This article was updated in March 2023 to reflect current industry trends and new information.
Technology has transformed many industries, from manufacturing and retail organisations to food and beverage companies. The accounting profession is not immune, and technology has changed the accounting industry through automation, cloud-based apps and SaaS solutions.
In this article, we uncover how technology has changed the accounting industry and influenced the changing role of accountants.
How technology has changed the accounting industry
Many in the accounting profession have already embraced the fact that cloud services and technology will continue to influence the industry in the form of cloud-based apps. These applications simplify such activities as purchase order processing, accounts payable and receivable, billing and invoicing, fund accounting and tax management.
The growing adoption of cloud-based apps means that an increasingly larger selection of accounting activities will be hosted in the cloud. Driven by greater agility, mobility, cost benefits and simplified IT infrastructure, it will allow accountants to work from any location.
Artificial intelligence and robotics have automated complex and repetitive tasks and processes to reduce operational costs and increase efficiency. Innovations in taxation software have improved accuracy while reducing margins of error.
The changing role of accountants
A notable effect technology has had on the profession is the ability of accountants to now work from virtually anywhere. This, in turn, grants smaller firms greater access to global customer and talent pools that were previously out of reach.
Prior to the availability of cloud services, an accountant was typically involved in many aspects of their client’s business. With the dynamic shift toward accounting software programs becoming more automated, there is an increased demand for business planning services and the role of the accountant is changing to that of a business advisor role.
Accounting roles are also becoming more separate with a more specialist approach to some accounting services such as taxation, bookkeeping, brokerage and to more specific roles for cloud integration.
This changing role of accountants requires new sets of skills and requires accountants to stay abreast of technological trends, be open to learning new technologies and learning to optimise accounting software solutions and cloud-based apps to meet the needs of their organisation.
4 technology trends changing the role of accountants
While technology’s disruption of the accounting industry began somewhat slower than in other industries, the evolutions in accounting software, mobility and cloud-based apps, has changed the everyday activities of accountants.
Accountants will have to embrace these rapid advances in technology to remain relevant in the accounting industry.
1. Artificial intelligence
Automation has already begun to transform accounting.
This technology trend shows more productivity and cost-effectiveness. This is the result of more business processes becoming automated, particularly in areas like data collection and data processing.
We have already seen this shift result in accountants starting to take more of a consultant role to clients. Accountants are adding value in new ways, for instance, providing crucial financial and business advice.
This trend will be further driven by advances in AI, already having the capabilities to automate complex and repetitive tasks and processes, with extreme accuracy, reducing operating costs and increasing efficiency.
AI is not to be seen as a threat but as a compliment for today’s changing roles and embrace AI technologies to understand how they can work for a better tomorrow.
2. Cloud-based accounting apps
Industry-specific applications provide accountants with secure, anytime access from any device.
The applications can easily track cash flow, scan receipts, send quotes and track sales and expenses. Many of the applications offer a full-featured suite of accounting solutions that can track time and expenses, invoice clients, reconcile your bank statements, and handle many of your other accounting needs.
With a host of add-ons such as payroll and HR systems, CRM and POS software that will easily integrate with the client’s inventory control and warehouse management solutions.
Industry providers of cloud-based accounting apps, such as Xero and Unleashed are now providing application playbooks and advisory courses to ensure industry clients have a strong foundation from which to get started, enabling accountants to build connected platforms and provide strategic advice to guide clients through the process.
3. Blockchain technology
Blockchain technology shows some promising potential for the accounting industry.
This technology trend enables entities to share a common infrastructure for database retention.
For instance, instead of companies keeping and then reconciling records of the same transaction in their separate, privately managed databases, both sides of the transaction can be recorded simultaneously in a shared ledger.
This process is less prone to human error and fraudulent behaviour as it makes falsifying or destroying financial records practically impossible.
More benefits of blockchain technology include standardisation and increased auditing efficiency. It will allow auditors to automatically verify a large portion of the most important data relating to financial statements.
4. Automation will continue to reduce paperwork
Optical Character Recognition (OCR) technology scans a physical document and translates the content in a digital format.
For example, when you scan a receipt, OCR technology will process the image, translate the numbers and generate structured data. Once the OCR technology has extracted the data, tools like AI and machine learning will take that data and use it to interpret and generate something more valuable than discrete sets of data.
OCR tech is speeding up, meaning that images can be converted to digital data quicker, allowing nearly real-time processing.
Similarly, AI is also developing quickly. With all the data at its disposal, the AI can make recommendations, generate forecasts, and spot patterns with the data.
What does this mean for businesses?
Automation is great for categorising information without wasting time so that staff can spend their time on more value-adding tasks for the business. Applications like Receipt Bank, Xero, QuickBooks have already begun to implement this.
How accountants can prepare for technology changes
The digital era has changed the landscape of accounting, so here’s how accountants can not only survive but thrive in the new age.
Implement the right technology
Automation is more prevalent than ever in the accounting profession. While it might be costly to implement initially, a future-focused mindset will allow you to keep up with the advancements in technology and improve old processes.
Understand up-and-coming technology
It might surprise some firms how quickly the latest trends and technology that were once far removed from their day-to-day lives are catching on. With new technology popping up so frequently, accountants will be swimming in a sea of information.
Accountants can start with understanding these new tech trends in the context of their role and how the technology can be beneficial to their clients.
Develop a supporting skill set
It might be daunting for accountants to think that automation and machines will soon take over their role. However, opportunistic accountants will be able to develop their skill sets in a different way.
For accounting professionals who are tired of trawling through their client’s spreadsheets to reconcile transactions, recommending or implementing cloud-based software to help their clients manage their business processes from inventory management to accounting and payroll.
This will allow the accountants to take on a more analytical and advisory role, instead of the traditional hands-on method they were used to.
In order to survive in the tech future, accountants need to be adapt their role by delivering insights that help make data-driven decisions. They are the ones who know their clients’ business deeply enough to provide reliable advice.
As we move away from traditional financial management, more software will be geared towards real-time data. Real-time data has many benefits for a business but for accountants, accurate real-time data can help in their analysis and decision-making.