Is technological automation the answer to the future of accounting?
What is automation and how does it impact accounting professionals?
Automation is best described as the “application of machines to tasks once performed by human beings” [1]. Automation in the accounting profession could be seen as a wizard of efficiency or a destroyer of the professionals. There are a ton of articles out there with negative headlines about technology impacting every industry’s job market. Technologies such as automation are widely thought to be harming the accounting profession. In fact, a tool developed by Deloitte and Oxford University projects that accountants have a 95% chance of losing their jobs to emerging technologies [2].
In my opinion, the emergence of technology needs a different perspective. For example, if the taxi industry could evolve from yellow taxis to Uber, then, why cannot automation in accounting be looked at from a similar viewpoint? Instead of fearing the rise of technologies such as automation, accounting professionals need to look at them as a new opportunity.
Automation in the accounting industry is not there to take over jobs, instead, it’s there to change the way we work so that we can focus more on providing better quality. The graphic below, created by McKinsey, displays various activities within accounting and finance roles that could be potentially subjected to automation. It is evident that tasks with a repetitive nature or general pattern over time would most likely be automated. ?
The break of automation in accounting.
Automation in accounting emerged sometime over a century ago through the usage of the adding machine and the punch-card machine [3]. However, technological automation in the accounting industry has broadened extensively in the past three decades whereby most manual elements of an accountant’s workday have been taken over by highly optimized processes. Simple general accounting operations such as bookkeeping, or data entry can be easily automated. In fact, advanced examples include processes such as the extraction of financial information from tax documents and importing them on the software used for tax return preparation. Technology has absolutely simplified the execution of a lot of tasks down to a few clicks.
A big piece in the success of technological automation is the success of APIs (application programming interfaces). APIs are used to allow specialized accounting applications to work seamlessly together. For instance, banking transactions can be easily retrieved in real-time by effortlessly linking a bank account with the accounting software. Recently, many different applications have been able to successfully integrate with accounting software, therefore, streamlining the flow of financial data.
Benefits of technological automation in accounting.
Technological automation, in general, is exuberantly going to outperform monotonous tasks executed by human beings. Business owners and CPAs who have created an indispensable system by incorporating technological automation in their business operations have significantly transformed their priorities. By creating a well-built technological automation system accounting professionals can save valuable time, promote data accuracy, establish faster retrieval of data, and enact real-time integrations. Not to be forgotten, the professional development that comes along!
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Should newcomers in the accounting profession fear automation?
The introduction of automation in the accounting industry has streamlined several processes and tasks. It's now upon rising professionals to go a step further by leveraging the resources saved by automation to make their work more interesting and valuable. Based on my experiences, automation has allowed me to focus more on analyzing clients’ financial data, spending more time on strategizing potential patches for loopholes, and presenting client data in a refined and informative style.
Simple automation such as setting up rules on accounting software applications can help avoid errors, save time, and improve the quality of financial records. Rather than assuming that innovative technologies will restrict the accounting profession, let’s spend time encompassing these new technologies in our profession.
In a nutshell, accounting professionals who are willing to augment their line of business to work along technological automation will not only develop their competence but also expand their area of expertise by providing value-added services. ??
[1] Encyclop?dia Britannica, Inc. https://www.britannica.com/technology/automation
[2] BBC News https://www.bbc.com/news/technology-34066941
Learning Ecommerce | Online Retail Supplier since 2020
2 年Great work Dhruv, thank you for sharing your insight on emerging technology. Exciting times
Bcom Sauder School of Business | Audit Smythe LLP | UBC LIFT
2 年Great article, very interesting topic backed by good research, your opinion and experiences with accounting technology. I also feel that we accountants need to take advantage of emerging technology and provide better services to clients. Great job again!