How technology is changing the accounting industry
By Stephen Verber
Posted: 5th May 2017 08:05
Without doubt, technology has affected all industries. The accounting profession is certainly no different. As these landscapes change and technology continues to move forward, accountants at Alexander & Co are here to tell us about why technology is becoming more important, but why you still need to use a real accountant.
Reduction of manual work
There are now a number of record keeping technologies which should not only reduce the amount of manual input but should also reduce the margin of error. Data entry on Excel or manual ledgers are fast becoming outdated and are being replaced with specialist accounting software. Companies now have the potential to streamline the entering of data.
Added value from accountants
These new technologies enable, for example, data to be imported directly from a bank account meaning there is less time spent on basic data entry. This enables Accountants to provide their clients with more strategy and advice, interpreting data and helping clients develop a process which will help them plan for future budgets.
Social media is another aspect of technology which has become an important component towards the success of a business. Profiles on LinkedIn, Twitter and Facebook enable Accountants to network with peers and attract new clients.
There however still a real need for many meetings to be conducted in person and face to face meetings are still important in any profession. A quick face to face discussion can we worth a hundred email exchanges. However there is no doubt that the rise of online communities provides other avenues of communication for clients and peers to keep in touch.
Accountants have, until recently, been wary of storing confidential client data in the cloud for security and access reasons. However, as cloud computing became more widespread and Data Centre security has become more robust, those concerns are much reduced. Now many accountancy firms are seeing the benefits of the productivity of the cloud.
Whether it’s an email system such as Gmail, or document sharing such as Dropbox, cloud computing is becoming more common and can be advantageous for planning and customer relationship management. New companies like Xero have been developing their cloud offering for many years whilst more traditional accounting software providers like Sage, are only gradually moving into this arena.
There are many great mobile phone applications on the market for accounting. Xero for instance allows for bank feeds to become integrated in real time so that both Accountant and client can view, edit and add notes to statements as they please. Xero also enables bookkeepers to directly download transactions from a client’s bank and credit card financial accounts to compose the most accurate statements and invoices.
We keep hearing more and more about big data. What actually is it? Big data is an enormous amount of data they can be analysed computationally to show trends, patterns, especially relating to human interactions and behaviour. Big data is great for offering insights into seasonal variations or customer purchase decisions. With this type of access, accountants can help their clients make strategic decisions.
Some reasons you should still use an accountant
Whilst there are many great software packages out there, as a business owner, you should also consider some of the issues of using them without the input of a professional Accountant.
Time and expertise
Whilst these new accounting technologies are aimed to help those with little bookkeeping experience, taking the time to learn the accounting terminology and correctly set it up for your own circumstances can be time consuming. Running your own business already comes with plenty of stress, hiring an Accountant to help you deal with areas out of your skill set can alleviate that stress.
It is also important to realise that your annual accounts don’t just ‘fall out’ of your accounting software. There may be many adjustments required that only a professional accountant will have a full understanding of.
The old adage of ‘garbage in, garbage out, still holds true. Users of software still need to be wary of human error. It is easy to make a mistake when recording numbers on a spreadsheet, and is just as easy to mistype a number on your software package. Just because you have entered all your own accounting data into the software doesn’t necessarily mean it is entered correctly. A professional accountant will provide invaluable assistance is ensuring the software is setup correctly using the relevant codes and how you can check if you’ve made an obvious mistake.
Overall technology is of great benefit in bookkeeping but an accountant will show how to maximise that benefit efficiently.
Stephen Verber is partner at Manchester accountancy firm Alexander & Co. Stephen specialises in corporate finance including MBO’s and mergers and acquisitions. He also heads the forensic accounting department. Stephen is also a member of The Academy of Experts