The Evolution of Accounting
Automation of accounting process gained immense traction in the last year, and CPA firms are rapidly implementing them. Audits, financial reports, payable accounts, etc., can now be automated, freeing up time focused on strategy and financial advising.
As we are seeing, things will not be completely going back to how they were before the pandemic. The advent of cloud computing has revolutionized work life all through the pandemic. Technology has made it possible to work even without being in the workspace. Similarly, there is a tremendous advancement in the automation of rote, labor-intensive tasks.
Multiple companies have started to include the usage of automation technology, such as Autobots, artificial intelligence (AI), and machine learning (ML). In fact, even the big four accounting firms have implemented automation in their accounting processes.
Emerging technologies allow accounting processes to be automated, streamlined, and more efficient. Therefore, it is necessary to be up-to-date with the current technology, irrespective of employees’ role in the accounting department.
Cloud computing has changed data transfer and the future of automation of accounting processes. With the facility to work with data in multiple capacities, cloud-based accounting has revolutionized how companies function.
The pandemic saw a massive rise in responsibility and increased working from home for CPA firms. Cloud accounting software makes it possible for all the information to be accessible at any place while having all the latest data.
The continuous updating of information provides unprecedented visibility over the process and the results. With the information available any time, anywhere, differential access makes it possible for accurate analysis and valuable insights to be made on the go.
Robotic Process Automation
Accounting involves many mundane and repetitive tasks that CPA firms can easily automate through Robotic Process Automation (RPA). Considered similar to Macros in excel, RPA can be used across multiple accounting systems, unlike macros that are only linked to excel. RPA can increase the efficiency of the accounting team by reducing the processing time, minimizing data entry errors, cost reduction, etc.
Financial departments of companies tend to use multiple software as all tasks cannot be accomplished using a single software. This is highly time-consuming and labor-intensive, requiring enormous data duplication. CPA firms can create software robots to follow specific rules or action sequences. RPA can be utilized in such cases, where data can be transferred across software following the assigned set of rules. This not only frees time but ensures data accuracy and cost-efficiency.
Click here to read more on how RPA is transforming accounting.
CPA firms have begun implementing blockchain technology. Instead of maintaining separate registers, companies can create a joint account to enter their transactions. This joint account is used to keep track of transactions’ receipts, creating an interlocking system for account records. Every entry made and moved is sealed cryptographically – making it tamper-proof. This can be considered to be notarized but electronically.
This form of accounting makes it easier for auditors to verify a large portion of the financial data. This frees up a lot of the auditors’ time that can be spent in other areas.
The integrity of these electronic files can be maintained by blockchain technology through their individual digital fingerprints. This digital fingerprint is then written into the blockchain along with a timestamp every time a transaction is made. These documents can be stored as any other data files without any issue as the integrity of these files is already sealed.
The Road Ahead
At Sentient Solutions, we see the transformation of accounting from laborious financial management to a nuanced understanding of current trends and economic growth. In the current landscape, automation of the accounting process reduces the time consumed by tasks such as payroll, taxes, filing, and maintaining the ledger.
We are here to help accountants and CPA firms scale up and lower their operating costs through Robotic process automation in accounting, AI, and scalable services. It is important to understand accountants cannot be replaced by the current technology. However, with the help of technology, it is possible to reach new heights, introduce novel ideas, and be future-ready.
For instance, cloud-based accounting has drastically reduced the manual workload of accountants. The automation of the accounting process is seamless as real-time data is available 24*7. This allows CPA firms to focus on high-impact, mission-critical tasks, including financial analysis.
There are also multiple programs providing interfacing of data, i.e., data from various systems can be shared. This provides the accountants an abundance of data allowing for the insights to be more meaningful. This will prompt accountants to become proficient in building strategies and taking on an advisory role.