4 Digital Innovations for Accountants

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As an accountant, you shouldn't let technology innovations pass you by. They are key to automating your finance tasks, adding value to your organisation or clients, and remaining relevant in your industry.

In this article, we look at four digital innovations applicable to the accounting world, which you can use to improve your practice.

1. Bank Feeds

Bank feeds are a very powerful innovation in accounting. Essentially, they provide a live, or near-live, connection between your accounting system and your bank accounts, making light work of bank reconciliations. But how do they work?

Basically, an accounting software vendor, e.g. Xero, uses a third-party "connector" to connect to your business's bank account. Once permissions have been granted, the accounting software requests new transaction information each day. When there are new transactions, they appear in the bank reconciliation screen of your software, with the date, payee, description and amount already populated. All that's left to do then is match this information against items that have been entered at the bookkeeping stage.

Even better, software like Xero uses AI technology to suggest potential matches. For example, if you have a bank receipt of ￡500 from X-Man Ltd and there is an outstanding invoice in the name of X-Man Ltd in Xero, the software will suggest this as a match, which means all there is left to do is click "OK".

Think about how you carry out bank reconciliations manually: you enter the bank receipt and the invoice, manually match these, and then type in the bank closing balance and tick the transaction so it all reconciles. It's a cumbersome and painful process. Now, thanks to bank feeds, it can be a breeze.

2. Optical Character Recognition

OCR is an innovation that uses algorithms to recognise and extract information (text, characters, etc) from images of/scanned documents – so this technology is very useful for receipts/invoices entry.

Let's say you scan a receipt that includes a vendor's name. OCR technology will attempt to recognise the characters in the vendor's name in the scan, by matching them with characters in its system. If successful, the OCR system will respond with the vendor's name as a piece of text, and automatically input it into your accounting system. Thus, OCR can eliminate the need for manual data entry.

OCR technologies are getting better all the time, but they aren't 100% accurate, especially if they are interpreting a blurred or low-resolution image/scan, for example.

That said, even with its limitations, OCR takes a lot of the leg work out of inputting information from receipts and invoices into an accounting system.

3. Data Visualization and Analytics Tools

Data analytics tools are a must-have in the accountant's toolkit, as they enable you to aid decision-making and solve problems at the top of an organisation.

While data analytics tools have been around for a while, they are constantly being improved and innovated, so it's important to be aware of the best tools available to you (bearing in mind your skillset) at any point in time.

A good place to start is with all-rounder data preparation and visualization tools like Microsoft Power BI, Tableau and Qlik. These tools enable you to connect to many data sources, e.g. Microsoft Azure, Tableau Server and Snowflake. They enable you to prepare and analyse data, perform calculations and combine data tables, for example. They also enable you to quickly produce shareable data visualisations and create dashboards (collections of data visualisations).

It's also important to note a difference between data visualization and data analytics tools. Data visualization enables you to visualize the data in different ways using slice and dice options, for instance using basic calculations. Whereas, Data Analytics uses advanced machine learning and statistical calculations / algorithms to generate hidden insights from the data that can change business decision.

One of our AI-Based Analytics tool is Aurora Lightz. You can have a look at below video to learn more about its exceptional features.

HOFT Consulting is the implementation partner of Aurora Lightz in the GCC region.

You can explore range of other data analytics tool in excel here.

4. Robotic Process Automation

RPA is a software technology that augments people with process automation. Today’s accountants use computer-dependent tools and processes with several manual steps and keystrokes.?RPA can transform accounting workflow by combining disparate actions into a smooth automated process. Here is simplified robotic process automation:

• First, the RPA bot captures users’ on-screen actions like clicks and entries when performing accounting tasks.
• Second, the application generates a script based on users’ on-screen movements.
• Third, the RPA bot uses generated scripts to automate repetitive, rule-based accounting tasks.

RPA bots mimic human actions in carrying out a task within a process. These software applications can execute repetitive tasks quickly, accurately, and consistently. For accountants, RPA provides a unique opportunity to optimize their accounting processes.

Top RPA Use Cases in Accounting

Payable Management

Accounts Receivable

Invoice Processing for Accounts Payable

Financial Reporting, Planning & Forecasting

Inventory Management & Accounting

Tax Compliance

Inter-Company Reconciliations

What Process Should I Automate?

Reference: Accounting CPD / Samuel Ellis

If you are looking to build these capabilities in your Finance Function and team in order to elevate their role to the next level in your organization, then reach out to us at HOFT Academy and HOFT Consulting for training as well as implementation of these emerging technologies in Finance & Accounting.