7 Technology Concepts Accounting Professionals Must Embrace
Technology is constantly evolving, and it can be tough to keep up. To ensure your accounting firm doesn't fall behind, it's important to know how to evaluate technology so you can decide what you and your clients need. Ian Khan discusses attributes you should look for.
I would love to believe that we live in an era of digital transformation. However, that's not the case entirely, at least how I see it.
As a Technology Futurist, I get exposed to a vast number of new, innovative technologies and have the opportunity to study and understand them before they become mainstream. I can say this with confidence: We live in an era of unprecedented confusion and anxiety, so much so that it is paralyzing business decision makers like never before.
In this article, I would like to talk about the seven key parameters, signals or attributes that accounting firms should look for when evaluating any kind of technology. The recommendations in this article are purely my opinion and should not be confused with a suggestion to buy or invest in any particular area.
Any new mechanism, process, methodology or pathway that enables trust, solidifies existing trust, re-establishes trust, or builds trust is generally a good thing. Today in economies worldwide, trust is a rare commodity, but it is sought after by every honest entrepreneur. Technologies that present themselves as guardians and enablers of trust include blockchain. Blockchain is considered to be a trust enabler because it eliminates the need to doubt transactions, data, and the validity of information. This does not mean that a blockchain cannot have the wrong information. On the contrary, a blockchain will contain the wrong information if fed it, but it will preserve that information for perpetuity. Think about which technologies help you build trust with your clients and provide them with comfort, convenience and peace of mind. That is where you need to invest your time and energy.
2. Algorithmic Accounting
Today, almost everything technological has a connection to an algorithm. So, what is that? Well you see, computers are dumb on their own. Programmers found a way to make computer code serve users really well by automating many of the things computers do and helping code work in a particular way. This is the fundamental idea behind an algorithm, something that makes a computer code perform a task. Search engines such as a Google are powered by an algorithm, or, let's say, a very complex one. The fact that you can type in anything in Google and it finds it is not magic but the power of a very complex Google search algorithm. As technology progresses and we make strides towards more intuitive software programs and platforms, the importance of algorithms cannot be undermined. They also work with something called APIs, which stands for Asynchronous Protocol Interface. These connect different programs together to create outcomes customers need. Algorithms are powering the world of technology today and will continue to become more complex to serve the equally complex needs of systems that run on artificial intelligence and other complicated ideas.
3. Convergent Accounting
Convergence occurs when different things come together to provide results or value. It is about bringing different technologies together through the power of APIs and connectivity, including 5G, and helping computer programs work with and learn from each other. In the world of accounting, this means that your invoicing system could speak to your audit system, which, in turn, could potentially speak with your desktop applications. The idea behind convergence goes beyond just software. In fact, the convergence of different technologies, such as autonomous transportation and other software to create smart cities, will play a huge part in our everyday lives as we head into the future, including impacting business decisions and our work in general. This is highly relevant for accounting professionals, as your clients’ lives are impacted by this, as is yours.
4. Automated Accounting
Accounting as a profession has used automation in many different ways, including in proprietary systems, Excel sheets and beyond. Automation within technology is about accelerating the pace of getting to the end results. Automation can happen in multiple stages, including processing information, analyzing data, fast tracking audits, detecting fraud quickly and so on. In all honesty, automation can help accounting firms save a lot of money: Surveys suggest that accounting professionals spend about 80 percent of their time looking for information, a task that can be accomplished by automating processes. Artificial intelligence, or AI, is one of the new technologies that promise unprecedented automation. This is one of its biggest advantages and value propositions.
5. Experiential Accounting
The future is experiential. This means that the world evolving around us is becoming more in tune with helping people experience difference things with multiple senses. Consider the case of virtual reality glasses, those wonky-looking eyepieces Google started making many years ago. The Google Glass project was aimed at helping people navigate the world and access information. Today, we have multiple contenders and a highly advanced technology that has left Google Glass far behind, including evolving virtual reality devices and voice-driven technology that helps manage our everyday lives, such as Google Home. Think about how to make your accounting practice more experiential for your clients. This might include having a mobile app for your accounting firm where clients can access their data, files and signed documents, leave voice notes, or just contact you over a secure and personal channel.
6. Tokenized Accounting
Blockchain technology is creating change in many different areas of business. I have chosen tokenization because it is one of the outcomes of blockchain that significantly alters future possibilities in terms of the way we exchange currency. When traditional money is impacted by crypto in the future and tokens have change the way we access and buy assets, commodities and services, the way we do business will have fundamentally altered. For instance, tokenization has changed the way real estate has been sold and how certain industries such as loyalty points, real estate and other industries have changed. This impacts how you account for these assets, how taxes are paid and how we generally work with token-driven entities.
7. Mobile Accounting
Take a look around you right now, quite literally. You will see people constantly staring at their mobile phones, watching content, tweeting or TikTokking, emailing and doing other things. I’m not against the new ways we complete these tasks, but the fact remains that the mobility and ubiquity of this one device has completely altered the state of our lives. It goes without saying that mobility will continue to be a dominant force in what we do and, undoubtedly, we are fast moving towards even greater mobile usage then before. Studies have indicated mobility will even shape our health and genetics, and future generations might be so severely impacted that a majority of people in the future could be short sighted due to their excessive indulgence and exposure to mobile devices. Mobility becomes a key enabler in ensuring business continuity, access to clients, the exchange of information and a multitude of other valuable tasks. Future-ready accounting firms should have a mobility strategy that goes beyond just accessing information to look into information dissemination, customer care, and sales and marketing strategies, at the least.
The Future-Ready Firm
A lot is happening across the world, and information technology has moved out of the hands of the CIO into the hands of everyday users, including you and I. Today, technology is also developing at an exponential pace, with hundreds of new startups cropping up every single day, working on new ideas to change the world. As an accounting professional, it is your responsibility and obligation to be future ready by understanding the environment in which you conduct business, the environment in which your clients live, and the environment in which trade, commerce and business is being conducted . Technology will continue to play a very dominant role in business and in our personal lives going forward, and it is highly unlikely that this pace will ever slow down.
Use these seven technology attributes as guiding beacons to drive your accounting firm into areas of excellence that may have been left underdeveloped in the past. Take inspiration from some of these attributes the shape the future of your firm, and create a direction In which you can be in a position to serve your clients better to create more value and be a future-ready accounting firm.
Ian Khan is a CNN featured Technology Futurist, 3 times TEDx Speaker, Director of highly acclaimed documentary “Blockchain City", Bestselling author of “7 Axioms of Value Creation”, and contributor to multiple industry publications including Forbes, McGraw Hill, Business.com, AccountingWeb, and Entrepreneur.com. Founder of the Futuracy group,...