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Emerging Technology Steers the Future of Accounting

Emerging Technology Steers the Future of Accounting

Despite its somewhat buttoned-up image, accounting is a dynamic industry, and professionals who embrace new technology are better positioned to become more valuable business consultants.

A quick look at the past decade illustrates this point. Just a few years ago, accounting firms were beginning to come around to the benefits of cloud-based systems. Social media was starting to take hold, and accounting professionals wondered if an online presence was a good idea. In 2008, the face-to-face mobile calls we take for granted today were still “a ways away.” These tools have become everyday essentials and the pace of innovation has not slowed since.

Here’s a look at a few of the emerging technologies that promise to revolutionize the way accounting firms do business.

Artificial Intelligence (AI) and Machine Learning

AI allows computers to perform decision-based tasks previously performed by humans. Jean Baptiste Su, a researcher and Forbes contributor, predicts AI to dominate in the very near future. He expects by 2020, AI technology will fully automate accounting functions – and tax, payroll, audits and banking.

Machine learning takes AI one step further – this technology gets computers to learn and progressively get better at decision-making and analysis. You may have encountered basic forms of machine learning if Netflix has suggested a movie that fits your taste, or you’ve noticed an on-target Google banner ad.

Data Analytics

While the larger firms may employ data scientists to work with big data – and to identify patterns and build models for tax clients, risk management and audits –small firms can also leverage data analysis.

Audit data is one place to start, Hitendra Patil, director of practice development at AccountantsWorld, told AccountingToday. Because audits are done on existing data, analysis is easier to implement. Patil expects AI and analytics to make a huge impact on the audit process in the coming months.

Blockchain

To many people, blockchain is an abstract concept that applies to cryptocurrency transactions. But this new technology has potential across a number of industries.

What is blockchain? This definition by Forbes may be the most succinct: “A blockchain can be described as an append-only transaction ledger. What that means is that the ledger can be written onto with new information, but the previous information, stored in blocks, cannot be edited, adjusted, or changed.” Cryptography links the contents of the newly added block with previous blocks so that any change to the contents of previous blocks would invalidate the data in subsequent blocks.

In the accounting world, says Amy Vetter in AccountingToday, the Big Four firms are using blockchain in various ways:

  • Ernst & Young and PricewaterhouseCoopers accept Bitcoin as a payment method.

  • In 2014, Deloitte launched Rubix, billed as a “one-stop blockchain software platform.” Since then, they’ve continued to diversify their offerings.

As for day-to-day accounting in smaller firms, blockchain has potential to greatly influence operation and services, said Amanda Wilkie of Boomer Consulting in a recent roundtable discussion with the Journal of Accountancy. It’s expected to affect auditing, cybersecurity, and financial planning and analysis.

The accountant’s role is evolving

Whether your firm is an early adopter of new technology or takes a wait-and-see approach, the role of the professional accountant is changing, but there’s no substitute for human capital and experience.

However revolutionary or game-changing, technology is really just a tool to help you work more efficiently, better serve your clients and grow your business.

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