Change is constant. At one-time accounting was a laborious, manual task. Today, computers and remote services pave the way for digital transformation in accounting. It is the present and the future. New tech such as AI, blockchain and machine learning are making inroads into accounting but the traditional way of accounting such as bookkeeping still exists although in a new digital avatar.
A peek into the far future
Five years later it may well be a totally digital accounting world with digital transformation in the accounting sector changing the way accountants operate. A typical projected scenario:
Paperless, cashless transaction with greater use of blockchain: From purchases to sales, everything is automated, cashless and paperless and automatically slots under various heads leaving accountants to view the big picture. There will be less of accounts clerks entering details of checks and vouchers into accounting packages and more of financial planning, analytics and forecasting as well as tax planning experts.
Accounting may well blend with customer services to add more value to business.
No waiting for reports to be generated: Digital technologies will give you high degree of automation and AI powered software. Transactions are entered and slotted into various sections and the package not only gives you reports in real time but also suggestions on taking decisions. Of course, you will still need a human CFA or CPA to interpret and take the right decision. Imagine a system that warns a business owner he is taking the wrong decision or is overspending! Cognitive accounting tools are on the horizon.
Accenture and Deloitte predict greater use of AI/ML and minibots in finance. Let us see.
This scenario is still some way in the future. However, for the present digital transformation is indispensable, especially considering the new normal of physical distancing and the need for cost-efficient quality professional accounting services.
The paperless trail
Traditional accounting involves plenty of paperwork with a trail of paper to account for each little entry and transaction. It does slow down operations and accounting staff spend more time in creating paper and then entering transactions in the accounting package. Now is the time to shift to paperless trail and transform digitally. Go the electronic documentation way, whether it is to create a voucher, a purchase order, an invoice or a receipt. Doing so means less of manual work and more of automation. This means your accounting personnel can focus on tasks that require brainpower. IMA study shows that in the traditional method your accountants spend about 75% time on low value manual tasks and productivity is low.
It also means that you can easily transmit all such electronic documents to your offshored professional accounting services. They will find it easy to do the task, charge less and give you timely reports.
The digital trail also improves the audit process since you have a precisely accurate record of who handled which document at which time.
The high-tech way is expensive
The high tech way that the future will see is AI powered accounting machines that intelligently handle accounting functions such as:
AI powered invoice management that recognize and classify items and suppliers automatically and even make payments according to scheduled dates to suppliers or send out reminders to buyers.
Check suppliers, onboard them into the system, verify them, set up tax system, accept their inventory and invoices and make payments.
Monthly, weekly or daily reports become easy when everything is taken care of by AI powered accounting package.
It is expensive and the system is yet to become perfect at the moment.
The better alternative
Stick with current accounting methods and practices but outsource accounting as part of your involvement in the digital transformation in the accounting sector. The offshored accounting service takes care of routine transactional accounting. That leaves your core finance team or CFO/CPA free to focus on using financial intelligence tools to better effect with data driven decisions.
Change needs time
Digital transformation forces people to play different roles. The CFO, for example, becomes an agent of change, basing decisions on data and reports generated by the backend outsourced accounting service. The accounting manager is expected to work as an optimizer by analyzing large data sets and delivering results that lead to better business decisions. However, this digital change takes time. It is better to leave it to an outsourced accounting service provider to deliver the results of digital transformation to you today rather than wait a year for change to come about in your employees. In fact, you could make do with a CFO or CPA or, even better, leave it to the offshore accounting service to deliver fast well analyzed reports on which you can take action.
Marketing has gone digital. Ecommerce is digital. Why let accounting lag behind by decades. Jump to digital transformation by letting competent services handle it for you and you will jump ahead of your competition.