How technology is changing the accounting industry
By Pushkar Bagmar
Accounting, to a great extent, has been a conservative profession. Accountants are trained to be conservative. Naturally, change does not come to them easily. They prefer doing things the traditional way. And yet, there has been a significant change in the industry in the last 2 decades, primarily on account of technology. In this article, we look at some of the impact technology has brought into the accounting industry, especially in India.
Government filings working through technology
There was a time in India when all the tax and regulatory filings were done on paper. Huge forms would need to be filled to prepare a simple tax return! Over a period, all departments of the Government moved to electronic filing, right from tax, to company law, labour laws to municipal laws. All documents became electronic. Technology tools assumed a central role in the accountant's life. It was not enough for him to know the law and rules, he had to also learn the technology tools to be able to do tax and regulatory work. Following were some of the impacts on the accounting profession:
1. Location of the accountant lost its significance - in the paper filing era, the accountants were hired by client in the city in which the tax return had to be filed. Now the accountant can be anywhere in the globe and he can still file the filings electronically.
2. The accountants do not have a face to face interaction with tax and regulatory officers the entire interaction happens through the technology platform. Thus, for example, it is not required to have a personal meeting with the tax officer to be able to defend tax assessments. So, the accountant can do assessment for any client across the country.
3. Tax returns, company incorporation, and all other regulatory work became tool dependent. Tech firms saw a major opportunity here and they commoditised the tax and regulatory compliance work. Now, it is the Tech companies, and not the accountants, who have a major share of revenue on tax and regulatory work.
Cloud based accounting - anytime anywhere
Due to availability of cloud based accounting tools, the accounting firm can use accounting talent from anywhere in the globe to perform the accounting function. This helps them get the best talent from where it is available and render top quality accounting work to the clients. The clients have access to the data anytime anywhere and thus can make informed decisions. It is a win-win for both the client and the accounting firm.
ERP, Business Intelligence Tools - moving up the value chain
ERP and BI tools have opened an entire new field of opportunities for the accountants. The accountants are now spending more time analysing data rather than compiling it. Using the ERP data with analytics engine atop it, they are developing meaningful business insights including predictive analytics. This is helping them become proactive business advisors by enabling the clients take better business decisions, increase revenue and reduce costs.
Digital Marketing - blurring the boundaries
The advent of internet and social media has had a huge impact on how the accountants market their services. All accounting firms now have their own website and LinkedIn pages. Through these, they can be reached by global audiences. Digital marketing strategies have become an important tool for accountants to sign up new clients and grow their businesses.
Artificial Intelligence and Machine Learning - staying relevant
Accounting industry will be hugely impacted by AI/ML. Most of the basic work of accountants such as data processing, AP/AR, recons, etc will be taken up by technology. This would mean that accountants will need to reskill themselves to stay relevant by doing higher end work.
Conclusion
Technology has completely changed the way the accounting industry functions. Technology is here to stay and is going to create more disruptions going forward. The only choice then, for the accountants, is to embrace it and upskill themselves. They need to diversify their service offering to make it more relevant to the ever-changing client needs. This will help them move up the value chain and do better work. Adapt and grow is the mantra accountants need to follow.
About the author:
Comments