Emerging Technologies in Accounting

The accountancy landscape is shifting.

In recent years, emerging technologies in accounting have changed the face of the sector, giving us new tools to help accountancy practices thrive.

Of course, shifts like this aren’t without their challenges: any accounting innovation needs users to invest time and effort into understanding how they work, and how to implement them in their practice.

Read on for some of the key technological innovations in the accounting sector – and how they could transform your accountancy firm.

Introduction to Emerging Technologies in Accounting

Over the years, the fundamental principles of accounting haven’t changed. What has changed in recent decades is how we use technology to make our work easier.

Technology has given us new ways to market ourselves to potential clients, as well as new ways to communicate with them. It’s created new products and services, like accounting software and apps, and reduced our reliance on manual data input. It has given us the ability to better analyse client data and predict future trends…and it doesn’t stop there.

Today, tools like AI, blockchain and cloud computing are revolutionising the way we work, and have the potential to enrich the sector even more going forward.

Let’s look at five of the biggest emerging technologies in accounting of the present day.

The Impact of AI and Machine Learning

AI has become a hot topic across all industries – and accounting is no exception. There are two key areas in which AI and machine learning have begun to play a role: automating routine tasks, and enhanced data analysis and forecasting.

There are various tasks that AI can automate, including invoice processing, data entry, payroll tasks and reconciliations. The benefits of this are two-fold. Firstly, it reduces the requirements for manual processing, freeing up your time to focus on more strategic activities. Secondly, by automating tasks like these it reduces the risk of human error.

More powerful AI tools can be used in financial forecasting and predictive analytics. They can highlight patterns in financial data, as well as identify any outlying data that could signal inaccuracies in client accounts.

Used in the right way, AI and machine learning can help you to improve data accuracy, as well as assist with strategic planning. However, you must take time to understand the capabilities and functionality of these tools before leaping in.

Blockchain for Transparency and Security

Blockchain itself is an accounting innovation. While it is often referred to when talking about cryptocurrency, it can also aid transparency and security in the accounting sector.

A blockchain ledger allows you to track assets and record transactions – and share this information with others. Immutable by nature, it provides up-to-date information to its participants, as well as absolute transparency.

The use of blockchain within your practice can enhance trust and transparency amongst all parties, and create permanent recordings of both data and transactions for future reference.

Cloud Computing for Accessibility

The rapid rise in cloud computing is likely to have been driven in part by the growth of remote working during COVID-19. It allows data to be stored and managed on remote, online servers, enabling real-time access and collaboration no matter where you are in the world and improving operational efficiency.

This means that accountants can work from anywhere – and need not even be in the same country as their clients, facilitating global trade. While there are cost implications with cloud computing, the good news is that there is also plenty of flexibility. Most cloud services offer scalable solutions that can grow as your business grows, meaning that you can start small and keep upfront IT costs down.

Big Data and Analytics in Decision-Making

Data is everywhere – and thanks to technology, it’s now easier than ever to access vast swathes of data all in one place. Of course, analysing big data without assistance would be near impossible, which is why AI and analytical technologies often go hand in hand with big data.

The sheer amount of data that your clients have about their business finances can make it easier for you, as their accountant, to gain a deeper insight into their business performance and trends. As a result, you’ll be able to undertake more accurate financial forecasting and reporting.

Big data analysis can also make a huge difference when it comes to risk management and compliance. By providing you and your client with real-time analysis of changes in customer behaviour, you will be able to foresee any upcoming trends in cash flow and other economic activity, allowing you to mitigate these risks in advance. As with AI, the use of big data can also reduce the likelihood of human error to ensure compliance with industry regulations.

Cybersecurity Measures for Accountants

Data breaches, phishing, ransomware and malware can be devastating for accountancy firms and their clients, with financial services and professional organisations at far greater risk of a cybersecurity attack than an average member of the population. The more of your work that’s undertaken online using cloud computing, the more robust your cybersecurity measures will need to be.

Regulations like GDPR require that you protect client data, and increasing your cybersecurity measures can help you to remain compliant. A strong cybersecurity approach will also help to increase protection against data breaches, reduce the likelihood of cyber attacks costing you money, increase client confidence and help you to prepare for an increasingly digital future.

Solutions could include data encryption, firewalls, anti-virus software and multi-factor authentication, as well as regular training for your entire team.

Why Join ICPA: Your Gateway to Technological Empowerment

If you’re not hugely technologically-minded – or if you’re not sure which of these accounting innovations is best for your practice right now – ICPA membership can help.

Our members – accountants and bookkeepers from across the UK – benefit from access to a range of cutting-edge resources that can help them make the best choices when it comes to emerging technologies in accounting.

These include access to the latest technology tools, as well as articles, advice and training to enable members to fully integrate these accounting innovations into their practices.

What’s more, ICPA membership also includes community and professional support. By joining the ICPA you will be joining an organisation created by accountants, for accountants: a community to help you to navigate your way through these exciting technological changes.

FAQs on Adopting New Technologies in Accounting

How can AI and machine learning benefit my accounting practice?

AI and machine learning can benefit your accounting practice in two ways. They can automate routine tasks, like invoicing, data entry and payroll processing, allowing you to focus on more strategic activities. They can also improve data analysis for more accurate decision-making and forecasting.

What is blockchain, and how does it apply to accounting?

Blockchain is a decentralised, secure ledger technology that records ownership and transactions in a permanent, verifiable way. In accounting, it offers both security and transparency, helping you to maintain integrity and audit transactions.

Can cloud computing improve my accounting firm’s operations?

By storing and managing data on remote servers, cloud computer enables real-time access and collaboration from anywhere in the world. This can improve operational efficiency, allow hybrid working and significantly reduce IT costs.

What cybersecurity measures should be in place when adopting new accounting technologies?

With so much confidential client information in your hands, you must adopt robust cybersecurity measures when implementing new technologies, protecting this data from cyber threats.. These could include anti-virus software, firewalls, encryption and multi-factor authentication.

Are there any challenges in integrating emerging technologies into existing accounting systems?

There may be issues with compatibility with existing systems you use. There will also be a need for staff training on the new technologies, and certain upfront cost implications. However, with careful planning, phased implementation tactics and vendor support, these challenges can be minimised.

Where can I find resources and training for adopting emerging technologies in my accounting practice?

Professional organisations can help. ICPA membership includes training, resources, advice and support for those looking to adopt new accounting innovations. You will also find that technology vendors themselves may provide training and support to help practices get the most out of their products.

If you would like to find out more, simply contact one of our friendly staff at ICPA, and we will respond as soon as possible.