Impact of Technology on the Accounting Profession
Technology has made an undeniable impact on the accounting industry. Before accountants had computers, they had to use calculators to manually reconcile financial documents against paper ledgers. Records were significantly less accurate than they are today, and calculation errors were difficult to catch.
The advent of computer-based accounting technology dramatically changed the accounting industry. The most significant technological changes occurred after accounting software became widespread.
How Has Software Changed the Accounting Profession?
Of all the information technology advancements that have shaped the accounting industry, software has had the largest impact. In the latter half of the 20th century, technology companies developed innovative spreadsheet software for accountants to use on computers. Instead of using handwritten ledgers and calculators, accounting professionals could now automate equations in an electronic spreadsheet. Spreadsheet software allowed public accounting professions to spend less time on tedious tasks and focus more on finding solutions for high-level issues.
Early spreadsheet software paved the way for more advanced technology, including automated accounts payable software and payroll and tax automation programs. Automated accounts payable software eliminated the need for manual data entry by pulling essential information from financial documents and entering that information into a database. Payroll and tax automation software streamlined human resource tasks by automatically calculating payments, applying tax rates, and storing employee tax information.
Recent Changes in the Accounting Profession
Over the past few years, accounting technology has advanced to adapt to changing needs in the workforce. Here are some of the major technological advancements that have impacted the accounting industry recently:
Cloud computing: With cloud computing, accountants rent server space in off-premises locations, and they access stored information over the internet. Cloud-based software systems free up space on accountants’ internal hard drives, and they allow multiple workers to collaborate on financial tasks, even if they’re in different places.
Enterprise resource planning (ERP) and customer relationship management (CRM) platforms: Most ERP and CRM platforms incorporate accounting technology. By integrating accounting processes into their organization’s existing system, accountants can keep track of hours, expenses, invoices, and payments. Additionally, accountants can more effectively communicate with clients and coworkers using ERP and CRM platforms.
Virtual communication platforms: Accountants often feel cut off from other members of their organization, and it can be challenging to relay financial information to coworkers. With cloud-based unified communication platforms like Microsoft Teams, accounting professionals can easily share information through chat, video, and voice.
Outsourced accounting: Many companies are choosing to downsize their accounting department and hire a third-party provider for outsourced accounting services. Outsourced accounting firms can employ the best technology and financial reporting processes at a low cost to clients.
Future Trends in the Accounting Profession
The recent technological changes in the accounting industry provide an indicator for new trends to come. Industry professionals expect the following technology advancements to change the future of accounting:
Artificial intelligence (AI): As accountants continue to focus more on high-level accounting processes, they are expected to turn to AI technology for further automation. AI can perform basic tasks and answer simple client questions outside of work hours, and in the future, AI might be able to automate more complex financial tasks.
Blockchain technology: Blockchain technology is currently known for its use in cryptocurrency, but it might enter the accounting world in the next few years. Blockchain uses an extensive network of computers to create a highly accurate virtual ledger of accounting information, and it might change the way that accountants store and analyze data.
Preparing for the Future of Accounting
Accounting is an ever-changing industry—technology providers are constantly releasing new, innovative accounting technology that changes the way accountants do their jobs. To keep up in the accounting sector, you have to keep up with technology trends. However, many businesses don’t have the time or resources to adapt to new trends.
At Rubino, we use technology to streamline our accounting services and provide the best financial assistance to our clients. We help small businesses, nonprofit organizations, government contractors, and clients in various other industries manage complex accounting tasks, including audits and cash flow management. As the accounting sector continues to evolve, we stay on top of industry trends and integrate new solutions into our services.
Contact Rubino today to learn more about our accounting technology solutions and outsourced accounting services.