How Will Technology Change Accounting in the Future?

As technology rapidly advances, industries must evolve and adapt to remain competitive. If you are currently working as an accountant or are interested in accountancy, you must be comfortable and confident utilising modern technology to shape the finance industry.

 

What Is Accounting Technology?

Finance and accounting companies know they must implement new digital technologies into their workplace. Artificial Intelligence (AI), automation, data analytics and more advanced accounting software can improve working processes and results of accounting organisations, leading to enhanced productivity.

Working in finance today differs from working in finance 10 years ago, and modern accountancy job roles incorporate several new digital products and advanced finance-related software. Working at a bank, for example, will now incorporate using modern forms of digital-based customer service and communication. Both employers and employees must move with these times and get to grips with changing technologies to retain a competitive edge.

 

How Do You Choose the Right Accounting Technology?

With technology evolving daily, it is essential to choose the right accounting technology to maximise productivity, accuracy and efficiency in the workplace. Today, technology is tailored to modern accounting practices, providing opportunities for automation and improvements in overall performance.

With so much technology, how can companies choose the most suitable accounting technology?

Companies must seek secure cloud-based accounting technology to allow accountants to exchange files, assign tasks and work with clients and staff. Prior to this, companies should review the current processes and identify what needs optimising, such as client onboarding or learning materials.

While testing various accounting technology, companies must consider factors such as price, scalability, training and system characteristics before implementing accounting technology into everyday processes.

 

Future of Accounting with Technology Transformation

 

1. Technology will support, not replace, accountants

Automation is being utilised to improve accountants’ work rather than replacing them. Modern technology in accounting enhances efficiency and can perform time-consuming tasks like data entry. This also eliminates the issue of human error.

2. Accountants will be able to offer more value

Another benefit of adopting account technology is more in-depth analysis. Accountants can utilise data to offer insight into current trends and forecast problems that may arise. This contributes to evidence-based, data-driven decision-making.

3. Advanced ways to present data

Data visualisation is a useful tool for any business. This area provides the opportunity for accountants to present information creatively, leading to more efficient internal and external communication as people with different learning styles can see data presented in various ways. Better communication will lead to more efficiency within the business, and if more people can understand what is going on, it will lead to more informed and effective decision-making.

4. Accounting skills are evolving

As mentioned, advancements in digital technologies have led to significant changes to the skills required by finance professionals. It is important for accountants to develop skills in digital technologies, including data analytics, automation and coding, which can help them work more effectively. However, it may not be necessary for every accountant to be an expert in all these areas, as different skill sets can complement each other. It is essential to be open to these changes and learn how digital technologies can be used to increase performance.

5. Recruitment and retention transforming

Tech-savvy young adults are used to new working styles, and employers may find a generational divide between junior, and senior staff. Companies lacking digital advancements may find it more difficult to attract and retain younger workers. On the other hand, if a company focuses too much on digital technologies, more experienced accountants may be less interested. It is important for accountancy companies in the finance industry to appeal to all skill levels and remember that different people offer different tools.

 

Required Skills for Future Accountants

With new accounting technology comes new skills for accountants to learn and develop. These accounting skills enable professionals to seamlessly transition into a new era of accountancy where technology plays a central role. An increased demand for automation, data analytics, cloud-based software and AI in accounting means accountants must gain new skills to stay relevant and updated in today’s evolving landscape.

Here are the top five accountancy skills:

1. Technical proficiency
2. Analytical skills
3. Strategic thinking
4. Communication
5. Visualisation

 

Emerging Accounting Technology

Every day, new technology is being developed, and these advances are taking accounting to new levels and opening doors to different ways of working. Some of the most prominent technologies emerging in the accounting field are:

1. Cloud computing

Often perceived as an abstract storage space no one can quite get their head around, the cloud is a tool that allows instant access to resources, such as data and computing capabilities. One vital feature of a cloud-based system is the continual updating of information. In terms of finance, this allows accountants and clients to view and analyse data and make data-informed decisions using updated information.

2. Automated accounting tasks

Accounting can include time-consuming and menial tasks, including, audits, tax preparation, banking and payroll. Many companies have shifted to make these tasks fully automated. This trend is set to continue with, repetitive and time-consuming jobs being completed by machines to prioritise, analytical tasks for workers.

3. Blockchain technology

This is a computer-based recording system which uses cryptocurrency within a user-to-user network. Blockchain gained popularity through its connection to Bitcoin, but the technology has progressed substantially. Blockchain is appealing to accounting because it offers the possibility of a new type of accounting ledger.

 

Benefits of technology in accounting

As you can see, there are many exciting changes and technological advances in the accounting industry. Some of the benefits of incorporating modern technology into an accountancy firm are:

• Time management: When the responsibility of menial tasks is shifted onto computers, employees can focus on more important tasks such as managerial duties, critical analysis of trends and decision-making.
• Increased productivity: Technology is used to streamline processes within accounting, meaning the workflow runs smoothly and work is completed efficiently.
• Accuracy: Using AI to work through data eliminates the issue of human error and can give more accurate insight into a problem.
• Security: Accountancy firms often hold a lot of sensitive information, and there are many advanced platforms that allow you to store and protect data with little risk.

 

Future Trends in Accounting: AI And Technology

Technology continues to shape the future of accounting, and the advancements in AI and automation have fuelled most of the future trends in accounting. From blockchain technology to ethical accounting, technology in accounting has had a huge impact on the wider business landscape.

So, what are some accounting technology trends shaping the future of accountancy?

