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How Has Technology Impacted Finance and Accounting?

The accounting industry has undergone significant transformation in the last two decades, thanks to unprecedented advancements in hardware and software technology. These technological developments have defined the 21st century, with immeasurable impacts for every business and trade; with specific regard to accounting, innovation has streamlined existing processes and paved the way to new ways of working.

But how exactly has technology influenced accounting practices in the 21st century? There are some obvious manners in which the industry has changed, from increasing precision to freeing up valuable time. And the future is only set to get brighter.

Reducing Margin of Error

Technology has played a major role in minimising margins of error across accounting processes. Calculation algorithms and purpose-built accounting software have together improved the accuracy and reliability of complex calculations, while the development of AI has enabled better models for forecasting and income predictions.

These factors not only save time for accounting staff, but also improve the reliability and integrity of financial information for businesses. This improves outcomes over time, as businesses and leaders make informed decisions based on accurate data.

Automation and Advisory Services

Alongside AI-assisted software, machine learning has also enabled the development of intelligent automation software – with powerful impacts for financial teams and businesses in the industry. The automation of rote accounting tasks and repetitive calculations, whether data entry or invoice processing, allows teams to refocus their time and energy elsewhere, freeing up crucial hours of the working day to bring creativity and experience to more complex undertakings.

Those complex undertakings might be customer-facing roles, such as advisory or strategy services to other businesses. With time-consuming administration handled by automated programs, advisory businesses are better placed to offer insightful analysis, financial forecasting, and strategic recommendations – particularly when bolstered with smart forecasting and precise calculations.

What to Expect from the Future

While the present is a uniquely exciting time in the accounting business, the future is poised to be even more so, with further innovation of transformative technologies all-but guaranteed. As AI and machine learning continue to evolve, they will play an increasingly significant role in businesses of all stripes. In accounting, this will enable executives to allocate far more time and resources towards higher-level analysis, strategic planning and business growth.

Additionally, key steps forward in the blockchain technology sphere are set to forever alter the way financial transactions are recorded and verified, creating a new sub-industry of tech-led financing and accounting practice founded on security and transparency. Meanwhile, cloud-based platforms and collaboration tools will further facilitate seamless collaboration between accountants and clients.

Technology has undeniably transformed the accounting industry, enabling accountants to work more efficiently, accurately, and strategically. From reducing margins of error and increasing forecasting precision to automating routine tasks in service of creative strategising, technology has effectively elevated the role of the accountant in business.