Future of Accounting: Top 6 Data Technology Trends
Big data technology has changed every area of our lives. And this is especially true in business. Businesses these days have become more tech-driven and sophisticated than ever before. These changes have had a massive impact on the financial and accounting industries. Last year, the financial analytics market was valued at $6.7 billion. By 2026, the sum is expected to rise to $14 billion.
Many new big data developments are influencing the direction of the accounting industry. They should be familiar to anyone working in this sector.
How big data is bringing a revolution in accounting
A lot of new technology is already in use, such as cloud computing, automation, and SEO. AI, machine learning, big data, and blockchain technology are already changing the way many organizations run their day-to-day operations. Thus, big data enables unparalleled insights and forecasts. Additionally, AI and blockchain are also substantially improving functional efficiency and accuracy.
Accounting is a business that thrives on accuracy and efficiency. Therefore, it’s more crucial than ever for accounting firms and CPAs to stay on top of technology. They need to embrace new advances because if they don’t, the competition will.
#1. Remote Work
Many of us may no longer go to work as a result of the COVID-19 pandemic. A number of workers began working from home out of their needs. Moreover, when coronavirus cases decreased, many wished (and still wish) to do so. This has had some practical benefits. In 2020, the unemployment rate for accountants was 3% lower than the national average. Thanks in part to the fact that 85% of accounting firms were more inclined to let staff work remotely, even after the epidemic. Accounting leaders around the country are seeing these benefits. They see these values as allowing workers to work from home, not just for safety reasons, but also for morale.
The cloud has played a significant role in these transformations. Many financial gurus have begun to discuss how we can use technology in accounting.
#2. Analytics
Data analysis is becoming more significant in a variety of businesses. The reason behind this is the prevalence of big data and the vast amount of information that computers can collect. As a result, accountants’ roles are evolving to reflect this. Many accountants are focusing on data analysis and gleaning insights from that data. It helps them to improve efficiency and risk management. Accounting companies will have to embrace some new skill sets if they want to stay relevant. Furthermore, data analysis isn’t novel. However, the scale at which analytics can operate has greatly expanded. It means that accounting firms will have to adopt some new skill sets if they want to stay relevant.
#3. Social Media
Social media allows companies to maintain touch with customers in many ways. It develops a positive online presence and builds a reputation. This automatically increases brand recognition, drives traffic, and so on. Thus, it can be a powerful sales and branding tool in the hands of a motivated and skilled social media specialist (or team). A majority of accountants (77%) already use social media for marketing and branding. Therefore, as social media grows and expands, that figure will likely climb even more.
#4. AI and Machine Learning
Artificial intelligence (AI) and machine learning are expected to play a significant role in the future of many sectors. A majority of accountants (66%) already use AI in their everyday operations. Moreover, they plan to do so in the future. Also, over 60% feel it will help them be more efficient with specific duties. Therefore, AI has the potential to automate operations and processes that would otherwise need a lot of manpower. It’s true that AI is unlikely to ever completely replace human accountants. However, it can aid in decision-making, increase efficiency, and aid in data analysis.
Deep learning is very beneficial in the field of accounting for small businesses. In the future, this will be a significant game-changer for small enterprises.
#5. Big Data
Big data has become an unavoidable aspect of our lives, and it will continue to do so. The accounting sector stands to benefit greatly from it. The insights derived from the vast data sets are now widely available and will be a great help. Over 60% of accounting companies around the globe are now using big data. In fact, many of them are prioritizing hiring accountants with advanced analytics and data science skills. CPAs can improve their planning and operations this way. Additionally, they can foresee possible difficulties with the right usage and analysis of big data.
#6. Blockchain
Blockchain, like big data and AI, is set to become an integral element of the accounting business. This technology’s security and openness are already changing the accounting industry. Blockchain is doing so by lowering the expenses of maintaining ledgers. Moreover, it is enhancing the accuracy of monitoring asset ownership. However, many people are still unfamiliar with blockchain technology. Thus, skilled individuals who understand what blockchain can do are in high demand.
Of course, the technological innovations that are reshaping the accounting industry (and the globe in general) aren’t all roses and sunshine. There are valid reasons to be concerned about some of these technologies’ drawbacks. For example, the privacy concerns that come with big data. Moreover, the error proneness of machine learning and the potentially negative environmental effects of blockchain. If technology is to advance responsibly and sustainably, accounting professionals will need to be well qualified and educated in the ethics of these technologies as well as how to appropriately use them.
