The fintech and accounting space has seen some huge changes over the last few years especially due to the advancement of technology and specifically artificial intelligence. Today, we’ll be exploring automation technology and how it’s shaping the accounting space.
Over 90% of accounting firms claim that technology allows them to allocate more time and effort toward clients and increase productivity.
As such, it’s unsurprising that 90% of small accounting businesses and 94% of large firms strategically plan to use technology to bolster their tax season efforts and results.
We’ve used the term “technology” in blanket fashion thus far, begging the question: What technologies are making the most profound impact in the accounting sector?
In short, automation.
More to the point, Gartner cites automation technologies saving finance teams up to 25,000 hours of extra weekly work caused by human error, spearheading $878,000 in cost savings.
Below, we’ll explore the big-picture impact and overall importance of automation in the accounting industry.
How Important Is Automation To Today’s Accounting Industry?
One statistic best encapsulates the importance of automation in the accounting sector: nearly 90% of industry pros claim these technologies increase efficiency and profitability.
It’s really that simple.
Automation helps accountants do their jobs better, be more attentive to their customers’ needs, and drive business results.
In other words, yes, automation is vital in driving positive outcomes in accounting, but only the types of automation that make sense for your business.
Instead of a one-dimensional tool (such as a calculator), the ideal automated technology is key to any thriving business model across the accounting sector.
Automation, through all its advancements, doesn’t only make accountants better at their jobs.
It continues transforming the industry, altering processes, product offerings, and consumer expectations as companies learn to harness its full power.
Think of the big picture here: By changing the nature of the processes involved in an accounting firm, accounting also transforms the roles and the type of work done.
Different types of employees with more unique skill sets might find themselves in roles that were not available—or of interest—to them in past eras without advanced automation.
How Is Automation Changing Accounting Processes?
Did you know you can automate approximately three-quarters of all accounting tasks? That level of ubiquity in any work setting can only result in overhauling the related processes.
At its core, accounting automation removes all the manual, menial accounting elements and performs the associated tasks automatically.
Many such systems perform all the transaction tracking and number crunching on an accountant’s behalf. However, that’s not the only way automation is transforming the sector.
Changing Bookkeeping as We Knew It.
Automation has altered accountants’ jobs by removing repetitive and manual bloat from their workload. The automatic completion of data entry means accountants now curate the company’s financial data. They’re no longer solely bookkeepers.
Thus, critical components of a successful firm—risk management, cash flow conservation and projection, and data analysis—have improved dramatically.
AI Is A Primary Driver In Transforming Accounting Processes.
Available AI-powered accounting automation tools can assist with analytics, flux, and data integrity checks.
They can bolster technical accounting research and statement preparation, elevating the role from what it’s been until now.
Financial reporting is another process undergoing an automation evolution.
The story of Instacart, the grocery tech company, highlights how much automation can transform financial reports.
Initially, they used Google Sheet checklists for month-end close. Unfortunately, Google Sheets couldn’t effectively perform a 100% audit trail of changes, but their automated system could.
Due to automation, Instacart added a layer of assurance that its consolidated income statement would reflect all real-time income updates.
As a result, managers didn’t need to review multiple consolidated trial balance iterations.
That’s automation in a nutshell: Heightened accuracy, efficiency, and productivity, enabling staff to focus on more vital tasks.
What Are The Primary Benefits Of Automation In Accounting?
Here’s a list of the primary benefits automation technologies offer to the accounting industry:
- Accounting automation saves time for all tasks, such as closing the books. Much of this benefit results from needing to continually re-check data entry.
- Automation heightens productivity on menial tasks, saving time. More free time allows accountants to hone superior strategies that improve customers’ financial health.
- With automation tools, accountants offset human error and enjoy improved data accuracy. In seconds, accounting tools generate thousands of accurate ledger entries with no fear of data mishandling.
- Accountants using automation can retrieve data within seconds instead of scouring the darkest corners of physical storage rooms.
- Cloud technology enables modern accountants to leave floppy disks and USB sticks in the past where they belong. No matter where accountants are, the cloud lets them check a document or process a payment. There is no need to be at the “right desk” or have paper files anymore.
Future Accounting Technology Trends.
Robotic automation processing (RPA) is the primary automation technology driving change in accounting. While it’s already found its way into many accounting and finance firms (53% as of 2020), usage will grow by 72% in the coming years.
Growing more precise as time passes, RPA will further increase efficiency and reduce operating costs through its ongoing evolution.
Expect the following technology to also make a splash in the accounting industry in the near and distant future:
- Accounting firms are gaining access to mass amounts of previously inaccessible unstructured data. Advances in natural language processing make it possible to translate and offer valuable insights from this data.
- Software that helps visualize data in seconds (i.e., instantly turn it into tables, graphs, charts, etc.) will become more prominent.
- Blockchain technologies will gain more traction because of their ability to distribute and record transactional data securely.
Conclusion.
Automation enables accountants to perform better at their role, allowing them to provide superior services to their customers and better results for their firms.
It’s also changing the nature of the accountant role from bookkeeper to curator of a company’s financial data.
Automation will continue to advance, further evolving accounting as we know it. Industry pros must stay on top of these changes to maintain their competitive edge and viability.
Want to learn more about how advancements in modern tech can help scale your business?
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