What needs to happen from a tech standpoint to advance digital tools accountants use
Serial entrepreneur and investor Wayne Chang, Co-founder and co-CEO, Digits that offers real-time finance data for accountants, comments on the need for tech to get faster to support practitioners’ needs
igital transformation has disrupted and accelerated nearly every industry over the past two years of pandemic adaptation – everything from seeing a doctor to ordering groceries looks different than it did even five years ago. Other industries have still to see full behavioural change at the hands of technological advancements and greater scale of adoption of these tools.
The financial sector has come a long way, but accounting lags behind other areas of this sector. A recent EY study on finance digital transformation found that while 92% of corporate finance leaders surveyed said that they have started their journey to introduce digital interventions in the finance function, only 11% believe they are at an advanced stage.
Four key changes need to happen from a technology standpoint to advance accounting tools in the digital world:
Technology must get faster
With any technological revolution, from the manufacturing industrial revolution to the advancement of global transportation, better technology leads to faster processing. To be successful, the next generation of accounting digital tools need to make time-consuming accounting processes happen faster. And dramatically so.
Today, small business accountants, for example, require hours to close one book for one client. These accountants and bookkeepers are responsible for reminding clients with monthslong lead time to organise and turn in their forms and paperwork on time so that the time-consuming task of closing a book can happen by April 15. If accountants had the capability to automate some of these processes so every step could happen faster, hours of time could be saved. If multiple books could be closed at once, with accuracy and full control by the accountant, late deadlines and unnecessary extensions wouldn’t be the norm during busy season.
Technology should be proactive
Part of creating faster, tech-informed accounting processes is ensuring that digital tools are proactive, not reactive. Accountants shouldn’t have to always be catching up to their clients’ updates, chasing down information, or scrambling to summarise financials at a high level when a need arises. Human error across files and documents shouldn’t cause issues in bookkeeping processes: a study by Bloomberg BNA found that 27.5% of accounting professionals surveyed reported that incorrect data had been manually input into an enterprise system at their firms.
Soon, technology will empower accountants to be there with clients solving problems, right when they are needed the most. Using technology to guide businesses to operate in a way to professionalise their reporting so that they can more efficiently navigate debt and lending situations or prepare for a sale.
Technology should be designed around the accountant’s needs…
Technology should serve as the foundational base for a true partnership between the professional and their tools. Like a doctor and her suite of advanced tools – MRIs, ultrasounds, microscopes – the tools enhance the capabilities of the professional.
Accountants should be equipped with smart tools that enhance their capabilities. No matter how quickly an accountant works on their own, it takes hours to close a client’s book manually. During a busy season or a month-end sprint, bookkeepers hit their maximum output, tire out, and slow down. Instead of pushing hard to finish month-end deliverables, technology can be the factor that helps carry an accountant through the month without hitting an exhaustion point. Automated emails to clients, updates that happen in books in real-time, intelligent analytics, and high-powered book search functions are all ways technology can enhance a bookkeeper’s power, making filing and reporting easier.
…and also make clients happier
Try polling your clients to see who among them actually looks forward to tax season. It’s likely that many of them actually dread getting calls from their accountant. Some of that anxiety comes from the reality that accounting technology lags behind other consumer technologies as a way to reduce stress and friction for users. Consider other instances of technological advancements that help end users: tech providers introduced virtual assistants like Siri and Alexa to reduce time and friction when querying for quick information. Even the shift over time from propeller planes to jet engine planes has made the process of air travel smoother, safer, faster and more comfortable for a higher volume of consumers, even while pilots play the same essential role captaining the aircraft.
Similarly, digital accounting tools shouldn’t be designed with only accountants in mind. The end users – consumers – who today fear and dread looking at their books will be more engaged and better informed about their accounting position if technology makes a noticeable difference in their day-to-day interface.
It will take time for the disruption in the accounting industry to reach an inflection point – but that time and change is coming soon. Our industry needs to prepare to embrace and train for technology-backed tools that will ultimately make their jobs faster, easier and more intuitive. Education and training will have to adapt as well, as knowing and visualising how technology will improve day-to-day functions will be critical to adoption. With this change comes the freedom and opportunity to focus on the most critical, human-centric tasks – technology can handle the rest.
Co-founder and co-CEO, Digits