One can’t deny the impact of technology on society and how businesses, no matter the niche, are nudged to adapt due to the industry’s growing needs and demands.
For instance, in recent years, the processing of data and information simultaneously has become a critical task in most organizations.
As such, this has led to the exponential growth of infrastructures, applications, and devices needed to store, analyze, and even automate tasks. And the accounting and finance industry is not an exemption.
To remain competitive, relevant, and productive, businesses and teams dealing with accounting and finance tasks must ensure they’re up to date with various technology trends and updates.
A way to do this is by hiring IT companies in Johannesburg or other IT teams within your locality to help you navigate the technical aspect of adapting to these technological advances and trends.
To help you get started, this article outlines some of the biggest technology trends in accounting and finance today.
As digitization increases, so does the growth of malicious attacks. More so, with more people working from home now, where their devices and network may be exposed and be more vulnerable to certain risks, the chances of encountering cyberattacks may also increase.
When this happens, you can put confidential records and information, both the company’s and your clients, at risk of possible leakage or data theft. This is critical, especially for the accounting and finance industry, where data breaches may lead to financial loss.
With that said, companies must ensure they have a solid and reliable IT system in place. It’d be best to seek professional services since data privacy and security are critical aspects of any business and should not be taken lightly.
In most cases, IT professionals develop a data security plan for your accounting and finance department. This may consist of essential measures designed to help improve accounting cybersecurity and your overall IT infrastructure. Furthermore, the essential measures include:
- Setting up a network architecture
- Providing for data encryption
- Having strict authentication and password policy
- Providing data backup for cloud accounting
- Conducting audits and penetration testing
- Controlling confidential data transfers
And aside from helping you strengthen your company’s IT infrastructure, IT consultants can also help ensure that you comply with data privacy regulations.
Internet Of Things (IoT)
IoT is an ecosystem composed of interconnected web-enabled devices such as processors, sensors, and hardware. These devices collect, send, and act on data they get according to the instructions they get from human users.
One of the main advantages of IoT for professionals and companies in the finance sector is the real-time tracking and monitoring of various documents such as financial records, purchase orders, and the like.
Companies in finance and accounting that harness the powerful combination of IoT and Artificial Intelligence (AI) enjoy more efficient and streamlined processes like stress-free and more accurate auditing.
Other benefits of maximizing IoT include real-time tracking of records and transactions that can forecast future improvement opportunities and enhance a business’s customer service by knowing their customers better.
These records and financial transactions can also be used to make informed business decisions accordingly.
On the other hand, IoT can also help management accountants and their overall performance to maximize efficiency.
For instance, IoT devices can help determine how efficient accountants are during the day. Furthermore, they can provide employers with the number of hours they’re active and unproductive, which are essential in tracking their performance accordingly.
Rise In Blockchain
Blockchain may be a familiar term you hear and is a popular buzzword in the business world because of its foreseen potential.
A recent survey found that C-level leaders now see blockchain as an integral part of an organization, and most businesses say that this type of technology is part of their top strategic priorities.
Essentially, a blockchain is a digital ledger containing different transactions that are distributed across a network. This technology decentralizes information and eliminates intermediaries or gatekeepers, making transactions transparent to the public.
However, it is essential to note that the participants inside the network must first verify the transactions before they are added to a digital ledger.
This emerging technological trend is seen as a means to help businesses improve their processes through:
- Transparency: it becomes hard for malicious entities to hide unpaid invoices, hence, allowing companies to build trust amongst themselves when it comes to managing transactions;
- Verification: accountants will have an easier time with recordkeeping because of the multiple verifications each transaction needs. Forgery and tampering will be highly difficult to execute with this type of technology.
- Secured Transactions: aside from multiple verifications from the different blockchain participants, each transaction has an unchangeable and unique hash, a cryptographic signature.
It’s important to know that blockchain has also enabled the buying and selling of non-fungible tokens (NFTs) or cryptographic assets using metadata and unique and distinguishable identification codes.
The purpose of these codes is to establish the authenticity and origin of the NFTs involved. Hence, for individuals scooping up NFTs, blockchain technology may also help them and their accountants to manage these cryptographic assets more efficiently.
For example, NFTs are indestructible since they’re built on a blockchain platform. If the non-fungible token is destroyed or stolen, the record of ownership still exists on the blockchain, and anyone can see it anytime.
Also, with the help of blockchain technology, it may be easier for your NFT accountant to help you deal with your potential tax obligations.
One of the trends to look out for is big data. Dealing with data means going through massive data sets that are analyzed computationally to reveal trends, patterns, and associations.
Working with big data means surpassing spreadsheets and handling unstructured data using natural language processing (NLP) tools.
Data digitization can enable businesses to become strategically agile, making real-time monitoring and report creation easier for companies.
Real-time access to data makes it easy for company leaders to pivot their businesses into more favorable positions before a brewing problem explodes.
Big data can also make it inexpensive to glean crucial information that may influence and create a better customer experience, increase productivity, and improve operations and internal systems.
With the pervasiveness of this technology, businesses are forced to rethink their business strategies, data storage, data processing, management, and conceptual data-related functions.
More Automations From Artificial Intelligence
Utilizing Artificial Intelligence (AI) in finance and accounting tasks could mean enjoying accurate reports generated in the most efficient way possible.
Automations done by AIs can improve the efficiency of business operations by getting tedious and repetitive tasks done faster.
These mundane tasks one can automate may include copying hundreds of valuable data into a spreadsheet, creating invoices, scheduling meetings, etc.
Through automation, organizations can focus instead on more thought-provoking and critical activities that may result in more innovations and business revenue.
Another notable benefit of automation is it allows businesses to save time. With more work done faster, labor costs may also be reduced as there will be no need to spend long hours at work, especially during audits and year-end financial reporting.
And finally, integrating AIs in accounting and finance-related systems and processes means decreasing the probability of human error.
Repetitive yet simple tasks plus burnt-out employees may cause inaccuracies in records. An AI in place can help quickly reduce the likelihood of multiple duplicate records and may even get data verification done promptly while going through billions of data.
Although these technological trends paint favorable pictures of business workflow and process improvement, some may still proceed cautiously and remain steadfast to the traditional approach and their current ways of operating their businesses.
Looking at the trends above, one thing is certain: technology will continue to change the finance and accounting industry.
That said, it will be beneficial for accountants and people in different roles dealing with finance to upskill and be familiar with these technologies to ensure they remain competitive in the trade and help them meet their clients’ needs and demands.