Excelling Beyond– Evolution of Accounting and Finance Domain
I used to hear stories from senior colleagues of how Xerox changed the way paperwork was managed and how accountants used to be sceptical of the accuracy of a copied document coming out with a funny sound from a machine. Accountants were not ready to believe that the copier can give the same output as has been fed in. The result was often put to manual check.
Guess the same was true when our fathers or fore fathers were introduced to calculator. The result was surely checked and cross checked to develop trust over the machines which could simplify task and help spend the saved time to more productive use. Typewriter, carbon paper, dot matrix printers all sound so ancient and have no relevance in today’s dynamic work world.
True for all successful innovations, people struggle before accepting and imbibing change and the ones who cant, just lag behind, sadly succumb to the rigidity, while others, transform.
With the onset of AI, blockchain and other innovations, we currently face the same challenge of being flexible and float or succumb to rigidity and denial. The accounting and compliances have moved and are still transcending mundane data processing to more exciting meaningful ones. A common question is – What would shape up how the accounting and finance may look like in the near future. This piece focuses on areas that accountants must keep themselves abreast with. Top on my list would be:
Agile Accounting:
Agile practices in software development are for implementing changes in software during development. Likewise, Agile Accounting is the process of adapting agile practices in accounting software to make changes in accounting at a rapid pace. Adapting to the changes on time and delivering effective accounting becomes the key focus. The data flow between the stakeholders will be continuous through effective communication, which reduces flaws in accounting and thus increases productivity.
Automation and Artificial Intelligence:
Automation continues to revolutionize accounting processes. AI-powered software handles routine tasks like data entry, reconciliation, and report generation, freeing up accountants to focus on higher-value activities such as analysis, strategy, and decision-making
Blockchain Technology:
Blockchain is increasingly being adopted in accounting for its ability to create transparent, tamper-proof records of transactions. It enhances the security and accuracy of financial data, streamlines auditing processes, and reduces the risk of fraud.
Data Analytics and Business Intelligence:
The abundance of data available to businesses has made analytics a crucial tool for accountants. Advanced analytics tools help uncover insights, trends, and patterns in financial data, enabling better decision-making and strategic planning
Environment, Social and Governance (ESG) Reporting:
With sustainability being the buzzword, stakeholders are increasingly interested in companies’ ESG performance. Accountants are playing a key role in measuring, analyzing, and reporting on ESG metrics, helping businesses demonstrate their commitment to social and environmental responsibility
Regulatory Environment and Compliances:
The regulatory landscape is constantly evolving, with new accounting standards, tax laws, and reporting requirements being introduced regularly. Accountants need to stay abreast of these changes to ensure compliance and avoid penalties.
Cyber Security Focus:
As accounting processes become more digitized, cybersecurity becomes top priority. Like any other division, accounting and finance must also implement robust cybersecurity measures to protect sensitive financial data from cyber threats such as phishing attacks, malware, and data breaches
Need of the hour is to accept what technology can do for us and look for areas to align with. The knowledge and experience cant be taken away by the technological advancements and key is to keep evolving. Tech fluency in human led businesses is no more an option. Evolving technology, the changing business landscape, and the environment are all shaping the future of the accounting profession. They’re impacting why and how things are done.
AI, automation, and even technology that doesn’t exist yet will mean that repetitive tasks need not be performed. But the reality is that machines can’t build human relationships like humans can, and they can’t combine intuition with experience to deliver the desired output. So instead of just keeping the businesses compliant, technology will afford time and insight to focus on making business more profitable.
In a time of exponential growth, predicting where the world will be in few years from now is almost impossible. Many fear the increased prevalence of artificial intelligence, but in reality, the humanity may be needed now more than ever—in a different capacity though.
Author: Nirav Maniar