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Role of Tech in Accounting: Unlock Long-Term Growth in 2021
With continual developments in technology, today’s business landscape is not the same as before, and it is continuing to change. In fact, in the tough times brought about by the COVID-19 pandemic, technology is reshaping industries and businesses.
It is transforming several systems and processes that companies manage to run their business, helping to convert manually performed functions into automated tasks. This blog will discuss technology’s role in transforming business accounting services, helping business owners handle their finances more effectively and efficiently.
Many CFOs and accountants today feel automation’s and high-tech systems’ impact on their business. According to one report by Sage, 90% of accountants surveyed feel a cultural shift in accountancy, which is driving them toward emerging technologies. Source
Why do Accounting Firms & Businesses Need to Enhance Their Tech Stack in 2021?
In 2020, 46.6% of accounting professionals bought more than two new tech solutions, while 11% invested in four or more new technology platforms (Source).
Thus, we can say that the pandemic situation has been a significant reason for this change, and it can turn out to be highly beneficial in the long run. Similarly, there are many reasons financial services firms should adopt performance- and productivity-boosting technologies in 2021; a few of them are explained below.
1. Save Time & Money
Every firm’s digital journey is different than the other; however, this global experiment of an unplanned shift to remote working has played a crucial role in the rise of automation in accounting.
From time tracking to data entry, the accounting industry used to run by employees carrying out several tasks manually. Whereas now, especially during the pandemic, automation has shown its power to standardize, streamline, and speed up routine and rule-based processes, allowing accountants to get free from repetitive and time-taking tasks.
According to WorkMarket’s 2020 In(Sight) report, 54% of employees believed they could save almost 240 hours per year using automation. Source
In the accounting sector, the capability to deliver speedy services is a great business advantage. Hence, a shift to integrated, automation-powered processes has become essential for accountants and accounting firms to thrive in today’s market.
2. Foster Long-Lasting Client Relations
Previously, employees need different tools and platforms to access data and utilize solutions. This had created a need to migrate multiple technologies to a centralized cloud-based system and was a necessity for survival. This shift toward technology today has resulted in a rise of industry-wide connected ecosystems that are enhancing efficiency, productivity by automating manual tasks, streamlining operations, and bringing valuable insights.
With the saved time in hand, accountants can now focus on value-adding aspects, for instance, financial analysis, forecasting, service improvement plans, and building, maintaining better, stronger relationships with clients.
Therefore, investing in technology will not only help your staff to manage higher-value functions but also give them more time and opportunities to improve new skills they can use for business growth and client satisfaction and retention.
3. Attract Tech-Savvy Talent
Technology adoption will help you not only keep your existing clients and employees happy but also attract the new generation of professionals entering the workforce.
In the U.S. alone, people belonging to Generation Z are a quarter of its population. By the end of 2020, they were estimated to be around 24% of the workforce worldwide. This new generation’s entry into your workplace requires you to rethink several internal structures and values – all starting with tech.
According to a study by Dell Technologies, 91% of Generation Z respondents said the technology would influence their job choice, while 80% said they want to work with cutting-edge technology in their careers. Source
Thus, to attract the new generation of talent, your accounting firm needs to sync in with Gen Z’s technology expectations.
Technology’s Growing Impact on Accounting
1. Cloud is Empowering Accounting
For years, accountants have faced numerous challenges, including processing delays, errors, mistakes, repetitive tasks, and the absence of a systematic process to deliver excellent client service. Technological advancements have brought opportunities for accountants to get over these frustrating difficulties and bring revolution in accounting practices.
Pre-accounting digitization means automating consolidation and conversion of unstructured financial data into valuable reports about financial risks and opportunities. On the other hand, automation helps streamline the bookkeeping process, assisting the accountants to complete their job more accurately and faster.
Cloud technology is the powerful tool that allows access to such highly efficient technologies to enhance the entire accounting process. However, that’s not enough. Technology helps you with change management, where the real struggle begins.
2. Technology Adoption is Important for Change Management
Many accountants find technology adoption a risky deal. However, the impact of technology in accounting will ultimately come down to change. If you are ready to adopt new technology for your accounting firm but are reluctant due to having doubts, you may start by investing in a small technology or platform to feel the difference and proceed further step by step.
Change starts with experiment and innovation; if you look around, you might find that many of your competitors that started investing in technology years ago are now in a good position in the market. Thus, saying change begins with digital transformation makes sense.
When it comes to change management, what you can do to set your firm to strive toward success is revaluating your operations, processes and improving them, replacing outdated systems with new, advanced technology.
3. Data Utilization Becomes Easier
When your accountants are given the job to evaluate data, you can understand how quickly it can turn into a burden. Technology can help unburden your staff. Your client’s cash flow statement and a balance sheet can speak a lot about their business’s financial health. But this information would only be helpful if your accountants know the importance of these numbers matter and how to connect the dots.
Technology such as Artificial Intelligence can help your accountants understand what the financial information (patterns, insights, risks, opportunities, etc.) indicates about the client’s business and how it can help them with financial management.
When you use automation and AI for data analytics, it can help respective accountants bring out helpful facts that can help clients a lot, for instance, forecasting and preparing budgets.
4. Changing the Future of Accounting
In the years to come, the accounting will become more connected, which means it will be common to use technology to connect different tools, creating an ecosystem. This will trigger a change in accountants’ fundamental skills, and thus, the entire business model will shift. Digital transformation cannot be done overnight, but technology can help you do the same a little faster.
In the coming five years, technology is likely to repower the accounting sector. Some best practices of accounting will change forever; for instance, even today, accountants no more need to wait for a bank statement to be posted so that they can work on reconciliations; processing time will be less as speed will be faster. It will be common to close books in the month-end without delay.
The Bottom Line
The level of support provided by technologies to accountants last year cannot be overlooked. It enabled them to act immediately, meet ever-evolving client demands, be highly efficient, flexible, and valuable, even amidst a global pandemic.
While the impact of technology will be remembered in 2021 and beyond, it will prove to be more important as businesses around the globe enter the next growth phase. Here, accountants will need to utilize technology to support clients, helping them meet their financial objectives.
Technology is here to make every accountant’s job easier. It helps them do their jobs faster and effectively while reducing errors. Being a business or accounting firm owner, do you want to use technology for your business? Are you ready for digital transformation? If not, call our experts today to know how we can help you utilize accounting technology at its best.
Cogneesol, a globally recognized accounting services firm, offers a variety of accounting services for businesses and CPA firms worldwide. Learn more about our effective and customized accounting solutions; call us at +1 646-688-2821 or email at [email protected].
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