If you will notice more closely then you will see that every industry is going through a phase of change in the current era. And all these good changes are being made possible with the help of technology.
Whether it is a retail business or travelling industry, every firm is adopting the latest technology and stepping summiting new Everest every day. In a similar manner, accounting industry has also gone through a lot of changes with the help of technology, but this is just the start of the evolving journey of accounting as there are still many technological innovations awaiting to morph the accounting industry.
In fact, the accounting industry was one of the first industries which was impacted due to the increase in data technology. Looking at the adoption of technological solutions such as accounting software and tax software, accountants were the first one to make a move towards this data-driven technological solutions.
The early age of using stamps, invoices, spreadsheet for accounting has long gone and now people have become used to accounting software solution which requires less effort and gives more productivity. But now many people are doubting that the increasing integration of technology in accounting operations will blur the future of accountants as with more and more automation, the need for accountants will slow down.
But every accountant needs to know that instead of considering technology as a threat to their job, they can become versatile and capitalize on the blessings of technology in order to improve their day to day operations.
So, in this blog post, we will be looking at the 3 key technological innovations which will be responsible for shaping the future of accounting in the upcoming years.
Blockchain is the same technology which empowered cryptocurrencies but you will be surprised to know that the same technology will have a great impact on the bookkeeping practices as well. But before we get into the effect of Blockchain on accounting, let’s go through the simple definition of Blockchain first.
According to Harvard business review “Blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”
Blockchain can be simply considered a spreadsheet copied thousands a times over a network which has been programmed to regularly update the spreadsheet. So Blockchain can store anything of value and the stored value is present on Blockchain as a shared and reconciled database.
If a transaction is entered into the Blockchain then there is no any way to modify it and therefore, the risk of security is completely eliminated. If a company will be using Blockchain technology for accounting then accountants will be more focused on entering accurate data than comparing financial reports to bank statements.
Another way through which Blockchain will modify accounting is after choosing Blockchain for accounting, business owners will be able to set rules for how money from transaction is spent. And even the automated reports will give access to valuable data.
Automation in accounting through technology has helped the accountants to save time while minimizing errors. All the tax software and accounting software have contributed a big portion towards making the accounting operations automated.
The new technology of Artificial Intelligence will further help in making automation in accounting to be more intuitive and efficient. Along with that, the AI will also help in spreading past basic bookkeeping to different accounting functions such as audit work papers.
There is no doubt that the better use of Artificial Intelligence will lower down the fee of carrying on with technological accounting, but it will never be able to replace human completely. There are still many grey areas of accounting like tax liabilities and treatment of assets which can’t be handled without human intervention.
The cloud technology has replaced the need of physical storage and allowed small businesses to host their accounting software on the cloud platform. With the power of cloud technology, small businesses are able to gain the power of global accessibility, high uptime, enhanced security, and flexibility. But even with so much evolution brought in by cloud technology, you can consider it to still be in its infant stage.
Currently, there is a big gap between legacy accounting software and cloud-based platforms, but it is being expected that this gap will be parted in the near future. After such development in the cloud accounting industry, the client-accountant meeting and other communications will change forever.
But any change in the cloud accounting technology will prove to be beneficial for both the client and the accountant because the versatile and robust cloud technology will become much more responsive and will provide real-time collaboration to all the users.
The accounting industry has still a long way to go in the technological advancement and with the help of technological innovations like Blockchain, AI and Cloud, the future of cloud is safe and bright.
While there will be still many people who will be worried about the replacement of human with the technology, but things will turn just opposite of what people are expecting. These technological evolutions will instead enhance the productivity of the accountants and accounting operations.