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6 Top Technology Trends in Accounting and Taxation
Adoption of digital technologies such as AI, ML, cloud, blockchain, etc. in accounting and taxation, is set to transform these services to make them more efficient, effective and accurate. This may be further helpful to provide insights and accurate predictions to make business decisions.
This is a user generated content for MyStory, a YourStory initiative to enable its community to contribute and have their voices heard. The views and writings here reflect that of the author and not of YourStory.
Accounting and taxation has always been an important financial services requirement for all the businesses. Technological advancements – especially, advancements in digital technologies – have changed the way accounting and taxation services operate for any business. These processes are becoming more efficient, operationally effective and cost effective with constant reduction in manual efforts. This has lead to reduced manual processes, easy information flow and receive regular updates in real-time to decide the future course of action.
Not only accounting and taxation professionals, but almost all financial services experts/ consultants shall agree that in today’s scenario, their profession is undergoing a sea of change. To stay competitive in today’s world, just being technically sound in financial services and having thorough knowledge about it may not be enough; they should also be technologically sound and well equipped through investments in technology and employee training. This is important to keep pace with quickly evolving business scenario, rapid technological adoption, changing client requirements and regulatory compliance.
To check the latest technological developments and trends in accounting and taxation, kindly keep reading!
Adoption of software solutions and automation
Utilization of software services for accounting and taxation allows for digital entries and digital record keeping, which is more efficient and effective than manual process and record keeping. Moreover, automating the repetitive processes help to increase efficiencies and reduce manual errors. It frees up the time of workforce to focus on more value added works. This shall help organizations to make quicker and better data-driven decisions. Depending on their requirement and usage, businesses may consider developing the software and automation processes either in-house or leverage third-party tools that are already available in the market.
Adoption of big-data, AI, machine learning and predictive analytics
These technologies allow the businesses to get the accurate data in a structured manner for proper analysis. Big data means having vast amounts of data across various parameters to ensure proper analysis. Machine learning and AI ensures that the analysis is not restricted to historical data collected, but it is also extrapolated to the future for predictive analytics. These technologies enable the analysis based on not only static input data, but also on dynamic environmental data that was difficult to consider in traditional analysis. Hence, using these technologies for predictive analytics leads to timely and more accurate decision making process.
Use of cloud-based mobile-friendly applications
The cloud-based software systems provide users and the professionals the flexibility to access the systems as well as the data anytime anywhere. Cloud-based system is highly important to ensure the availability of remote work option for the professionals, in case they want to work from home or from someplace else. Today, smart phone penetration has increased to a great extent globally and also their processing capabilities have increased like never before. Hence, it is important to have the softwares that are mobile friendly and can be accessed through mobile apps to provide ease of operations for the accounting and taxation professionals as well as to the business leaders and clients for real-time updates.
Application of blockchain technology
The use of blockchain technology as a distributed ledger shall keep all the stakeholders well informed about any financial transaction. This shall enable the accounting professionals with real-time data to update any financial records and the tax professionals to ensure that the proper tax is filed for the given financial transaction. Business leaders can use the real time data from the distributed ledger to make any decision or generate insights. Moreover, it shall reduce the chances of any miscommunication or any delay in data required for regulatory compliance.
Leveraging social media
Social media has a huge presence across the globe and today almost everybody leverages social media for their businesses. Social media may be helpful for accounting and taxation professionals to showcase their capability and technical knowledge through regular post updates and knowledge sharing. They can take the help of social media to stay in touch with their clients and also track the updates of their competitors.
Outsourcing accounting function, especially for small and medium enterprises
Small and medium enterprises may not afford the investments to develop in-house accounting and taxation capabilities or to hire full-time professionals. Hence, they may prefer to outsource the work to accounting experts/ consultants as well as taxation experts/ consultants. These professionals are more likely to have capability, experience and knowledge in the field of accounting and taxation. This is likely to allow both the parties to focus on their expertise, and allow the accounting and tax professionals to invest in technologies to leverage the economies of scale due to their multiple clients.