The Impact of Technology on Bookkeeping & Accounting (And How it’ll Benefit Your Business)
The great Albert Einstein once said, “The measure of intelligence is the ability to change”.
The manual completion of bookkeeping and accounting tasks took a very long time before the invention of computers. Now many of the same functions can be done with a click of a mouse – illustrating the power of change.
This controversial subject of “change” has allowed business owners to save time, money, and stress. So, does the negative aspect hold up? The key to any successful business is its ability to change and adapt to new circumstances. It’s no different when it comes to the bookkeeping and accounting industry.
Technology changes in the bookkeeping and accounting industry have allowed accountants to shift from repetitive, arduous tasks to more value-added work for their customers, creating better client relationships and, most often, year-round businesses that go beyond tax preparation season.
As the next tax season opens, many small business owners will use a variety of technology to assist in their tax preparation tasks – further exemplifying the benefit and ease of use of applications and technology available today.
How Will Technology Impact the Future of Accounting and Bookkeeping?
In the world of bookkeeping, technology such as cloud-based accounting software, automated bookkeeping, Application Programming Interfaces (APIs), Artificial Intelligence and data analysis have allowed bookkeepers and accountants to streamline and improve processes within their businesses. In this post, we’ll explore the types of technology now available to bookkeepers, accountants, and business owners as well as the advantages of same while challenging the threatening notion of the introduction of technology within the industry.
Cloud-Based Accounting Software
Cloud-based accounting software allows businesses to now have access to their financials from virtually anywhere with a WIFI signal. Most of the latest accounting software, such as QuickBooks, FreshBooks, and Xero, allows users to snap and attach a photo of an expense receipt to a credit card transaction before even leaving the store. This removes the long-standing issues of unorganized shoe boxes full of receipts.
It's a more flexible approach to the traditional desktop-based only software of the past. It allows business owners to upload expense receipts and review financial transactions and financial statements (among many other things) in real time from anywhere should they require it for an impromptu business offer.
Cloud-based accounting software also allows collaboration between business owners, bookkeepers, and accountants, which supports the ability to answer financial questions in real-time and makes tax time a breeze for both the business owner and tax preparer.
Automation has taken the internet world by storm – basically, everything and anything can run via a set-up system. Gone are the days of spending 30 hours in front of a spreadsheet recording every income and expense transaction one by one at the end of the year, ensuring that you've accounted for everything.
Accounting software has improved the efficiency of bookkeeping tasks by using automation tools for everything from invoicing to reconciliation, and much more.
Application Programming Interfaces (APIs)
APIs allow two separate systems to access, use, and/or view each other's data. An API bridges the gap between two applications – allowing for a seamless connection. For example, synching your business bank account to your QuickBooks account is done via API. This allows your financial transactions to be automatically uploaded from your bank account to QuickBooks without having to manually enter anything – which not only helps to avoid errors but also saves you and your bookkeeper an enormous amount of time.
Artificial Intelligence and Data Analysis
Artificial Intelligence can also support many aspects of a bookkeeping or accounting business, such as highlighting trends and insights within a set of data and organizing and presenting data for analysis. For example, artificial intelligence can assist in compiling financial statements and other essential business finance documents.
Artificial intelligence can also assist in handling repetitive tasks, for example, by automatically tagging transactions, which reduces error, provides more effective data management, and allows bookkeepers and accountants to focus on providing a more advanced service for their clients.
Will Technology Replace Accountants & Bookkeepers in the Future?
While there are many ways in which technology has already replaced bookkeeping and accounting tasks, it likely will never completely replace the consultative nature of this industry. Manual, repetitive tasks have been replaced by technological systems allowing bookkeepers and accountants to take advantage of the time saved to provide a more lucrative consultative approach to their business.
A forward-thinking approach to business will allow bookkeepers and accountants to stand out in a world where automation has impacted the industry. Technology does not (yet) have the ability to solve unique client problems on its own, and therefore bookkeepers and accountants will serve as valuable partners to your business regarding your finances.
A Forward-Thinking Approach Is the Only Approach
In a constantly evolving world, it's crucial to be open to changing with the times – to find an opportunity instead of labelling change as the problem. This is what separates successful businesses from others. The ability to take advantage of and leverage technology such as Artificial Intelligence, APIs, and Automated Bookkeeping gives businesses the edge they require to remain competitive in their industry.
If you're looking for a bookkeeper and tax preparer currently using cloud-based accounting software, look no further! Contact us today, and we will discuss how our automation processes can be a benefit to your business today and into the future.