4 Key Tech Advances That Made a Significant Impact on the Accounting Industry
The business world has always been fast-paced, and technology has increasingly raised the speed at which processes flow and transactions are completed. To keep up and stay competitive, a company needs to invest in an efficient accounting system that makes use of the latest available technologies. The data generated by accountants’ ledgers and financial reports have become so much more valuable than simply measuring profit.
Gone are the days when accounting meant pressing calculator buttons and scribbling into ledger notebooks. Technology has changed how the accounting industry operates, enabling accountants to do far more than just crunching numbers. The numbers they generate are important for determining the best way for a business to operate, how it can grow further, and the measures by which it determines success. But all this would not have been possible without these four technological advances that changed and revolutionized the accounting industry.
Advances in Computational Power
Using a calculator is a lot faster and easier to use than an abacus, but in the age of supercomputers, accountants can use technology to solve extremely complex computations in a matter of seconds. Computing power is determined by the speed at which a computer is able to complete a task, and with the advances in this technology, today’s machines can take on a much heavier workload and perform more complex functions.
An especially important development is how computers have developed from standalone machines to becoming part of an ecosystem. This not only increases computing power, but also creates access to more data while maintaining security over the shared information.
Cloud computing is one of the more popular examples of an increase in computing power. This technology allows for data to be stored in a remote server, so the computing workload is shared by system resources. This also enables access for more users, so a company’s different departments can share and access unified information as needed.
Additionally, edge computing makes it possible to collect and peruse real-time data. This allows for financial reports to always be current and relevant so that major business decisions can be made using up-to-date information.
Artificial Intelligence and Intelligent Automation
Modern accounting software does more than just simplify the encoding of financial data. Some have begun to integrate the use of algorithms to apply artificial intelligence (AI) in financial data analysis. Apart from being able to verify data, the AI learns how to analyze documents and identify important information. As it “learns” the company’s process and needs better, the AI can be used to eliminate redundant processes and automate repetitive tasks. Using an AI to do bookkeeping also reduces the risk of human error, which can easily become costly mistakes for a company.
That said, AI and automation cannot fully replace the role of accountants. A human element is still needed to analyze financial data, to affect a company’s financial goals and to integrate with the rest of its business processes. The role of the accountant then changes from simply preparing the numbers to providing more in-depth analyses of what they mean for the business. This allows them to play a bigger role in guiding the company’s strategy for growth and development.
Enterprise Resource Planning Systems
Accounting supports all the other units in a business enterprise, which is why the data it gathers and analyzes is critical to the company’s success. All business information is gathered into software applications known as enterprise resource planning (ERP) systems and used to create a complete picture of how the organization is performing as a whole. It ensures that different business units are working in unison towards the same business goals though their activities and functions may be different.
For most organizations, financial data is the key driver for decision making. It informs budget availability and measures profitability. As accountants take on more strategic roles in companies, ERP systems are becoming a valuable part of their tool sets.
Supply Chain Management
Businesses often rely on other businesses, whether to supply raw materials or to outsource other operations. This operation involves planning, sourcing, manufacturing, and logistics. Each step has financial implications so everything has to be well-orchestrated. Thus, an accountant’s expertise is needed to oversee the entire operation and ensure that it maximizes the company’s gains.
Supply chain management (SCM) software makes it possible to manage this whole process efficiently at the best possible costs. SCM creates an information system that allows all the different moving parts to work in symmetry, so it makes it a bit easier for an accountant to analyze movements of the supply chain. With this software, an accountant can assess the data to set performance goals and identify inefficiencies.
The beauty of numbers is that they are precise and quantifiable, and technology allows for this data to be accurate and readily available. Technological advances have also made it possible for accountants to evolve into new roles as intelligence managers and bring more value to the work they perform.