(Money Matters) The future of accounting - Kasfia Rashid

Kasfia Rashid - “Money Matters with Kash the Bookkeeper”

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Introduction: 
This season has been a wild ride into the Future of Money and it wouldn’t be complete without taking a look at the Future of Accounting ( for that money).  The accountancy profession, like all professions, is going through a period of appraisal of its future position as a result of numerous changes in culture, technology and the world of work. COVID-19 has proved to be an incredible test for Finance & Accounting. The pandemic didn't care where a company was in their digital finance transformation. Business changed radically, and so did Finance, as companies had to shift to a digital model overnight. According to a recent survey of F&A professionals by FSN, this led to unprecedented disruption:

46% were disrupted by manual tasks that could no longer be carried out in the office 
41% were disrupted due to the difficulty of just sharing paper documents
36% were disrupted from limited access to on-premise solutions while they work from home

With accountants being so instrumental in success of a business, a disruption with them could cause a huge strain on the organisation and the owners, sending a ripple effect across the business world! While so many other parts of business have benefitted from digital transformation, Finance & Accounting is too often still getting the job done with the same tools and technology they have used for decades, still relying on spreadsheets and manual processes. Manual processes take too long, create unnecessary risk and hurt morale and productivity. Simply put, traditional manual accounting processes are not sustainable.

Today we will explore some innovations in accounting that can have a substantial impact on your bottom line. 

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Show Objectives - The Why

If Accounting is the language of business then Accountants are the translators of business. It is our job not just to compile numbers into neat little rows, but to communicate what those numbers mean and how best to use them. Everyone experienced a disrupted year, but for Finance & Accounting, the challenge exacerbated by the pandemic has been holding companies back for years. 

Accounting and finance leaders are quick to quote Microsoft founder Bill Gates when prophesizing about the future of the accounting and finance profession: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.”

The truth is, most people have difficulty envisioning a future much different from what’s seen in today’s most state-of-the-art departments. Outside of robots taking over, what more can change? If we look back at the careers of professionals who are about to retire, the profession looks far different today than it did 40 years ago.

In 1978, most companies kept their accounting records in paper ledger books. 
At the time, business school graduates were still about 75 percent male and supervised overwhelmingly female clerical staffs. Professionals wore suits and ties, might have a beer (or two) at lunch, and likely carried a paper appointment calendar in their breast pocket. Well, all of that has certainly changed.

Undoubtedly, the accountant of the future will need to be technologically savvy to evolve with the changing industry. As intelligent technologies progress and more companies move their information to cloud-based systems, accountants need to become proficient in leveraging the cloud to offer clients up-to-date financial analysis and to stay competitive. Accounting professionals who wish to use blockchain will need to be familiar with relevant software programs, as well as how to set up information transfer for ledgers, contracts, and records.





What You Need to Know - The What

The biggest technological development that accountants have seen in the last decade has been the emergence of the cloud. Thanks to the cloud, we have seen the rise of artificial intelligence, machine learning, robotic process automation, and various other technologies that have allowed us to automate far more.

The future of accounting is not just about technology, but it sure is being driven by it. Here are some examples of how automation is helping accountants this very second:

-Machine learning and robotic process automation can help you to prepare the books in a fraction of the time that it used to
-The interconnectedness of third-party software vendors and your accounting system allows data to flow seamlessly between each other, reducing manual data entry and errors
-Artificial intelligence is able to quickly augment an accountant’s skills

It’s clear that one must stay current with trends in automation in order to stay relevant as the future of accounting evolves. Labor and time-intensive facets of accounting — such as audits, tax preparation, banking, and payroll — are quickly becoming fully automated. As the application of AI to create self-learning systems continues to be integrated into accounting tasks, technological systems will take on the repetitive and time-consuming jobs, leaving the analytical and managerial tasks to humans. For example, major software vendors, such as Intuit, Sage, OneUp, and Xero, offer automated data entry and reconciliation options using AI and machine learning technologies in company bookkeeping, according to Forbes.  

Another trend impacting the demand for accountants in the future is blockchain technology, a computer-based recording system that uses cryptocurrency within a user-to-user network. The attractiveness of blockchain for accounting lies in “the possibility of a new type of accounting ledger — one that can be continuously updated and verified without the threat of being altered or corrupted,” Accounting Today explains.

What You Need to Do​​ - The How
Before you look to automate, you NEED to first have standardized processes. You can’t automate without a clear, step-by-step process in place.

So get clear on your processes first.

The easiest way to do this:

For each process that you’re looking to automate, get a strong team member in that process to document how they perform the task as it’s being performed.

Open / create bank accounts to house each new stream of revenue or asset line and use integrated apps to bring everything together in one place.

Use predictive analytics, for example Futrli Predict. It will look at historical information in Xero/QBO to create a predicted cash flow forecast, P&L and balance sheet.




Source Articles:

1. https://online.maryville.edu/blog/future-accounting/ 
   
2. https://www.icpas.org/information/copy-desk/insight/article/digital-exclusive-2018/what-will-accounting-and-finance-look-like-in-10-years 
   
3. https://www.ifac.org/knowledge-gateway/preparing-future-ready-professionals/discussion/future-accounting 
   

Additional Resources 

1. Check out Kash’s Youtube Playlist: Bookkeeping basics for small business owners. 
   
2. Get this affordable guide to reconciling any account quickly and accurately! Click here: https://kashthebookkeeper.com/paid-resources/ and scroll down to Reconcile any business or personal account in 4 easy steps!! On Sale now! 
   
3. Want more KASH? Sign up for the free newsletter! 
   

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​Written by Kash the bookkeeper  
Check out the last QuickBooks Online Tutorial you will never need here! 
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