The rate of technological innovation continues to accelerate across all professions and industries, and while tax and accounting has often been viewed as overly cautious and a somewhat slow technology adopter, the reality is that we are also being drawn into the relentless waves of technological change. While my primary role at Right Networks is consulting with firms to implement and benefit from innovative, proven, and currently available technologies, I spend a lot of time looking to other industries for evolutionary technologies that could make their way into the accounting profession and bolster our firm’s production processes.
Here are a few technologies to evaluate in the year ahead, as well as a number to be aware of that could significantly change our world in the decade ahead.
Workflow to ERP
Without a doubt, workflow tools that have integrated engagement tracking have been one of the most significant innovations improving accounting firm productivity in the past decade. While these applications were initially targeted toward tax production, we have seen them evolve and be used for assurance and administrative optimization. Unfortunately, recent pushes toward adopting advisory services highlighted weaknesses in these existing systems, which are not evolving rapidly enough to incorporate advisory projects, causing forward-thinking firms to look elsewhere.
Expect to see cloud-based solutions with robust enterprise resource planning capabilities to flow into our profession—if current accounting workflow vendors do not step up development of their own tools to address client accounting and advisory production.
The sophistication and capabilities of hacking groups are accelerating beyond the defense capabilities of most tax and accounting firm’s IT teams, so it is critical that firms make security solutions a priority by outsourcing to managed security providers with enterprise-class capabilities. While most firms are already using two-factor authentication applications, we anticipate an additional layer of security eventually being required, including physical fobs or biometrics (iris/fingerprint scan or facial recognition). Microsoft, Google, Apple, and even multi-factor authentication vendor Okta are promoting these alternate solutions that could replace current passwords for logins by eliminating them.
Firms have long relied on the Microsoft Office tools to improve productivity, and the accounting profession has embraced the Office suite to integrate with, and support, accounting applications. Throughout the pandemic, Microsoft enhanced their Teams platform, making it integral for collaboration within firms and with clients. Watch for an expansion of collaboration features in 2023, such as Bookings (scheduling), Excel Live (live collaboration in Teams), Lens (PDF scanner), Viva (employee-experience), and Clipchamp (creating learning videos) tool improve individual collaboration.
Most accountants are aware of the benefits of linking applications together with APIs (application program interfaces) to automatically transfer data for payables, payroll, and expenses directly into the accounting program as part of their firm advisory tech stack. Many of these tools claim to use artificial intelligence to automatically analyze, pre-code, and automate rote transactions. With the direction of accountants, the programming of the application can “learn” to handle specific scenarios when those scenarios occur again. We refer to this type of machine learning as augmented intelligence, because it takes the skills of the accountant to codify the scenario as evidenced by tools such as Vic.ai, Dext, Divvy, Tipalti, and others. Watch for such enhanced AI features to be added to tools integrating with your business applications, and plan to spend significant time in the next year learning to use them and roll them out for clients.
Accountants are adept at understanding financial reporting, and many have amazing skills in analyzing operational reporting for clients. One of the cruxes of developing advisory services is helping clients better understand their businesses and identify opportunities to improve them, accomplished by streamlining the flow and timeliness of business information. Financial reporting tools, including Microsoft Power BI, Tableau, and Domo, allow accountants to capture critical business information in near real time to assist clients in making better decisions on an ongoing basis, rather than waiting for reporting after month-end. When integrated with the APIs and data transfer tools mentioned above, accountants will be able to create dashboards and business scorecards to provide up-to-the-minute business results.
Most accountants are familiar with the Blockchain concept due to their or their clients’ forays into cryptocurrency. While cryptocurrency gets all the attention, the underlying Blockchain technology is being applied to conduct specific business transactions more efficiently—and we expect smart contracts and decentralized finance (DeFi) to become the practical implementation of Blockchain in the years to come. Smart contracts are agreements written in code on the Blockchain that are self-executing when terms between the contracted parties are met. They could, for instance, facilitate payments for services or convey title for property. The concept of DeFi allows for peer-to-peer transactions or exchanges (eliminating financial institutions) that are recorded on the Blockchain so they are trackable and irrefutable.
If you have ever used a smartphone app to look at the stars to see outlines and names of constellations on the screen, or used a heads-up display in your car that shows your current speed and the speed limit, you have experienced augmented reality. Imagine talking with a client and having current tax information projected on the inside of your eyeglasses by invoking “Alexa”- or “OK-Google”-like commands that are capabilities built into the next generation of smart glasses. These include Lenovo, Vuzix, Bosch, and Microsoft’s HoloLens 2.
Today’s video games immerse players in virtual worlds that allow them to explore freely and interact with others virtually on a computer screen, or be completely immersed with video headsets, such as the Oculus Quest that display a 360-degree view of a virtual world. These virtual worlds, often referred to as the Metaverse, are seeing investment by real businesses, including Walmart, Nike, and Coca Cola, paying real dollars to acquire virtual real estate in places such as Decentraland and Sandbox.
In these worlds, virtual avatars being controlled by real people can explore and interact with these businesses, which, in reality, are potential customers that may prefer to interact in this way. The accounting profession is already making inroads in the Metaverse with CPA firms such as PwC and Prager Metis, who are buying virtual real estate to attract and interact with clients.
Adapt and evolve
With such significant change becoming the norm, it is important that firms not only identify technological opportunities, but adapt their culture to successfully implement and institutionalize these technologies, including quickly un-learning old ways. Today’s environment requires compressed learning cycles, so we expect firms to proactively adopt learning culture tools, including dedicated learning management systems and organization tools through Teams/Yammer. While all of these innovations may not impact firms exactly the way as described above, it is important to understand that they are all coming and will be part of our firm’s and clients’ futures.