outsourcing is a major player in the field of accounting today and can also prove to be the smart choice for SMEs. Accountants must similarly polish their technological literacy as well as expand their toolbelt to include high-quality consulting services. Ultimately, technology only serves to benefit the field, and with a reliable guiding hand, technology and man can step together into the future.