Emerging Tech Trends in Accounting

Written by Jim Walsh, Chief Information Officer, Right Networks

As reviewed through time, this is likely to be a fascinating milestone in the evolution of accounting technology and its impact on business. Many working professionals can still remember when technology was burgeoning. From the perspective of accountancy, paper ledgers gave way to spreadsheet applications. CPAs and accounting professionals passed files back and forth from shared drives or emailed them to peers and clients. Then those spreadsheets got more advanced – they were shared in content management systems or stored in the cloud and worked on by multiple people simultaneously. And now applications are becoming transformative in their ability to draw conclusions and anticipate trends based on the information that was once handwritten in books that wouldn’t even fit inside a backpack.Read about emerging #tech #trends in #accounting, by @RightNetworks #Webgility Click To Tweet

The accounting industry isn’t exempt or unique in the fact that it’s being impacted by a rush of technology advances. Thinking about all of the different ways that technology could impact any industry is as dizzying as it is speculative. It’s likely that we haven’t fully anticipated the ways that conditions and processes will merge to allow for new things. So how can a CPA firm or accounting professional prepare for a future where technology presents an unknown?

“You can’t run an accounting firm in 2017 like you did in 1980 but it amazes me how many people try,” said Bill Carlino, Managing Director – Consulting Services for Transition Advisors, LLC. Recently, Carlino was surprised to meet with a managing partner of a CPA firm that didn’t have a computer in his office. “Historically, the accounting industry has not been the fastest to adopt change but there have been seminal technology events that have really advanced the pace of change – and the industry is now changing faster.”

Some broad technology trends – like cloud computing, big data, 3D printing, cybersecurity, wearable technology, driverless cars, and the Internet of Things – are impacting all businesses. But what will impact CPA firms and accounting professionals? We can safely assume some things.

Working Alone, Together
All businesses are going to have to be more receptive to remote work. It’s well-documented and understood that workers today want flexibility in where and how they work. CPA firms and accounting professionals need to have the systems and policies in place to allow for this. Cloud accounting systems are a great start to ensure that records can be shared securely, no matter where the client or the firm is located.

As firms become geographically decentralized and work is shared among virtual offices, it also means that workflow management systems will take on a more critical role. These applications will be increasingly important in giving company leaders a view into the status of projects and client engagements and provide clarity to other employees on outstanding tasks and client actions. As more and more data goes to the cloud, these applications will be critical in forming an understandable workflow from dozens of other systems and applications – like sales data, customer interaction information, financial reports, and contract information.

The Technology Guessing Game
The technology view beyond the next two to three years gets hazier. Artificial Intelligence has been seeping into applications and accounting automation software platforms at an increasingly steady pace. How AI will impact the industry is a speculative topic in and of itself but as systems’ decision-making abilities improve, it’s interesting to think about a computer’s potential role in evaluating financial and accounting records as part of taxation and valuation.

Probably slightly beyond AI, blockchain technology holds great promise in the accounting profession. A record that is self-auditing and immutable can mean huge changes for not just how much time and effort it takes to verify company financials but drastic reductions to the difficulty and complexity of audits.

Prepare Your Hard Skills (and your budget…)
Fear not, there are initial actions that CPA firms can take to prepare for what’s coming. “The first thing to do is get complete partner buy-in,” said Carlino. “Everyone has to be onboard with embracing technology and preparing for the future.” He added that if a CPA firm or accounting practice has a state-of-the-art technology platform, 4-7% of top-line revenue should still be invested in IT. He anticipates some firms going up to 10% as new technology emerges.

Cloud hosting your accounting system can be a critical first step in providing more security for client data, anywhere-access to business-critical data and applications, and freeing up time from maintaining a specialized IT infrastructure on your own.

“If you are a couple of steps behind,” said Carlino, “see what your competitors are doing.” He also recommended attending accounting technology-centric conferences as well as reading more accounting technology-focused publications.

Prepare Your Soft Skills
Having a great technology stack isn’t going to be of much help if a firm isn’t a position to use all that hardware. Now is the time to shore up any skills that will support the applications and systems of tomorrow. Knowledge of data analysis and data modeling will be a key part of standard client support going forward. Accounting professionals should also have at least some awareness of best-practice in IT security so they can do their part in protecting customer data as the sophistication and frequency of data intrusions rises.

Some industry experts think the right preparation starts with a shift in mindset and not necessarily a change in tools. Salim Omar, Chief Executive Officer of Straight Talk CPAs – a specialized accounting firm, and growth consultant to CPA firms councils his clients to think like CEOs, and not technicians. “Practice owners need to delegate. For so many years, they’ve done technical work and gotten satisfaction from it,” said Omar. “They think, ‘I produced this, I got paid’ and then they go on to the next thing.”

Omar stresses that it’s the intangible things like client nurturing and strategic advice to clients that will help a firm see results in six to 12 months and position them for the future. “Firms should utilize technology for better solutions to get the commodity stuff done,” he said. Only then can accounting professionals get meaningful time to play the role of trusted adviser.