How technology is changing the accounting landscape
From the invention of the abacus to the creation of calculators, spreadsheets and digital accounting software, accountants and bookkeepers have always been able to count on technology to help them with their work. Here are a few ways that technological trends have changed the accounting landscape and a look at what the future might hold.
Connecting practices and clients
Thanks to mobile technology, accountants and bookkeepers have been communicating with their clients remotely for years. More recently, however, software options such as Zoom and Google Meet have increasingly allowed meetings to take place away from the office. During the Covid-19 pandemic, this technology has enabled practices to continue to provide crucial business guidance to their clients.
More opportunities to specialise
With fewer in-person meetings to attend, geography becomes less of a barrier. You could look to seize this opportunity by becoming more specialised in a particular field. If you wish to specialise in business consulting, for example, you may have previously been limited by the number of businesses in your postcode who could benefit from your services. As technology reduces the impact of distance, you may find that more clients become available.
The prevalence of cloud-based accounting software such as FreeAgent means that your relationships with your clients are no longer reliant on a spreadsheet or a box of receipts.
You can now use the software in your practice to assess your clients’ finances at a glance, run bulk payroll and submit RTI, VAT returns and Self Assessment tax returns directly to HMRC.
Your clients can also use cloud accounting software to record their business expenses on the go, get paid faster by sending invoices online and automatically import bank transactions into their accounts. These innovations save time and reduce the risk of human error caused by manual data entry and missed transactions.
By enabling you and your clients to collaborate in real time, cloud accounting software can help you to spend more time focusing on high-value tasks such as providing financial advice.
As accounting and bookkeeping technology improves, it can increasingly handle tasks that may have traditionally taken up a lot of time. Through machine learning and the introduction of artificial intelligence, time-consuming tasks such as inputting and reconciling transactions can now be automated.
Open Banking allows bank transactions to be imported daily into accounting software, where machine-learning programs can automatically explain transactions based on past activity. As well as reducing human error, automating these tasks can free you up to provide more value to your clients.
Providing greater insight into clients’ businesses
As a result of technology solving existing problems, time that you may previously have spent travelling to meetings or manually entering data can now be spent in higher value areas. For example, providing insight into clients’ finances and advising them on strategy, or dedicating more time to managing client relationships.
Regardless of how technology evolves, it’s likely that the practice of the future will spend less time on compliance and tax returns and more time helping their clients to grow their businesses.
What does the future hold?
The growth of new technology makes it difficult to predict exactly how rapidly the landscape may change over the next few years. A transition away from manual data handling towards automated processes is already under way and many practices are using technologies like social media and virtual-meeting software to connect with their clients.
Further developments in automation and artificial intelligence, as well as emerging financial technologies such as blockchain, are also likely to have an impact on accounting in the not-too-distant future.