5 Accounting Technology Trends: Accounting may not be the first thing that comes to mind when you think about technology, but accountants are serious about using technology to promote growth. In fact, 86% of accountants surveyed by Intuit plan to use technology to grow their business in 2023.
But how will technology change the accounting landscape? What are the biggest trends in the accounting industry that accounting professionals should be aware of?
Veronica Paz, DBA, associate professor at Health Desire, discusses topics ranging from big data and cloud-based accounting to artificial intelligence and blockchain.
Artificial Intelligence and Automation
Artificial Intelligence (AI) has rapidly evolved from an intriguing concept to a widely used revolutionary technology. According to the Intuit survey, 48% of respondents intend to invest in and implement AI, and 48% intend to do the same with automation tools.
Artificial intelligence and automation are greatly revolutionizing the accounting profession by streamlining operations and improving efficiency. These technologies this primarily by:
- Manage common daily tasks
- Reduce human error
- Improve the accuracy of transactions and financial statements.
Data entry, reconciliation, and reporting can be easily automated using AI-based software
Paz agrees nothing that AI can be used for both routine and complicated activities.
“As a CFO, I wouldn’t necessarily want to do reconciliations or cash transactions,” This is where AI, robotic process automation (RPA), and machine learning (ML) come into play.
In fact, AI and automation can do much more than simply perform jobs that humans would rather not do. AI systems can analyze huge volumes of data called Big Data to discover trends, allowing accountants insights and provide data-driven suggestions. It can also detect trends or anomalies that may indicate accounting fraud or problematic practices.
While some people are concerned about the use of AI and automation, Paz considers herself an advocate. However, she distinguishes between her support for technology and her opposition to it.
It’s an improvement: it doesn’t replace fundamental knowledge,” she said.” To perform any type of business or data analysis, you should always understand GAAP (generally accepted accounting principles), the standard set by the Financial According Standards Board (FASB), and international financial reporting standards,” This technology won’t help you if you don’t know what you’re looking at,”
Big Data, Analytics, and Business Intelligence
The integration of big data, analytics, and business intelligence (BI) has transformed the way financial information is processed and used, and it couldn’t come at a better time.” There is volume, variety, veracity, and speed: these are what we call the four Vs of Big Data,” adds Paz. We are drowning in information.
This is where technology comes in. Analytics can help accounting professionals uncover important patterns and insights. Accountants can use advanced data analysis techniques to:
- Extract useful information from huge data sets so that patterns can be identified more effectively.
- Identified anomalies
- Make business decisions based on facts
Accounting firms are looking to leverage Big Data to grow their operations. According to Paz, organizations are using data visualization solutions such as Power BI and Tableau to generate value. He also says that larger audits employ more data scientists.
According to Fundamentals business acumen is still needed, but these accounting skills, combined with data science, big data, powerful technology tools, and software, create a more lucrative skill set for employers,”
Blockchain Technology and Cryptocurrency
Blockchain and cryptocurrencies, like artificial intelligence and robotics, have quickly moved from the margins to the forefront. According to a study from the fifth annual Blockchain Accounting Symposium of the American Institute of Certified Public Accountants (AICPA) and CPA.com, the number of crypto assets increased from just under 11,000 in 2021 to more than 20.600 in 2022.
According to the study, the overall market capitalization of all crypto assets amounted to$1.492 trillion at the time of the symposium. Although this figure is lower than the previous year, it reflects the great interest in the technology itself. This also explains why. 47% of the accounting firms plan to invest in blockchain technology, according to the same Intuit survey.
According to Paz, irreversible and integrated books are the most attractive from an accounting point of view. And while it is an interesting technology, it is not without its flaws. Security and regulation are two issues that must be addressed before the technology can be used effectively.” But we’re getting to that point,” she continues.
Gartner predicts that overall software-as-a-service (SaaS) spending will increase 17.9% to $197 billion in 2023. This paves the way for the expansion of cloud-based applications in many industries, including accounting.
Accounting firms are rapidly adopting cloud-based accounting software, recognizing the benefits of flexible access, scalability, and cost savings that cloud solutions offer. However, there are other reasons why more companies should adopt this technology. According to Paz, the pandemic has contributed to the popularity of cloud-based accounting, but the preference for remote work remains a determining factor in adaptability.
Cloud-based agreements allow for continuous cooperation and announcements, allowing experts to work seamlessly and cooperatively on monetary information,” Paz said. “This leads to more precise monetary details and better targeting. The disadvantage of having such an excess of information that can be used continuously is security. Threats will continue to be a major concern as more businesses rely on cloud solutions for accounting, security, and cybersecurity.”
Data Security and Cybersecurity
It is essential to prioritize data protection and cybersecurity. According to IBM’s 2022 Cost of the Data Breach report, 83% of companies surveyed experienced more than one data breach. Cloud-based intrusions accounted for 45% of all intrusions and the cost per intrusion continues to rise.
Accounting actually poses a problem with online protection and information security,” Paz said, “Your association’s information could be left before, taking you to pay a figure to recover it.’ We used to say that currency was king, but now data supports it, People want it because it’s the way to get the plutocrat,”
According to the study, each breach in the banking sector now costs an average of $5.97 million, demonstrating the seriousness of the situation. The scale of the problem is considerable and is likely to feature prominently in discussions in the coming years, given the huge volumes of sensitive data in the financial sector and the increasing use of cloud-based data-driven software.