Key Takeaways
- What are the benefits of embracing AI-driven accounting technology?
- How will the next generation of Record to Report function help businesses improve their financial operations?
- What advantages can adopting AI-driven accounting technology offer for accounting professionals and businesses?
What does the Future of Accounting Look Like?
Accountancy has long been associated with outdated systems, piles of ledger books, and endless spreadsheets. However, the industry is rapidly changing, driven by advances in technology and the increasing adoption of automation and artificial intelligence (AI). In the years to come, we can expect these changes to accelerate as accounting professionals continue to leverage technology to streamline their processes, improve accuracy, and provide better insights.
The Deloitte Q4 2021 Global CFO Survey found that 94% of respondents expected their company’s investment in digital technology and assets to increase compared to pre-pandemic trends. For finance and accounting professionals, this emphasizes the importance of anticipating clients’ needs and expectations, as well as preparing for future trends. With ongoing reforms, changing economies, and rising business costs, technology can be a powerful tool to streamline practices and help clients maximize profits.
Adopting technology isn’t about drastically changing ways of working. Instead, it’s about using tools that complement and refine existing processes. Accountants who embrace technology as best practice will fare best in the ongoing battle for talent.
4 Accounting Trends to Watch Out For in 2023 and Beyond
As we head into 2023 and beyond, the accounting industry will continue to experience significant changes driven by technology, automation, and changing business landscapes. Here are five top accounting trends to watch out for in the years to come:
1. Automation and Artificial Intelligence (AI)
Accounting functions such as bank reconciliation, journal entries, inter-company consolidation, and revenue recognition can now be automated, freeing up accountants to focus on higher-value work. In the coming years, we can expect this trend to continue as more accounting tasks are automated, and AI becomes more advanced.
2. Cloud-based Accounting Software
Cloud-based accounting software has transformed the way accounting is done, allowing for remote work and real-time collaboration. More and more companies are moving away from traditional, on-premise accounting software to cloud-based solutions. According to Viewpost, cloud accounting is used by 82% of small businesses and 58% of enterprises. Enterprise resource planning (ERP) systems can integrate accounting software with other areas of the business, such as supply chain and production management, providing actionable insights into the business.
3. Data Analytics and Forecasting Tools
Data analytics and visualization tools, as well as budgeting, forecasting, and planning software, are increasingly being adopted by accounting and finance professionals. These tools help accountants to analyze data, provide insights, and make better decisions. Finance functions are becoming more analytical, and technology is driving the accounting and finance department from reactionary and transactional to proactive and analytical.
4. More scrutiny due to slow global economy
Governments and investors are increasing their scrutiny, making statutory and regulatory compliance a paramount concern for accounting professionals. To stay compliant, accountants need to stay abreast of evolving tax laws, accounting standards, and financial reporting requirements. In the future, advanced knowledge and skills in areas such as tax planning and compliance, risk management, and regulatory compliance will be essential for accountants to navigate the complex regulatory landscape under heightened scrutiny.
Scale Your Accounting Operations with AI-Driven Accounting Technology
AI-driven accounting technology is transforming the accounting industry by streamlining accounting operations and improving accuracy. A 2020 study on the transformation of accounting based on new technologies found that AI, Robotic Process Automation (RPA), and Machine Learning (ML) used in tandem generate more relevant information that helps business leaders make better decisions. Top accounting firms like Deloitte, KPMG, EY, and PwC have also embraced AI, implementing it into taxation, accounting, and auditing since around 2016. One of the primary benefits of AI in accounting is automation. AI can automate tasks such as data entry, bank reconciliation, and invoice processing, freeing up accountants’ time for high-value tasks. Additionally, AI can detect anomalies in financial data and flag potential errors, minimizing the risk of mistakes.
Another key benefit of AI in accounting is the ability to analyze large volumes of data quickly and accurately. This enables accounting firms to provide real-time insights into financial data, enabling clients to make informed business decisions. Furthermore, AI can reduce the time and cost associated with audits. AI-powered auditing tools can analyze financial data faster and with greater accuracy than traditional auditing methods.
As accounting firms face increasing pressure to be more efficient and effective, embracing AI-powered solutions can help them stay competitive. By automating routine tasks and providing real-time insights into financial data, AI can help accounting professionals focus on higher-value activities, such as analysis and decision-making. Additionally, AI can help reduce the risk of errors and delays, improving the overall quality of financial reporting. As a result, accounting firms can impact several key performance indicators, such as streamlining the financial close process, ensuring timely reconciliation, reducing P&L exposure, improving reporting accuracy, and cutting R2R process costs.
AI’s Role in Data Analysis for Smarter Account Reconciliation
As businesses grow, the volume of financial data they need to process also increases, making account reconciliation a challenging and time-consuming process. However, AI-powered solutions are transforming the way account reconciliation is done, making it faster, more accurate, and less resource-intensive.
