While accountants once entered transactions by hand, information technology has made it possible to record information in real time, compile information from numerous sources and automate repetitive tasks. This has allowed accounting professionals to focus more on giving financial advice and monitoring performance. At the same time, IT developments have helped companies save time, reduce errors and make better financial decisions.
Before exploring the role of technology in accounting, it helps to look at some of the types of technology used in accounting today.
- Cloud computing accounting software: This software makes it easy to input and track accounting data and generate reports. It also has error-checking functionality and makes accounting data accessible from anywhere.
- Optical character recognition software: This software allows accountants to use scanners or even their mobile phone to import documents and convert them to a digital form that the accounting system can use.
- Mobile accounting apps: These work along with cloud accounting software so accountants can enter transactions and access data on the go.
- Machine learning: Seen in some types of accounting software, this capability can use prior information and experience to learn to perform tasks such as financial analysis.
- Digital currencies: Businesses can now conduct transactions with more than cash, checks and cards through the use of electronic wallets that store cryptocurrencies like bitcoin and litecoin.
With the use of cloud accounting services, all authorized users can access a company's accounting information anywhere they have access to the internet. This helps save time since accountants won't need to physically download files and share them with other users.
These services even allow accountants to make entries, scan documents and check reports from their mobile devices. This improved accessibility has made it possible for accounting and finance professionals to work efficiently and remotely.
Popular accounting software can now integrate with invoicing, payment and payroll services as well as full enterprise systems. This gives the software access to real-time information from numerous sources, so accounting records can automatically update as transactions happen.
Further, the use of optical character recognition software has made it possible to take pictures of printed documents like receipts and easily import them into the software without needing to type them. Together, these technologies reduce the need for manual entry and save accountants significant time.
These kinds of automation have brought some changes to the role of an accountant today. Mainly, accountants can spend more time analyzing financial data and advising management. Companies may also need fewer accounting professionals due to improved efficiency.
The impact of technology in accounting is also seen in how accountants can more easily reduce errors and provide companies with more useful financial information. Automating the recording of transactions and the transfer of data has reduced the likelihood of human error.
At the same time, modern accounting software can check for common errors and notify accountants immediately so they can address the issue. This can both help the company make more informed decisions and reduce penalties and audits from mistakes that later impact tax reporting.
Machine learning is one of the types of technology used in accounting that will continue to change the role of the accounting profession and help companies make tough financial decisions more easily. This technology has already helped popular accounting software check for errors in thousands of transactions and automate routine tasks.
It can also help accountants search numerous financial documents for key information and even assess the risks of certain financial decisions.
The impact of technology in accounting also means that accountants need to be comfortable quickly learning to use accounting software, performing data analysis and importing data from multiple sources.
At the same time, the rise of electronic currencies means that accountants must learn about how to handle issues such as losses, gains and the taxation of cryptocurrency. For example, these digital currencies have specific rules for recording their values that accountants will need to learn.