Accounting is not the only profession to have been impacted by the rapid growth in technology. Few industries have been left untouched by the introduction and evolution of digital tools that were once the stuff of fiction but now sit at the heart of many organizations. That said, the tech revolution sweeping the accountancy world has been so great the very job description of accountants is being rewritten as we speak.
Studies have found that 57% of accountants believe technology literacy is the most critical additional skill for future recruits in their field, even ahead of relationship building and business advisory. When you consider that only 36% of respondents believe project management is a vital skill of the future accountant, it is clear just how much technology has infiltrated the walls of accounting practices.
That fact is reinforced by Mordor Intelligence data that shows the value of the global accounting software market is expected to reach $19.59 billion by 2026, up from $12.01 billion in 2020. With 85% of accountants believing the profession in their country needs to implement more technology to remain competitive globally, there is clearly an insatiable thirst for such investment – and that is without even factoring in the impact of COVID-19. As noted by Deloitte Philippines partner Wilfredo A Baltazar, the pandemic has forced an increasing number of accounting firms to incorporate virtual communication applications and digital tools into their operations to carry out essential procedures such as vouching, tracing and stocktaking.
How has technology changed accounting?
As a profession with a proud history of embracing change to meet client needs, here are five ways the accounting industry is being impacted by the technological age:
- The cloud: accounting firms have long used the internet to promote their services through company websites and social media accounts. Now the cloud revolution is changing the way they do business on a daily basis. The ability to log on and access data wherever they are and whatever the time of day is providing accountants with unprecedented flexibility and the power to streamline information like never before. Cloud-based systems mean data can be analyzed in real-time, files can be synchronized across multiple platforms and updated documents are secure and automatically backed up on the cloud. And that is without even mentioning the cost-saving benefits of using a filing system that provides unlimited storage and requires no physical space.
- Automation: time-consuming and repetitive jobs have become a quick and simple task through the ability of accounting software to automatically update records as transactions happen. Coupled with the advent of optical character recognition software that takes pictures of printed documents (eg: receipts) and imports them into the software, the need for manual entry has been drastically reduced and is saving significant time. A 2020 study found 58% of accountants believe automation improves efficiency and productivity and that number is certain to rise as more firms embrace its advantages.
- Client relations: the adoption of accounting technology is proving equally popular with clients. Remember the days when individuals or businesses needed to set aside half a day to meet with their accountant, factoring in travel time, potential delays and wading through reams of documents face-to-face. Then there was the hassle of often needing to drive across town merely to sign a couple of documents. Those days are a thing of the past as advances in technology allow accountants and clients to not only access real-time data remotely but simultaneously view, edit and comment on documents. Video conferencing – never more accepted than in a COVID world – it also makes meeting with an accountant as simple as clicking on a link while seated at their own desk.
- Higher learnings: where accountants once had to spend the bulk of their time manually compiling and computing data, the technology revolution means so much of that tedious work now happens at the click of a button. What that means is savvy operators now have more time to analyze the data for their clients, identify key insights and formulate strategies to deliver future improvements. The rise of accounting software and tools has created an environment where accounting is becoming less about number crunching and more focused on high-level analysis, financial planning and business advice and consulting.
- Improved accuracy: automating recording of transactions and transfer of data is playing a key role in reducing human error. Manual entry is not only time-consuming – it heightens the risk of potential errors that can lead to big headaches come tax reporting season. Fortunately, modern accounting software is able to not only check for common errors but alert accountants of them, ensuring their clients are able to make decisions based on correct information and reduce the likelihood of penalties and audits due to unnecessary mistakes.
The power of outsourcing
At a time when the industry is under increasing pressure to improve efficiencies and reduce costs, the effects of technology on the accounting profession is welcome relief. There has never been a greater need for businesses to work smarter, not harder, hence why many accounting firms are also looking beyond their shores to meet their staffing needs.
Outsourcing accounting and bookkeeping services to renowned hubs such as the Philippines have been shown to improve productivity and efficiency, ensure better retention rates and heighten staff satisfaction. Cost savings is also one of the main reasons smart leaders look to outsource, with firms able to save up to 70% on employment costs compared with hiring talent locally.
- BAS preparation
- Budget forecasting
- Compliance reporting
- Expenditure allocation
Just as the rise of accounting technology is allowing firms to streamline processes, outsourcing certain roles to expert providers is gifting in-house teams more time to focus on the growth of not only their business but those of their clients. Learn how one firm has used outsourcing to improve the quality of bookkeeping work provided to them at tax time and, in turn, grow their firm.