Technology has revolutionised many of our traditional industries. Think about how you are now able to book a holiday through an app; how you use Google instead of the phone book, dictionary or encyclopaedia; how you can meet a new partner with just a few swipes.
And accountancy is not immune to the driving force of change and innovation. Over the past 50 years, the way businesses process and manage their accounts has changed more dramatically than in most other fields. In a time when invoices came in through the mail, and a bookkeeper worked using an actual book, a much greater level of human involvement was required.
Given that accounting at the transactional level is driven more by data than in-depth analysis, it is a profession that naturally lends itself to automation.
The highlight benefits of automation in accounting include:
- Efficiency – at the heart of many business decisions, this is the driving force behind automation. A business today that works entirely on paper is going to fall behind its competitors and risk invoices being delayed in payment or receipt.
- Use of time – with more people freed up from filing mail and stamping documents. They can spend their time speaking with suppliers and customers to build better business connections.
- Less human error – as we say, “we’re all human”. Computers are better suited to processing a high volume of data and identifying costly mistakes.
- More financial control – as all financial data is stored electronically, this data can provide unprecedented levels of insight that is then used to make more informed business decisions
From the business perspective, it may seem that reduced costs and efficiency increases are nothing but beneficial. However, there is more to the story. The costs of automation in accounting include:
- Systems not “talking to each other” – with an online supermarket full of software solutions. Shopping at random can land a business with a set of excellent systems that can transfer data easily. Leading to information being lost and heads being scratched.
- Financial reporting – given the strict regulatory requirements of businesses. Timely and accurate reporting is mandated by law. If automated systems are not closely monitored, they could lead to fines for the business.
- High barrier to entry – for sole traders and businesses running with tight operating margins, like restaurants, the cost for software required to compete with larger businesses may be out of reach.
But as technology will inevitably continue to progress, is the field of accounting at risk in the same way that other traditional “bricks and mortar” industries have been?
Well, the robots aren’t taking over quite yet. When you look into the range of businesses and requirements for accounting across an economy, it’s clear to see that human intervention is still required to keep a business’s accounts in check.
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