The use of accounting technology increases efficiency and streamlines a business’ approach to managing finances, enabling them to be competitive. Accounting technology enables accountants to connect effectively with the businesses they serve, allowing them to provide ongoing advice and guidance. Remaining current with recent innovations in accounting technology is critical for both accountants and businesses. The following are some of the most recent innovations in accounting software.
Blockchain technology is an advanced database mechanism (involving the distribution and decentralization of database tech) that allows transparent information sharing within a business network. It’s intended to protect encrypted data, reduce redundancy, improve efficiency and enable the maintenance of an expanding number of transactions. Blockchain technology enables a complete, automated digital audit of each individual transaction. Using modern encryption methods, this technology allows companies to use a common data retention infrastructure (involving the use of a shared ledger) even as each accountant, auditor and company maintains a privately managed database.
- Cloud computing applications allow the storage and accessibility of data online rather than on a hard drive. They don’t require expensive hardware, hosting, ongoing updates and dedicated IT to maintain. They handle everything from payroll and invoicing to taxes and benefit payments. Financial information is updated as changes occur and can be monitored and managed from a user-friendly dashboard, enabling a free flow of information, no matter where you are or which device you’re using. Cloud computing makes it easier to collaborate and exchange information. The flexibility of cloud accounting software makes it simple for growing businesses to scale. Adding new users/features is as simple as upgrading your monthly subscription. Cloud-based software also helps companies to reduce their carbon footprint.
- Automated accounting technology uses software to automate important financial operations. It limits the number of steps in workflows and makes the accounting operation a more hands-off experience by decreasing time spent on data entry. This tech is capable of highlighting anomalies or patterns without manual data input, creating greater efficiency. It reduces human error, often translating to higher profitability. From invoice approval processes to inputting sales data and automating revenue recognition, automated software features are expected to continue to develop. Automated accounting technology helps accounting teams work smarter, not harder.
- Optical character recognition applications (also referred to as text recognition) scan printed/handwritten documents and convert them into machine-readable text that can be shared with colleagues/clients. This data can be copied and/or edited as required and allows for the performance of a simple digital search to find the information needed. This technology reduces time spent on tasks such as itemizing receipts, organizing invoices and tracking expenses. It eliminates paper clutter.
- Artificial intelligence and machine learning make accounting more effective and efficient, improving productivity by up to 40%. AI can conduct repetitive, rudimentary tasks including auditing, payroll, uploading files and sorting through data. This frees up time for tasks such as analyzing and interpreting data and building more effective, efficient recommendations for corporate growth and stability. AI substantially reduces the likelihood of frustrating and time-consuming mistakes. Deviations from the established pattern can be caught before calculations move beyond the problem. This leads to more accurate reporting, reducing the need for audits.
- Real-time reporting is the process of updating your books at all times; revenue, account balances and profit. It allows the entire company to view all metrics/insights and make better use of analytics to make decisions.
- Personalization technology is about delivering a valuable service or product to a customer based on personal experiences and historical customer data. It’s becoming more common, from sales and marketing solutions to consumer apps to accounting software programs. It allows specific functionality.
By organizing everyday finance management, accounting software allows companies to grow their businesses. The administration process is streamlined, data can be processed remotely and the margin of error is reduced. Daily finances are better understood, empowering the business as a whole. Tasks that took hours can be done in minutes. Financial data is quickly and easily accessed in an easy-to-understand format. Innovations in accounting software save time and money while adding value to a company.
Need help establishing a good accounting system and/or incorporating accounting software? Looking for business advice? Contact Cook and Company Chartered Professional Accountants. We are based out of Calgary, Alberta, serving clients across Canada and the United States. We provide high-quality tax, assurance and succession planning services for a wide variety of privately-owned and managed companies. Contact us for a complimentary consultation.