By leveraging AI, businesses can automate account reconciliation and reduce the time and effort required to complete the process. AI-powered solutions can also improve the accuracy of account matching by analyzing large volumes of data and identifying anomalies in real-time. This is crucial for businesses looking to improve the accuracy of financial reporting, enabling smarter accounting decisions.
How AI-Powered Solutions Streamline Financial Close Process
The financial close process is a vital step in the accounting cycle, but it can be time-consuming and prone to errors. However, AI-powered solutions can streamline the financial close process, making it faster, more accurate, and less resource-intensive. According to research by Gartner, 75% of organizations are currently optimizing their accounting close processes for digital. The Gartner report also highlights that companies that have already adopted digital technologies for their financial close processes have seen significant benefits, such as reduced error rates, increased efficiency, and more accurate financial reporting. By using AI-powered solutions, companies can improve the transparency and accuracy of financial reporting, which is crucial for investors who rely on credible forecasts to make informed investment decisions. With streamlined financial close processes, companies can provide investors with more useful insights to assess underlying performance and make better investment choices.
Enhancing Risk Management with AI in Accounting
One of the most significant risks in accounting is the potential for errors and omissions in financial reporting. These errors can have serious consequences, including regulatory violations, financial losses, and reputational damage. With the increasing volume and complexity of financial data, it’s becoming more challenging to manage these risks manually. This is where AI-powered solutions come in, revolutionizing the way errors and omissions are managed in accounting. By leveraging AI, businesses can enhance financial risk management by detecting anomalies in real-time, identifying potential risks, and taking appropriate measures to mitigate them. This is crucial for businesses looking to improve compliance and auditability and ensure the accuracy of financial reporting.
The Future of Accounting Software: What Can You Expect Next
The future of accounting software is rapidly changing, and businesses need to stay up-to-date with the latest trends and advancements to remain competitive. The next generation of accounting software is expected to bring significant improvements to the Record to Report function, which is critical for financial reporting and compliance. Here’s what to expect:
1. Accelerating Financial Close with Day Zero Accounting
Automation allows for faster financial reporting with worksheets and project templates for data collection and analysis, reducing the risk of errors and avoiding the need to create reports from scratch. This helps businesses to close their books faster and provide accurate financial statements to stakeholders.
2. Improving Reconciliation Accuracy with Continuous Accounting
AI accounting software performs reconciliation on an ongoing basis, which helps to improve accuracy and reduce the risk of errors. This provides more accurate financial insights and enables businesses to make better-informed decisions based on reliable data.
3. Detecting Anomalies Proactively to Reduce Risk
Autonomous technology proactively identifies unusual patterns or outliers in financial data, which can be indicative of errors or issues. This helps to reduce the risk of errors in reporting, compliance violations, or financial losses.
In addition to these benefits, the future of accounting software is expected to bring more advanced automation capabilities to other areas of accounting. This includes automating the accounts payable and receivable processes, automating financial reporting, and automating tax preparation. These advancements are expected to increase productivity, reduce operational costs, and accelerate the sales cycle.
Drive Greater ROI in Accounting with HighRadius’ Autonomous Solutions
HighRadius’ Autonomous Accounting offers you the ability to drive greater ROI in your accounting processes. With cutting-edge technology and automation, HighRadius’ software streamlines accounting processes and reduces errors, allowing you to operate more efficiently and effectively.
Key benefits of HighRadius’ Autonomous Solutions:
- The ability to automate repetitive tasks, such as data collection and analysis, allowing your finance team to focus on more strategic tasks and make better-informed decisions. This results in improved accuracy, reduced risk of errors, and increased productivity.
- HighRadius’ software also offers proactive anomaly detection, which alerts users to potential issues before they become significant problems. This reduces the risk of compliance violations and financial losses, further improving the ROI of the accounting process.
- HighRadius’ autonomous solutions come with advanced reporting capabilities, providing you with real-time insights into your financial data. This allows you to make informed decisions quickly and easily, resulting in improved financial performance.
To learn more about how HighRadius’ Autonomous Accounting Solutions can drive greater ROI in your accounting processes, schedule a demo today. Our team of experts can help you understand how our software can improve your financial performance and streamline your accounting processes.
FAQs on Future of Accounting
1. What is the future technology for accounting?
Future technology for accounting is AI-driven solutions that are expected to revolutionize the accounting industry, reduce operational costs, and enable accounting professionals to focus on higher-value tasks such as analysis, strategy, and decision-making.
2. What makes a good balance sheet reconciliation?
Automation is transforming accounting by streamlining routine tasks, improving accuracy, and providing real-time insights. In the future, it will continue to drive efficiency, reduce costs, and free up time for accounting professionals to focus on higher-value work.
