Digital transformation is the integration of technology and digital applications into a business’ processes, with the main goal of increasing operational efficiency, enhancing the experience, and satisfying customers. Moreover, digital transformation creates a huge competitive advantage for businesses in the market.
Accounting is no exception. The future accounting profession has moved far beyond mere bookkeeping and payroll, as well as purchasing procurement. Technologies such as cloud-based data management, process automation, and artificial intelligence are unlocking businesses’ numerous potentials and elevating accountants’ skills.
1. How digital transformation affects the future of accounting
Leveraging the cloud
“Working in the cloud” is a noteworthy working trend in the future of accounting. Forbes points out that cloud accounting is experiencing rapid growth as new intelligent technologies like the Internet of Things (IoT), Artificial Intelligence (AI) and machine learning permeate the market. Since cloud-based accounting integrates information into a cloud system, accountants will no longer need to keep tons of paper stacks to save business data! A cloud-based accounting system enables instant access to various data resources and computing capabilities. A significant benefit of the cloud-based system is the continual updating of information. It also allows accountants and clients to analyze data and make decisions based on cutting-edge information. According to the Journal of Accountancy, cloud-based technology also monitors information constantly, instead of intermittent analysis, whenever the information is updated to the system.
Various statistics carried out by cloud-based enterprises have proved that by 2020, by 2020, 78 percent of small businesses will be relying solely on cloud technology for accounting. Especially during the time of Covid-19, there is an increasing number of businesses investing money in virtual working technologies.
An example of a cloud-based accounting system is Shoeboxed. Used by millions of SME businesses worldwide, Shoeboxed helps accountants get reimbursed fast and maximize tax deductions by tracking customers’ expenses and receipts. How does it work specifically? Shoeboxed receives customers’ receipts by mail (with free delivery) or scanned documents (with our mobile apps, available on Apple Store and Google Play Store). Then, Shoeboxed extracts the most important data from customers’ receipts to one organized place for easy and at-a-glance expense tracking. Customers can then view and export their data anytime and organize them in their categorizations. Shoeboxed also ensures that all of your receipts are legibly scanned, clearly categorized, and easily located. Shoeboxed proudly helps customers free their desks and drawers from paper receipts and brings the best solution in document storage for years!
Accounting task automation
A medium to a large-sized company may have to receive hundreds, even up to thousands of input invoices per month. It may take skilled accountants approximately 3 minutes for each operating step, such as reading, putting invoices to Excel tables, verifying information with the General Department of Taxation, synchronizing data on accounting software, and storing documents in the business’s standards.
With the development of new technologies such as RPA (Robotic Process Automation), AI (Artificial Intelligence), OCR (Optical Character Recognition) in the 4.0 era, the daily, manual accounting operation at enterprises no longer needs human participation. The accountants will no longer need to spend hours and waste energy handling accounting tasks manually, which may cause error and fatigue during peak days.
Here are some examples of applying RPA in the future of accounting:
- Manage Accounts Receivable: Bots can manage customers’ key files and credit approval, purchasing process and collect revenue.
- Manage Accounts Payable: RPA helps to transfer incoming invoice information (such as invoice number, received data or amount) from PDF files to SAP web applications and internal spreadsheets. This is a useful application that can reduce the invoice processing time by up to 60%.
- Cost allocation: RPA easily combines data from different sources (emails, Excel spreadsheets, Google documents, etc.) into one master file, then upload directly to the ERP system. The software can do these actions in a short time (i.e., under a minute).
- Financial close & Financial reporting: Financial closing and reporting are decisive aspects of all businesses’ success. Ideally, a well-executed month-end close should be fast and smooth and take about three to four days to complete. Using RPA, in this case, brings businesses a successful month-end close and helps improve organizational performance. By automating all the workflow steps, an accountant can simplify the transitions between each stage of AP, centralize all AP operations, and preserve all payments and approval details together. With RPA, accountants can save time, prevent fraud and reduce errors in doing financial close reporting.
Artificial Intelligence (AI) is one of the high technologies that enable a computer to do decision-based tasks previously conducted by humans. AI comes in multiple forms and in many aspects of life. Like machine learning, the more you use AI, the better it gets at data analysis and decision-making. The most common uses of AI in the future of accounting include automating tasks, machine learning, basic task automation, fraud detection, service investment, and deterministic loan approval processes.
2. The future of accounting jobs with digital transformation
Technology will support, not replace accountants
The global workforce, especially accountants, may be concerned that technology will replace their jobs in the future of accounting. Even the most professional auditor may fear that they will lose their job to AI-powered machines. This is a common fear, however, according to the U.S. Bureau of Labor Statistics, the future of accounting jobs shows positive potentials with the prediction to grow by 4% between 2019 and 2029.
In the future of accounting, AI technologies such as Machine Learning will support accounting and finance professionals to perform their tasks more efficiently. We can understand that AI supports the human workforce, but doesn’t steal their jobs.
For example, AI drives straightforward processing, frees accountants from stressful and tiring tasks. In the meantime, they can spend more time interpreting and analyzing data collected by AI, and provide better-consulting services. To explain in a simple way, AI allows accountants to focus on tasks that require creativity, strategy, and ingenuity – features that AI can not really provide yet. So in the future of accounting jobs, manual tasks will be handled automatically and intelligently by AI, helping accountants perform their job in a modern way.
Future of accounting profession: More intelligent, strategic, and creative than ever
As Accounting Today has stated, “as with any evolution, whether Darwinian or technological, those who aren’t willing to adapt risk being left behind.”, accountants must keep moving forward. Future accountants must have the strong technical knowledge and necessary skills to perform the administrative, managerial, and analytical tasks that technology can’t do. For example, when more companies use the cloud-based system, accountants need to be proficient in using the cloud to analyze, manage, and transfer financial data. They can use their uniquely human skill to transform the insight from high-quality data collected by AI and provide more effective, realistic financial planning and reporting. They can also collaborate with peer businesses to leverage financial data to drive innovation, build more resilient and agile supply chains and develop business management plans that promote growth while ensuring continuity.
As automation becomes a major aspect in the accounting sector, all future accountants must develop the technical knowledge and skills to handle tasks that technology can’t do. Accountants may also need to take on an advisory role with clients, which requires them to analyze big data and trends. In this case, a data-driven mind is a key to success in the future of the accounting profession.
The future of accounting is undeniably changing with intelligent technology. Future accounting jobs will require accountants to be eager, adapt quickly, and evolve alongside the business. Don’t let yourself be left behind – start your business’s level of proficiency in the future of accounting now with Shoeboxed.