Accountants have always utilized emerging technologies to enhance business financial management functions while making them more accurate, simple, and quick. Accounting practices are continuously evolving, from the incised clay tablets of the Sumerian scribes to calculating machines developed in the 19th century to the modern calculators introduced in the 20th century, these all technological advancements were a lot simpler if compared with the emerging technologies of the 21st century that are now completely re-defining the world of accountancy.
Heading into the 21st century, emerging trends in cloud, big data, and mobile technologies are converging to transform the ways in which businesses use information technology to enhance their operations. On the other hand, these advanced technological trends are also driving innovations in various departments including cybersecurity, accounting and bookkeeping services, etc. A “new normal” is emerging. This same goes for the financial industry as well. Emerging technologies are paving opportunities for accountants including automating time-consuming and repetitive tasks in real-time, allowing them to focus on more critical aspects of business finance.
What Are Accounting Trends?
Considering uncertainty in technological trends, it's quite challenging to predict to what extent these technologies will transform business accounting services. But keeping informed about emerging technologies and assessing their implications on the accounting industry could help accountants to understand the pros and cons of digitizations of financial operations. In this way, accountants can harness emerging technologies to transform the scope of accounting services. By 2026, the global accounting software market is forecasted to hit $20 million.
Accounting trends depict the developments and reactions to the evolving digital landscape, changing technologies, and other market domains that shape the accounting profession as businesses know it today. But how is the accounting industry re-shaping? The significant change is driven largely by the emergence of robust advances in the technological sector. In many ways, the coronavirus outbreak also accelerated the transformation. For instance, the adoption of cloud-based accounting software increased, as well as the financial industry began to move toward artificial intelligence and automation.
Technology and Automation - Redefining Accountancy
What’s new in the world of accounting? Ever-evolving technologies and a trend towards digitization of tedious accounting tasks are some of the most recent and innovative improvements in the financial industry. However, some of the accounting services which are being automated include bank reconciliation, inter-company consolidations, revenue recognition, and payroll generation. While there are heaps of other accounting functions that can also be digitized that are not happening due to misunderstandings about how the technologies can help and a lack of resources to implement them. But those that take the leap are getting competitive advantages.
Following are some of the technological trends that are reshaping accounting practices;
Artificial Intelligence (AI)
Across industries, there’s a mutual understanding that artificial intelligence has and can pour significant impacts on the finance and accounting sector. Artificial Intelligence in the Accounting Market is expected to register a CAGR of 30% over the forecast period (2022 - 2027). Businesses are using AI to automate highly repetitive tasks and automate workflows while allowing accountants to pay more attention to more critical aspects of business development activities. For instance, AI is being leveraged to automate business accounting services to make the data collection and processing procedure swift with an aim to provide data insights to the accounts so that they can make accurate decisions.
Data Analytics and Forecasting Tools
For startups, small businesses, and enterprises the use of budgeting, planning, and forecasting along with data analytics and visualization tools holds great significance. Nearly, 50% of accounting tasks can be automated through currently available technologies. Thanks to emerging technologies, finance operations and requirements are becoming more analytical and emerging technologies are transforming accounting and bookkeeping systems from reactionary to proactive and analytical. However, using advanced tech tools accounts can enhance the ability of critical thinking, problem-solving, and skills needed to build modern-day accounting strategies.
Data theft is becoming more prevalent than ever, and the finance sector is one of the leading targets. According to an Inc. article, 60% of small businesses fail within six months of a cyber attack. The breaches can lead to identity theft, stealing of personally identifiable data, and spoofing. This happens through various techniques including phishing attacks when the email is disguised to appear as legit or to come from a trustworthy source. Due to this, identifying potential emails and detecting phishing attacks will continue to be critical for accounting firms. Technologically advanced software and cybersecurity solutions can help accounting firms in this regard.
One of the biggest innovations in the accounting and technology sector has been the emergence of cloud-based computing, which has enabled accounts to work globally without limitations. Every year, sophisticated technologies emerge with the aim to streamline workflows, make jobs easier, updating existing systems, and much more. This means accountants now require less time to deal with clients and more time working with AI-driven automated accounting systems to get better data insights. Today’s cloud-based software is ridiculously intuitive and capable of simplifying accounting procedures even for the least experienced professional. Additionally, cloud technology also makes them more secure and increases accessibility, allowing accountants to get hands-on data from anywhere through internet-connected devices. Besides that, cloud-based software is packed with innovative features including the ability to integrate with other programs, which makes the job of an accountant easier.
Robotic Process Automation (RPA)
Repetitive and procedural business tasks like invoice generation, processing investment management accounting, documentation, monitoring cash flows and much more are time-taking and hectic to do manually. However, speed is essential for the digital future. So robotic process automation is the perfect solution as it holds the power of automating accounting tasks and aiding accountants to play their role to its maximum.
Machine learning and robotic process automation are being integrated simultaneously to re-invent accounting techniques. What’s become now is called continuous accounting which uses sophisticated automation technologies to digitize normal day-to-day business accounting services. However, the benefits of continuous accounting are not only for accounting teams, this also enhances the efficiency of operations, increases transparency, and boosts data integrity resulting in freeing up the time for accountants to pay attention to more important tasks.