Digital transformation is an inevitable trend that appears in almost every type of business today, and accounting is no exception. Accounting operations are changing significantly to adapt. This trend can be described as the Digital Accounting Era, where traditional operations gradually become obsolete and replaced by modern technology. So what do future accountants need to do to succeed in the Digital Accounting Era? This article will give you the answer to your question.
What is digital accounting?
Digital accounting doesn’t have a standard definition, but it merely refers to creating, representing, and transferring financial information in an electronic format. Instead of using paper, all accounting transactions are manipulated and transmitted in an electronic environment.
Digital accounting doesn’t eliminate the role of accountants or reduce the importance of accountants in the business. In fact, it values and empowers accounting professionals by making their work more proficient and effective. AI, cloud-based systems, and accounting task automation have left their marks on accounting practices.
There are various reasons that more businesses are choosing digital accounting instead of traditional accounting today:
- Time and cost-saving: In medium and large-sized businesses, even a skilled accountant may need to spend up to 4 days operating invoices such as reading, putting data to Excel tables, verifying information, etc. These tasks may require hours and a lot of energy to complete. It also can cause error and fatigue during peak days. With the development of new technologies, such as RPA (Robotic Process Automation), most data is automatically handled by digital tools, leaving no room for error and fraud. It is much cheaper than labor cost and helps businesses wrap up these tasks in a shorter time.
- Accuracy and scalability: For a long time, manual processes have been a constant in various finance functions. Today, going paperless is the new standard as it is faster, cost-saving, and reduces errors. Digital accounting takes over manual accounting processes, from making statements, reports, invoices, budgeting with an undeniably accurate result.
- Easy access to financial information: A cloud-based system gives accountants, businesses, and other related departments the ability to access their data information at any time, from anywhere within an imperative. It means that you no longer need to be at the office or carry tons of paper to access crucial information. It is particularly helpful in managing and analyzing cash flow, making prompt and accurate decisions, and having better control over the input and output of the business.
For example, Shoeboxed is an expense & receipt tracking platform that helps accountants get reimbursed fast and maximize tax deductions. By receiving customers’ receipts by mail or scanned documents, extracting the most important data to one organized place for easy and at-a-glance expense tracking, Shoeboxed allows customers to view and export their data anytime and organize them in their categorizations. This is by far the most effective way to organize and store businesses’ financial data for years to come.
- Data security:
Data safety is a top priority of many businesses when cyber-attack continues to rise. Digital accounting software has extra security layers, such as authorized access, two-factor authentication, and regular backup. This brings businesses better protection to their financial data.
- Convenience and improved productivity:
When an accountant is free from doing time-consuming, energy-wasting tasks, he can spend more time developing strategy, analyzing data collected by technologies, and focusing on tasks that require creativity and ingenuity.
As digital accounting has remarkably changed accountancy and brought various benefits for businesses performing accounting operations, it is more important than ever for future accountants to adopt digital accounting. Digital transformation requires accountants to have creativity in accounting tasks, stay ahead of the curve and constantly search for new solutions. Strong knowledge of modern technology helps you adapt and stand out in an era where technology takes over traditional accounting tasks. Chief Financial Officer (CFO), finance leaders, and accountants will need to be greater at planning strategically, organizing, foreseeing, and adequately channeling their financial processes.
However, it is simple to start your digital accounting journey with a clear plan.
5 steps for accountants to succeed in the digital accounting era
1. Learn and practice technologies simultaneously
During the pandemic, we have seen that technology is one of the most rapidly growing sectors. Many businesses depend their lives on the development of technologies. Many business owners had to figure out a way to cope with the pandemic – going to digital transformation is one of the most effective ways. According to researchers, the accounting sector is greatly affected by the Fourth Industrial Revolution in general, and the digital transformation trend in particular. You will be in a great position if you have the necessary skills to support this rapid transformation and master new technologies. On the other hand, lack of digital skills will also become a weakness once opportunities in this sector become narrowed, and the demand for traditional accountants and auditors will decrease. Therefore, every future accountant needs to emphasize data management, system monitoring, and consulting skills to beat other competitors.
2. Be able to analyze and present data effectively
It is important to know the way around technology, but it is even more important to make the most out of the financial data with the help of digital transformation. Changing the way you generate, analyze, and present data can be challenging because you need to think and work in a different way. However, if you keep your mind open and always stay innovative, you will soon get adapt.
Especially in the time when digital transformation takes over most of the manual tasks, accountants will be free to discover and develop themselves more with the strategy and creativity in accounting – things that digital accounting can not provide yet.
3. Cultivate strong critical thinking and communication skills
Future accountants need to ask the right questions and tell powerful stories to help people make accurate decisions. A combination of an inquisitive approach, powerful storytelling, the ability to leverage technology, and a deep understanding of business support, will help you achieve a firm position at any business.
Just leveraging technology is not enough – you also need to integrate it with your existing knowledge and experience. While learning new solutions to your daily tasks, you should make a list of your expectations. Add what matches the task requirements or the software tools to your list and narrow down your final options. This way helps you not to be overwhelmed by the ocean of information.
At the same time, you need to enhance the ability to observe, analyze and predict the data and information that digital transformation provides. This ability helps you to make accurate judgments for the business or conduct decisive strategies.
4. Be willing to discover and learn new technologies
Among all the necessary skills for a successful future accountant, agility is perhaps the most critical. Agility is about how flexible you are for a new organization, a process, or even a new change. Embracing agility means considering learning as a continuous process throughout our career. It would be best to remind yourself that the more you learn, the better you adapt to this evolving world. When you are agile, you are also more well-prepared for new opportunities. Signing up for digital courses, subscribing to technology newsletters, or simply taking notes on new knowledge when surfing Facebook… the way you learn is unlimited.
5. Seek opportunities in tech-based companies
Tech-based companies know that technology is the future, a long-term investment. Working with digital technology helps many processes reach greater effectiveness and efficiency and drive you to the greatest results. When applying to tech-based companies, you will have a chance to observe and have hands-on experience in the smartest and most efficient way. You will also have access, be trained, and practice with the most modern software, helping to free employees from daily manual tasks and boring routines. The environment at tech-based companies is also extremely open and creative. This is an effective way to keep yourself innovating every day.
Digital transformation has significantly changed the way that accounting works. With evolving customer expectations, technology development, stiff competition, and a higher demand for high-quality laborers, future accountants need to constantly learn, innovate and cultivate the most modern technology to stay on top of the game and succeed in the era of technological accounting.
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