Companies and other organizations are being transformed more fundamentally than ever before by digitalization. As businesses change, so do their accounting practices and financial statement audits.
Accounting is no different. The profession has expanded far beyond bookkeeping and payroll, and like its partner procurement, it is assuming an increasingly strategic role for progressive businesses. Despite the opinion of some experts that accounting has a future bleak in the digital world of the future, technologies such as cloud-based data management, process automation, and advanced analytics are poised to empower accountants in new and innovative ways.
It appears that we may be in the midst of a perfect storm in which how we store and access accounting data and the maturity of technological capabilities are all in place to expedite the digital transformation of accounting. Accounting and finance professionals may anticipate the reality of the fourth industrial revolution with the same dread as those who faced the prospect of machines taking over human-performed tasks. However, when machines take over repetitive, time-consuming, and redundant tasks, it will liberate human finance professionals to perform higher-level, more lucrative analyses, and client counseling. Let’s examine a few opportunities that have become available due to the digitization transformation of accounting practices.
Technology will assist accountants rather than replace them
Industry leaders sounded the death knell for accountants as early as 2015, convinced that emerging technologies, particularly automation, would spell the end of accountancy as we know it. In 2019, accountants surveyed by Robert Half regarding the impact of automation on their profession voiced concerns about being replaced, having fewer opportunities for creative problem-solving, and an overreliance on technology to complete daily tasks.
However, the events that have developed since then, including the Covid-19 pandemic, have demonstrated that accountants must focus far more on adaptation than a replacement like other professionals.
Without a doubt, digital transformation has drastically altered the playing field. Big data has become a valuable resource that must be utilized for effective competition. But for businesses that are prepared to exploit the potential of digital tools, this shift represents an opportunity rather than a threat.
Utilizing The Cloud, Automation, And AI Plus
By enhancing communication and collaboration, centralizing data management, particularly through cloud technology, reduces waste and costs significantly. Standardization and a unified datasphere facilitate data collection, access, sharing, and analysis. Transparency increases as data silos are eliminated, and data quality increases rather than decreases as data volume increases.
Similarly, digital transformation reduces expenses and boosts productivity by eliminating tedious and time-consuming manual labor (eg, data entry, three-way matching) and minimizing human error. In addition, it drives straight-through processing. Instead of replacing human accountants, it frees them up to focus on strategic tasks requiring creativity, collaboration, and ingenuity — services AI cannot yet provide reliably.
But the “grunt” work of analysis can be done by AI. Artificial intelligence can play a supporting role in a symbiotic relationship with humans by providing a “what” that humans can further refine into “hows” and “whys” by providing well-developed connections between disparate data sources.
Accountants, for instance, can utilize their unique human abilities to transform the insights extracted from high-quality data into more efficient financial planning and reporting. Moreover, in an integrated environment, they can collaborate with colleagues from other business units to leverage financial data to drive innovation, construct more resilient and agile supply chains, and develop business management plans that promote growth while ensuring continuity.
**Including other technologies increases the potential value.
- Virtual, augmented, and mixed reality technologies will expand beyond video games to offer new ways to explore, analyze, and share data, pioneer new process optimizations, and connect finance and strategic planning. According to a Robert Half survey, 71 percent of US managers either already use virtual reality or plan to implement it within the next three to five years.
- Blockchain has already earned a reputation for its supply chain optimization potential, but it also has significant accounting potential. Accounting professionals who understand distributed ledger technologies and can use them (and teach others!) will be in high demand for process development, auditing, and records management, among other tasks.
Attracting and retaining premier talent
Most accountants prefer to work at least a portion of their time from home, as they value work-life balance just as much as everyone else.
Digital transformation in accounting enables you to offer people a flexible lifestyle and enables your company to recruit the best talent and experience, regardless of location. In addition, technology that automates tedious, repetitive tasks also contributes to job satisfaction because it frees talented professionals to perform more meaningful work.
Maintaining client expectations
The digital transformation of accounting can also affect the client satisfaction levels of a business. Whether a consumer with an Amazon account or a high-value client at an accounting firm, people want access to their regular vendors 24 hours a day, seven days a week. Digitalization enables the creation of client portals and apps that enable individuals to sign in, check progress, make payments, sign documents, and advance business at any time.
Information Digital Systems (IDS) empowers Toyota Financial Services’ transformation into a mobility finance company. Information and Technology are at the forefront of Toyota’s operations, enabling each customer experience, business decision, process workflow, and product capability for their customers, dealers, partners, and workforce.
They lead the digital transformation by reimagining their decision-making process, platform design, and software development.
Conclusion
Even in the digital age, the fundamentals of accounting remain unchanged. Nevertheless, technological developments have the potential to revolutionize finance and accounting services. Digital technologies can process data significantly faster and more accurately than humans. As a result, they offer the chance to redesign various financial procedures and generate added value fundamentally.
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