Do you remember the episode in The Office where the three accountants were trying to find the missing $3,000? They suspect every office member of stealing the $3,000, only to realize that it was just an accounting error. Veteran bookkeepers and accountants will relate to this, as these types of incidents happen very frequently—and it’s not just accounting. Many other business processes are prone to errors when you’re using labor intensive and time-consuming manual methods.
Seeking productivity optimization, just like any other profession, the accounting profession has also turned to adaptation of technology. From a supporting role, to maturing into business advisors and consultant’s role, we have seen a radical change in the last decade. Research suggests that technological literacy is the top skill needed by an accountant today, and we are now required to adopt technology to support our advisory role in productive and efficient ways.
Digital transformation in the accounting world not only makes our lives easy, but also helps achieve accurate, detailed, and advanced data analysis for small businesses. What kinds of activities could be improved through a better use of technology? Let’s discuss the top few.
Real-time understanding of business performance
Now, more than ever, analyzing financial data to understand business performance is a top requirement for business owners. Today’s businesses require real-time data analysis to continuously monitor their product or service performances, in order to take corrective actions and make operational decisions.
Here are the advantages of using technology for real-time understanding of business performances:
- Reliable data
- Faster business decisions
- Realtime error detection
- Advanced reporting and dashboards
- Business agility
- Business efficiency
Being closest to their financial data provides accountants with an opportunity to offer their expertise. However, providing financial statements and comparative analysis at the end of their month does not satisfy the need of today's SMBs.
Today’s cloud-based accounting software is built on the value of real-time data, with advanced capabilities for connecting to various other programs supporting business operations. By connecting with point of sale systems, CRMs, payroll applications, expense trackers, and account payable and receivable applications, access to data becomes real-time. Dashboard and advanced reporting features available with cloud accounting software can showcase real-time financial and operational KPIs. Using these technologies, accountants now can support their clients by providing them with real-time data analysis.
Predicting future business performance
While understanding and analyzing the current business performances, forecasting can help anticipate and react to the change within the market. Forecasting allows businesses to measure future growth, make calculated adjustments, and develop and adopt strategies, with the help of deeper insights into future economic and environmental changes.
Comparing machine-based to manual methods of forecasting, manual methods are not only often time-consuming, inaccurate, and biased, but also require many man hours and are rife with human errors. While machine-based forecasting gives access to unlimited data and a more advanced approach, the advantages of automated methods of forecasting include the following:
- Access to unlimited data,
- Advanced and detailed approach,
- Better audit support as leaves trail,
- No limitation on the number of projects,
- Faster results,
- Accurate and free of human errors,
All four phases of forecasting can use the help of some automation and technology:
1. Collecting source data,
2. Analyzing data,
3. Creating strategies and basis for projection.
4. Comparing forecasting models to outcomes.
Today’s forecasting tools use automated data capture and analysis methods, including artificial intelligence (AI), web data capture, QR codes and bar codes, optical character recognition, intelligent character recognition, intelligent document recognition, and optical mark recognition. Today’s tools use advanced forecasting techniques that help business owners make informed and calculative business decisions. Accountants can take benefits of these technologies to support their business owners’ requirements.
Attracting and retaining staff
Enough has been said and written about today’s burning issue of hiring and staff retention. This has been considered the most stressful and mentally demanding aspect of all businesses and professions, including accounting. It takes a lot of time and money to prepare attractive job descriptions, create talent pipelines, handle advertising and marketing, and create brand awareness. But it doesn’t end here. Once hired, it takes equal—or even more time and money—to retain those talents. Measuring growth for recognition, providing an education and training infrastructure, keeping them interested, and creating a flexible and inclusive culture takes lot of work.
Technology has been breaking all these barriers by removing the grunt work. Today’s advanced hiring and management tools not only reduce paperwork, but also speed up the entire process of hiring. The advantages of technology to hire and retain talents include the following:
- Saves time and money.
- Instant access to information.
- Provides Instant access to regulatory compliance.
- Automates employee development.
- Facilitates monitoring and time keeping.
- Strengthens data security.
- Supports accurate and advanced evaluation.
- Increase overall administration efficiency.
Businesses that are ready to drive innovation by investing in emerging tools and technologies, such as cloud computing, mobile accounting, and artificial intelligence, also attract the best talents and creative minds. Tomorrow’s labor force will play a primary and strategic role in business growth because they will be able to take full advantage of data-driven technologies. Human resource (HR) software is becoming a tool no modern business can do without.
Paying staff and managing payroll
Due to the sensitive data involved with payroll and employee information, innovation in payroll has been somewhat sluggish. We see a lot of accountants and payroll managers still struggling with maintaining payroll data. We still see a lot of payroll activities done manually through emails, spreadsheets, and forms. Even though tools and applications have been used for payroll processing and recording, high-level timekeeping, collecting the data, and maintaining accuracy are still pain points without the help of technology.
Benefits of automated payroll systems include:
- Self-service hours tracking and timesheet preparation.
- Secure and faster data collection.
- Accurate and timely payroll processing.
- Easy access to compliance.
- Simplified tax process.
- Flexible and advanced reporting.
- Integrated record keeping and document storage.
- Centralized process.
Payroll automation simplifies and streamlines the entire process for the business users, as well as service provider accountants. By using powerful HR and payroll platforms and applications, you can automate and integrate all the processes, helping save time and money spent in tracking, processing, and compliance.
The role of emerging technologies
Accountants and bookkeepers are excited and terrified at the same time about the impending technologies, such as artificial intelligence and machine learning. While emerging technologies is rapidly changing the accounting profession, I think that it will assume a more supporting role and not replace accountants.
Leaving calculators and printed general ledger reports, we must develop a strong understanding of these technologies to boost our value in the industry and have a successful career for tomorrow. Research shows that accounting firms are heavily investing in technology, such as advanced and predictive analytics (21%), as well as automation, including robotic process automation (20%) and AI (20%).