Today’s rapidly developing technologies can be impossible to keep up with, overwhelming even the most experienced CEO's with a barrage of confusing and often conflicting information and news. Sometimes it feels like instead of benefiting you, these developments are simply another task in a never-ending ‘to-do’ list.
And yet, staying ahead of the curve on developing technologies is important and can greatly benefit your business. Emerging technologies continue to redefine how we do business – and accounting is no exception. In this article, you will discover the top emerging accounting technologies in 2020 and see how they can benefit your business.
The biggest emerging trend not only in accounting but across many industries is cloud computing. Traditionally, IT infrastructure consists of on-premise hardware, whether at your business or your accountant’s office.
The traditional approach has notable downsides. It is more expensive, since the hardware needs to be purchased and consistently maintained. It is also much less efficient – only those with access to the physical unit can access that unit’s files. If your accountant stores all your files, you will have to call them and ask to forward or share them with you, costing you time. Finally, this approach is unsafe – data can be corrupted or lost if the computer storing it malfunctions or becomes damaged.
Cloud computing offers a solution to all these concerns and, in the process, vastly improves a business’s workflow. With cloud computing, your information is delivered to you over the internet (“the cloud”). The data is stored on the cloud, allowing you to access it from any device and at any time, practically instantly.
Here are just of some of the benefits of cloud accounting:
Because your accounting data is stored on the cloud, you can instantly access the information you need from any device connected to the internet. Your accountant works on the cloud as well, and any changes they make are immediately reflected. As such, you can always access the most updated financial information, enabling you to make more informed decisions about your business.
You can grant anyone you wish access to the information, minimizing the delays in retrieving financial data and greatly improving your team’s capacity to access and work with the financial information of your business. This increased accessibility also enables more effective collaboration.
Cloud technology is naturally conducive to collaboration; everyone you give access can view and share information simultaneously on the platform. Your accountant can edit information while you upload new transaction documents, and a member of your team downloads a data report to review last month’s important trends. Since the cloud is accessible 24/7, you are no longer limited by office hours, and there are no delays in sharing or retrieving important information.
Cloud computing removes practically all set-up and maintenance costs associated with IT infrastructure. Similarly, cloud accounting takes advantage of this to rethink how accountants charge their clients, as they can offer more cost-effective solutions than the traditional, time-based billing approach.
The second emerging technology on our list is one you may be more familiar with, as it has been out in the market for a number of years already. Yet thanks to the emergence of cloud accounting, the role and impact of automated accounting is changing dramatically.
Automated accounting software aims to automate tasks such as generating accounting notes for transactions and preparing periodical statements, slashing the time and cost of bookkeeping procedures by many magnitudes.
Automation software can be a powerful tool on its own, but as the core of a larger cloud-accounting solution it can altogether transform the dynamic of accounting in the business.
Thanks to the emergence of cloud accounting, the role and impact of automated accounting is changing dramatically
Here is an example of how the two technologies work together: consider a credit-card purchase of a new ink cartridge. Traditionally, you would take a picture of the receipt and send it to your accountant. They would then review it, add it to the accounts, and sort the receipt for recordkeeping. You would see this receipt reflected in your next periodical statement.
Automated accounting links your bank account to the digital accounting database for your website. The transaction is instantly recorded once complete, and your accountant simply needs to verify it. You can see your updated statement in real-time through your cloud platform.
A question you may be wondering is, “can this automation software replace the need for a human touch?”
We don’t think so, and the leading financial experts agree . Much like cloud-technology, automation solutions are not designed to replace the human factor – they are just ways to optimize the workflow of accounting, allowing the software to handle data entry/management and freeing up the accountant to use more of their time on offering the expertise to clients.
In practice, this means accountants must react to the shifting technological landscapes, and as a business owner, you should expect more from your accountant than just number crunching. Effectively leveraging automation allows accountants to use their expertise to provide consulting services, review the businesses’ finances, and ensure that everything is sailing smoothly, without costing the business more in fees.
In short, rather than replacing accountants, automation increases the value accountants bring to small businesses, while also making their services more accessible than ever before. Click here to learn more about what YAC can offer your business.
Third on our list is the technology of Optical Character Recognition or OCR for short.
OCR software can read scanned receipts and other documents to draw out the important text and information contained within. In essence, this process converts images into encoded text. This significantly reduces the processing time of tasks such as inputting receipts into the database.
Thinking back to our earlier purchase of the ink cartridge, imagine the purchase is made in cash. Traditionally, the scan or picture you take of the receipt must be manually read and uploaded by an accountant.
In the new system, the OCR software reads and recognizes the important details of the receipt automatically, and the accountant must simply verify the information to ensure accuracy and prevent any errors.
OCR also allows for a much easier time accessing relevant information. A physical database takes time to sort through to find any specific piece of information, such as a proof of purchase document. With OCR, the accountant can use keywords to pull up the relevant document in just seconds, dramatically reducing the time these tasks take.
The three technologies discussed in this article can be combined to form an accounting platform, a tool more powerful than the sum of its parts. This combination is the essence of emerging cloud accounting services like Your Accounting Cloud.
YAC uses cloud technology to store, access, and exchange information. This is done through a user-friendly web-interface accessible on practically any device. At the core is an automation software solution which handles the data management and number crunching. OCR technology is used to scan and integrate data from submitted images such as receipts. All data is reviewed and handled by an accountant to ensure accuracy and consistency.
A great benefit of cloud solutions is the ability to provide an accessible and tailored experience. YAC's user interface is designed with accessibility in mind; it is created from the ground up with the goal of making the accounting language and features easy to use and understand for the average user. Combined with access to live expert support staff, learning to use and integrate a cloud accounting solution into your business is a very simple and efficient process.
This optimized system places the human factor of accounting to the forefront – accounting professionals can now focus more of their time providing expert guidance and support. And you can spend more of your time on what matters most – growing your business.
Get in touch today to discover the difference our platform can have on your business.