• Automation and AI – The rise in technology in accounting has been led by the increased dependency on AI and automation. From AI-driven audits to workflow automation, the industry has been revolutionised by automation and AI in accounting and will continue to improve efficiency within the workplace.
• Globalisation – The increased automation in accounting has led to a more globalised accounting landscape. Technology transfers across borders, allowing professionals worldwide to offer their services to global companies.
• Ethical accounting – The use of technology in accounting has led to more emphasis on the ethics of finance and accounting. Ethical and sustainable accounting practices are growing in importance as more companies focus on environmental, social and governance (ESG) initiatives.
• Chatbots – More accounting and finance companies are turning to chatbots to provide information and support services to the public. Chatbots are useful for assisting with routine accounting practices and directing users to their desired destinations.
• Predictive analytics – One of the most prominent accounting technology trends is predictive analysis. This technology processes and analyses financial data to provide insights into future trends. Predictive analytics encourages data-driven decision-making processes.
• Cloud-based software – Cloud-based software integrates with other cloud-based systems to streamline processes like invoicing, management systems and human resource information. This trend is likely to shape the accounting and finance industry to provide in-depth company insights.
• Blockchain technology – Although the buzz around blockchain technology has mellowed, it is still predicted to play a role in the future of accountancy. Its accuracy and security are essential for financial transactions, reducing fraud risks and increasing transparency.

 

Technology Changes That Will Shape the Future of Accounting

Following on from the future trends in accounting, the advancement of technology is shaping the future of accounting. Cloud technology, automation and blockchain are leading a digital revolution, helping progress the accounting and finance industry.

The cloud provides a secure platform for accountants and clients to share information, replacing the physical storage of files and in-person meetings. The security of financial information is paramount, and the cloud ensures a secure, risk-free process.

Automation is also a big player in the future of accounting. Manual tasks have been seamlessly automated by utilising AI. This increases efficiency and productivity across various accounting functions as accountants continue to integrate AI into everyday practices.

Blockchain technology also provides security by reducing the risks of fraud and inaccuracies during financial transactions. Offering real-time access to financial data through automated reports, blockchain is an important part of the future of accounting.

 

Impact Of Modern Technology on Accounting

With manual bookkeeping a thing of the past, the accounting industry continues to adapt and grow, combining professional expertise with modern technology. The transformative impact of technology on accounting has led to many benefits across the finance sector and continues to play a role in the future of accounting.

In addition to benefits, including improved efficiency, accuracy, security, decision-making and scalability, modern technology has impacted the workforce by instilling a lifelong learning approach to accounting practices. Accountants are learning to integrate modern technology into everyday tasks, providing new skills and knowledge to champion lifelong learning.

Modern technology also reduces costs for companies of all sizes. Automation and AI reduce physical processes, which saves money and time, allowing accountants to focus on more strategic tasks.

The flexibility and opportunities that modern technology has provided have also had a significant impact on accounting. Cloud software has increased globalisation and accessibility for professionals worldwide to collaborate and share their expertise.

 

What Are the Challenges Smaller Companies Face in Adopting Advanced Technology?

Despite many benefits of integrating advanced technology into the finance industry, smaller companies may face challenges navigating and utilising the new technology.

The cost and time savings, alongside the extensive insights that advanced technology offers companies, make it sound like a simple decision to transition into the digital accounting era. However, there are a few challenges that smaller companies must consider before jumping on board.

• Cost – The most pressing issue for smaller companies implementing advanced technology is the cost of installing and maintaining the technology. Smaller companies may be limited when it comes to affording the latest technology and the costs associated with the implementation and training of staff.
• Technical expertise – Smaller companies are less likely to possess the in-house technical expertise to invest in advanced technology. Hiring external experts to train accountants and install the technology is costly and time-consuming, while employees develop the required skills to feel comfortable using the advanced technology.
• Implementation – While implementing advanced technology, smaller companies may face various issues, with the compatibility of existing systems. Overhauling physical processes can lead to a challenging transition with additional customisation often required.
• Scalability – With so much technology, it can be challenging for smaller companies to select the most suitable technology that will have short and long-term benefits. Due to the significant investment in advanced technology, smaller companies must strategically decide what technology to implement. 

 

Key Competencies for Accountants in The Evolving Business Landscape

As well as various accounting skills, including technical proficiency, communication and strategic decision-making, finance professionals must be aligned to the future of the accounting industry and lead business change to maximise overall performance.

Some of the key competencies for accountants include:

• Global outlook – Advanced technology has increased the globalisation of the finance sector, which increases collaboration between professionals worldwide and provides international opportunities for accountants.
• Growth mindset – Finance professionals must adopt a growth mindset while surrounded by innovation and evolving technology. Accountants must adapt to constant advancements and champion lifelong learning to develop new skills and knowledge to increase performance.  
• Ethical judgement – With the advancement of technology, there is a greater need for finance professionals to consider the ethical implications of handling sensitive information. There are some concerns with ethical practices when using AI, so accountants must responsibly handle sensitive data and ensure they make ethical decisions.

 

If you want to be a successful accountant, you will need to develop your technological skills. Future accountants must be digitally savvy to evolve with the industry.

As more companies prioritise technology, transport their information to cloud-based systems, and incorporate digital processes in their workflow, accountants need to become proficient in various technological areas, while retaining the traditional accountancy skills and knowledge.

Enrolling on an advanced programme such as one of the London School of Business and Finance’s ACCA courses can provide the skills, knowledge and practical experience required to become an effective accountant.

Learn more about LSBF today.