How Technology Is Shaping the Future of Accounting

For much of the past quarter century, accounting has been relatively slow to embrace technological change. Yes, paper ledgers gave way to spreadsheet applications. And, eventually, CPAs and accounting professionals were able to share those spreadsheets via email or shared drives. In time, they uploaded them to cloud-based databases or onto content management systems so that multiple stakeholders could access and work on the same documents.

Compared to the days of dealing with wall-sized filing cabinets, rifling through stacks of receipts stuffed in shoeboxes and tracking down errant paper documents, these advances seem huge. But with the increased use of AI and other automated processes, many analysts expect that technology could do more than just change the way we do accounting; it could change the very role of the accountant within the organization.

In a report published earlier this year by Forbes, Jean Baptiste Su predicted that by the year 2020, many of the standard accounting tasks, including banking, payroll, and tax and auditing, will be fully automated, disrupting the core of the industry and forcing it to adapt to these advancements.

'Having machines to do all these tedious and repetitive tasks could sound scary for many accountants because they are also very time-consuming and thus very lucrative,' explained Stephanie Weil, CEO of Accounteam, a Silicon Valley-based accounting firm. 'However, if the AI system is well configured, it can eliminate accounting errors that are generally hard to find and thereby reduce our liability and allow us to move to a more advisory role.'

This move toward becoming an advisor, rather than simply a service provider, gets echoed by many other industry forecasters. According to Mike Galarza, the Association of Chartered Certified Accountants has long been warning accountants of the need to future-proof their positions. Strangely enough, the way to do this is not just by embracing technology. Rather, the path forward that many industry watchers seem to see is one in which accountants both leverage the advantages of technological advances and practice the soft skills of communication and collaboration.

Specialization Is the new Differentiator

So if AI and machine learning are on their way to taking the counting out of accounting, what is left of the profession? One of the many trends for accounting firms of the future involves creating distinct professional specializations. Rather than trying to serve as a generalized accountant, able to provide all services to all types of clients, accountants are going to need to drill down into their unique qualifications.

As UK accounting expert Mark Lee explains, 'Accountants will become more like lawyers in the future.' The most successful ones, he explains, 'will specialize and niche their practices' focusing on specific areas of tax and business coaching. For example, in recent years, the changes to U.S. health care laws have caused an increase in the need for accountants with experience in compliance work and internal audits. These specializations look to continue to be in strong demand moving forward, as companies continue to navigate the tumult of healthcare policy. Another example of specialized accounting is the investigative accountant. Investigative accountants use their knowledge of how money moves and changes in order to trace fraudulent practices back to the bad actors.

The compliance accountant and the investigative accountant each will use the expanding technologies to their best advantage. Entity management software makes it possible for an accountant focusing on compliance to keep constant updates as to new regulations and changes in governing practices. The same software can help an investigative accountant understand and trace a corporation's organizational structure through the use of its data visualization applications. Both specialties show how accountants are going beyond their typical job descriptions and adding demonstrable value to their positions.

Working on the Inside

Accounting can often feel like a service-only department, existing outside of the C-suite decision-making realms. For accountants to remain relevant in the future, this needs to change. Accountants need to diversify and support the C-suite teams they serve. They will have to move beyond simple accounting tasks and bring their hard-earned business acumen to bear on interpreting the company's financial status and answering the tricky questions as they arise. The goal here is to become less of a bean counter and more of a financial advisor. Accountants know better than most the complexities of finance and the necessities required for business survival. If they want to become more of an insider, they'll need to know how to communicate these ideas in ways that are productive and useful.

In that regard, technology can help. No financial service app is going to improve your delivery or help you choose the best way to broach a delicate subject. But advanced accounting technologies like entity management software can give you the confidence that your insights are backed up by precise and verifiable data. Entity management software offers improved data analysis capabilities and easy-to-use data visualization applications. Combined, these tools can help accountants share what they know with executives and other shareholders, transforming them from members of a service department to valued financial coaches.

Be Prepared to Be Anywhere

As more companies spread their operations to far-flung corners of the globe, the need for versatile and flexible workspaces will continue to rise. This is no less a factor within the accounting industry. But a decentralized workplace does not have to be a disorganized one. The last thing any account wants is to have to track a document down from across the office, much less across the globe. Luckily, cloud-based technologies remedy those problems. And advanced entity management software makes using the cloud easier than ever. All data, including financial reports and accounting files, is centralized and secured by role-based usage protocols. Entity management software can keep track of local variations of regulatory codes and offer country-by-country reporting and automated translations services so that working across the world can be as productive as working across a desk.

Toward Tomorrow

Advances in technology are reshaping the traditional role of the accounting department. Accountants of the future will be more flexible and mobile, with specialized areas of expertise and the ability to act as advisors. For more information about how technology can help your accounting department evolve, contact Blueprint today.