Why accountancy is poised to undergo major digital transformation
Accountancy, both in industry and practice, looks to automation as a pathway to its future, according to a recent survey of accounting professionals carried out by Moss UK. More than half of respondents (57%) predicted that accountancy will become completely cloud-based or automated within the next few years as the sector embraces greater levels of innovation.
This shift can be considered a legacy of the pandemic, which forced industries and professions across the board to re-examine their use of digital tools and technologies to facilitate remote working. Two years on, accountancy, once largely analog, is no longer looking to these tools for its survival, but its future. Most accounting professionals now deem digital technology to be the most critical tool to understand in order to future-proof their business, whilst motivating clients to digitize their processes and reduce their costs has become a pressing need for accounting practices.
Amidst today’s economic uncertainties, financial management skills and streamlining company spending have become a vital part of the finance function. Maintaining data accuracy throughout the spend management process is a huge challenge for many accountants and SMEs more generally, with an array of spending methods including online eCommerce sites, company cards, subscriptions and more complicating the invoicing process. Fortunately, spend management is the area about to undergo the greatest technological change, with new capabilities putting accounting on the road to fully automated spend management in the next five to 10 years.
Why now?
The COVID-19 pandemic and Brexit have understandably had a significant impact on the accountancy profession, but this hasn’t impacted the desire for more digital tools. There is a massive market opportunity for innovative SMEs around the world to take advantage of the untapped powerhouse of digitized spend management. We have already seen the use of some technologies (such as cloud computing) boom, with firms migrating their data for easier storage solutions and more access to insights and analytics. Bookkeepers should be no exception, and having access to previously underutilized pools of data can take accounting services to the next level.
The last few years have created a pivotal moment for accountancy, banking, and financial services. Crucially, however, the cultural shift has penetrated society at a deeper level, too, and is affecting the way individuals engage with their personal finances at a very basic level, too. Covid-19 disproportionately impacted those of working age, with the Financial Conduct Authority finding that younger adults aged 18-34 saw the most significant increase in financial vulnerability. Now, nearly a third of millennials are using mobile banking apps more often, and the majority using their smartphones as the primary channel of communication with their banks.
We can see that change has filtered right through societies, with the workforce becoming more digitally dexterous in managing their personal finances as SMEs and larger firms invest in new technologies to deliver their services.
SMEs leading the charge
It has become rather customary to see innovation flourish at the fringe, and the accounting industry is no exception. SMEs are well and truly leading the charge on adopting game-changing technology, investing in innovative new solutions to help them drive productivity, work smarter, and optimize processes. There are amazing lessons to be learnt from the SME community, and we’re starting to see companies of all sizes take note.
Larger, traditional accounting firms, often constrained by legacy systems and policies, can’t afford to let things play out for SMEs before investing in new technological solutions. Investing in the right technology is the only way to stay ahead of the curve – failing to do so will only cause long-term damage. Of course, this also requires a willingness to set aside more budget for bringing new capabilities to the business, but the rewards are becoming harder and harder to ignore. The champions of this new era in finance and accounting will be those who onboard tailored solutions that complement the needs of their workforce.
Now is the time to retire legacy systems and look at investing in agile solutions that can evolve to keep up with new business and customer demands. This is not only going to improve the day-to-day experience and create more time and space for innovations, but it helps to better prepare the industry for future unpredictable events – a lesson well learned over the last few years.
Spend management – accountancy’s silver bullet?
Spend management, the tech that can deliver on invoice management, reimbursements, cash flow insights, and automated accounting, is going to play a central role in the digital transformation of accounting. The tech can be put to a plethora of uses to help businesses streamline their internal operations and focus on their growth strategies. Not to mention the benefit of simply making life easier for their accountants.
Pre-accounting including cost center and VAT code allocation can be almost entirely automated, whilst real-time spending control helps keep budgets intact up to month-end when closing can now be completed in minutes. By having a centralized platform, accountants and finance teams can have full visibility of transactions and expenses, so getting to the bottom of invoicing mysteries has never been easier.
As customer expectations have shifted over time, the need for new, agile solutions has become paramount for success, and service offerings are evolving to keep up with changing demands. The use cases for AI-driven tech are endless, and we’re just beginning to scratch the surface on what it can deliver for finance and accounting.
