Over the last decade, technology has been developing at an exponential rate. It has had a big impact on the way we live our personal lives, and the effect on the ways we work has been even greater. Over the last five years, technology has changed how we manage many different aspects of business operations. Accounting is no exception.
Access to faster software that can perform more complex functions, as well as interconnected technology has made accounting both easier and more efficient. Indeed, organizing financial information, analyzing data, and measuring economic activity has never been simpler.
Five of the Biggest Impacts of Technology in the Accounting Industry
The age of technology in accounting has truly arrived, leaving a permanent mark on one of man’s oldest industries. Here are five ways in which technology has changed the accounting industry in the last five years:
1. Cloud-based Systems
The internet is something all businesses should learn to utilize fully. Too often, we think of the internet as nothing more than the place our company website and social media accounts reside. However, there is a momentous change that is currently sweeping across the corporate world: the cloud.
Many accounting firms are now using cloud-based systems to streamline all of their information. Wherever you are, whatever time of the day, all you have to do is log on, and you will be able to immediately access your data.
What does this mean to your accounting business? Here are just a few ways it can improve your processes.
Having records in the digital format, and on one comprehensive system, means that you will be able to manage and retrieve files more easily when needed. Distributing accounting information to different branches within your company will also become a breeze. Moreover, using simple and ready-to-go cloud-based systems will significantly reduce information technology and file-keeping expenses. Security, backup, and data retrieval have also benefitted greatly from cloud technology.
2. More Diverse Roles for the Accountant
If there’s one aspect of accounting that professionals dread the most, it’s the very tedious and tiresome task of compiling and computing data. However, with the advancement of technology, you can now do all that with just a click of a button.
Consider how two accountants handle their client accounts. The first doesn’t trust technology, so he uses it as little as possible. His work consists of keeping the client’s files in order and doing this year’s taxes.
The second, on the other hand, has a completely different focus. By using accounting software and cloud computing, she gathers data and makes computations quickly and easily. She spends the bulk of her time analyzing the data to discover ways for the client to improve their business today and plan strategically for tomorrow. She not only manages this year’s taxes more easily. She has more time to find and talk about ways for their client to improve their tax situation in the future.
Developments in accounting software and application have now given accountants more time on their hands for more diverse tasks. They are able to veer away from time-consuming number crunching and are increasingly able to expand into more specialized and strategic roles. More specific and value-adding roles are now up for grabs, and skilled accountants can provide more high-level specialty services. These may include data analysis and interpretation, providing financial planning advice and business consulting services, and more involvement in your company’s ongoing operations.
3. More Efficient Client Transactions
Digitizing data and operations is beneficial not only for those working within the ranks of your company but also for your clients.
Imagine the typical old-school accountant-client interaction. The accountant and the client both have to make time to meet at a specific time and location. They make their way there so that they can go through documents and discuss the client’s financial situation. If the client gets stuck in traffic, it throws off the accountant’s schedule. And, if the accountant has some kind of delay, they’ve wasted the client’s valuable time. Then, an important decision-maker may be angry enough to switch another accounting firm.
With the advances in accounting technology, there is longer a need for on-site consultations. Because accountants and clients alike are able to access real-time data remotely, both parties can simultaneously view, edit, and comment on their statements. Then, they can convene and discuss in whatever manner is most convenient—including web-hosted video conference.
What it means for your accounting firm:
In addition, software and applications with consumer functionality have allowed non-accounting professionals to understand what is going on with their finances more easily. And, when your clients can view and analyze the data on their own, they get excited about their financial situation and are prepped to understand your strategic suggestions. In the end, it means your clients can thrive through optimized business operations, so they stay in business, expand their company, and remain your customer.
4. Mobile Accounting
It might be stating the obvious to say that we have become increasingly dependent on our mobile devices. Yet despite their ubiquity, there are many advantages to mobile devices that small businesses have yet to take advantage of.
There are now mobile applications dedicated to accounting functions. Here are just a few of the tasks you can now take care of on your mobile device:
You can accomplish all this with just a couple of swipes on a screen, and your data will be seamlessly backed up to the cloud. When an issue arises that needs an immediate answer, you will have access to the files and data you need, no matter where you are. You can also use customer management software on your devices to improve customer support and communication. Through your CRM software and increased connectivity via mobile devices, you can build better relationships with your clients.
With a smartphone or tablet and mobile device management from your I.T. support provider, you can take your office with you wherever you go. That means no more waiting until you get back to the office. That’s important because your clients are as busy as you are. They’re going to appreciate your work even more when you can deliver critical answers at the moment when they need them. And, that appreciation drives increased customer loyalty.
5. Specialized Accounting Software
One by one, accountants are doing away with the traditional pen, ledger, and desk calculator. There now exist more efficient processing tools and specialized accounting software that allow quicker input and computation of data. Even the act of manually entering information into software is declining as scanning technology makes it possible to simply photograph a page and let the software complete the relevant fields itself.
It is important to be precise in your computations when doing accounting work, and having all your information calculated by a computer has drastically improved accuracy and reduced the margin of error. Think about what happens when you have even a slight error:
Accounting software has virtually eliminated the sources behind these small but significant errors.
It has also shifted the accountant’s focus from nitty-gritty details to the issue their clients care about most—how to protect and grow their business. In the process, it has turned one of the most traditional of white-collar industries into a fast-paced and dynamic profession.
Accountants in the Age of Advanced Information Technology
As an accountant in today’s world, it is necessary to stay up-to-date with the most recent advances in technologies to be competitive and increase your productivity. Take the challenge and look further into all the intriguing ways technology has changed the accounting industry. Embracing these changes will prove to be greatly beneficial to both you and your firm.