A number of technology trends are helping accounting and finance professionals overcome traditional challenges and cost structures, as well as improve operational efficiency.
Cloud-Based ERP Accounting Management Systems
Storing all your financial and accounting data in one place enables everyone in the company to plug into one centralized database, rather than disparate databases and spreadsheets. Cloud-based enterprise resource management systems accomplish this and link all financial data and documents across the business. This allows information to update across the board in real time.
Enterprise resource planning (ERP) systems typically include general ledger, accounts payable and accounts receivable, bank reconciliation, budgeting, management and financial reporting and payroll functionality. Complete integration of software reduces redundancies in data entry, which not only saves time and work but also limits the potential for human error.
The benefits of the cloud-based infrastructure include subscription-based, pay-as-you-go models; scalability; reliability and uptime; continual software updates; minimal maintenance and required IT resources and cost-effective cybersecurity. While some CFOs worry cloud-based software evolves too quickly, making some technologies outdated before a return on investment is realized, this is largely mitigated by the pay-as-you-go model.
Predictive Analytics and Forecasting Software
Management accountants for larger firms now use advanced forecasting tools, which leverage select structured and unstructured datasets to predict financial outcomes based on prior results and other known factors affecting the business. The same technology also enables real-time status monitoring of financial activities.
Predictive analytics software enhances management accounting’s capability to aid intelligent decision-making and to limit expense risks. In effect, investors gain confidence as the company gains stability.
Artificial Intelligence (AI) and Machine Learning Accountants and Bookkeepers
Just 34% of finance tasks are currently automated, according to Accenture, yet an estimated 60 to 80% of historical accounting activity can be automated. Robo-accounting and AI algorithms are gradually replacing the time-consuming work humans currently do in auditing, accounts payable and receivable, inventory control and other accounting functions. Predictions from 2018 expected robotics to replace 40% of the more mundane, day-to-day accounting work by 2020, which would allow educated and trained accountants to synthesize data and answer higher-level accounting questions.
Robotic process automation describes the use of software to expedite repetitive document analysis and processing tasks. Intelligent automation describes how advanced software can even replicate some human interaction and infer meaning in client communications. Further fueling these developments is the Internet of Things (IoT) revolution, which refers to interconnected devices and machines that store, track and transmit information in an AI/machine learning environment.
Due to the potential for machine-based learning to take on repetitive accounting work, demand for accountants with data analytics skills is expected to spike. Large accounting firms are already cornering the market for auditing services by building and refining automated systems. The big firms’ accountants are shifting to more of a consulting role with a primary focus on adding value, rather than measuring it.
Historically, one of the challenges facing accountants is maintaining security with confidential data in contracts and documents. As a distributed ledger technology, blockchain provides secure databases to capture and store data in accounting and financial records. It enables verification of identities and credentials, protects and transfers ownership of assets and allows for smart contracts. The technology is quickly gaining traction, as professionals are addressing the challenges related to industry regulation and more businesses are seeing decreased costs and enhanced security as a result.
These technologies have been referred to as the basis for the Fourth Industrial Revolution. An advanced degree, like a specialized MBA, can equip you to enter the fast-evolving accounting space. Graduates of advanced programs are better prepared to deliver what accounting firms and departments are seeking in their current and future hires.
Learn more about TAMU-CC’s online MBA program with a Concentration in Accounting.