Technology has completely obliterated businesses and industries that have refused to adapt and change. Once successful companies like Blockbuster and industries like the printed newspaper have been completely crushed because of disruptive technology, and it appears accounting is on the verge of a monumental shift as well.
In a recent LinkedIn Pulse article by Danetha Doe titled “About Last Night: Why the U.S. Accounting Industry Will Die a Slow Death,” Danetha describes what she learned about the eventual death of the accounting industry due in large part to advances in technology.
“Similar to other industries, the accounting profession is experiencing a drastic shift. Ian (Ian Vacin, VP of Product Marketing at Karbon) shared that the main catalyst for this shift is technology and the continued commoditization of accounting tasks.
With companies like Xero (commoditizing bookkeeping functions), TSheets (commoditizing time keeping/tracking) and Libra (eliminating the unnecessary complexity of tax filing), the role of the accountant is being squeezed from every direction.”
The individual accountant is still valued and plays an extremely important role within an organization or small business, but there is no debate that the industry as a whole is being disrupted by technology. Here are 7 ways accounting is permanently shifting.
From Shoebox to Cloud
In the past, accounting was done all on paper. Paper, physical paper, can you believe it? Paper takes time to sort through, and time is money. Plus, stacking shoeboxes in your basement can waste precious space.
The more organized the documents of an accounting client, the less time and money spent on accounting services. There are also benefits to accountants, who can now serve a wider base of customers, such as keeping information organized and having an easier time working with the clients they have.
Flexibility is another benefit of the cloud that is changing the accounting game. “I love that clients and I can review a document simultaneously during a phone call or a virtual meeting,” says Kahuna Accounting’s Raushana Pender.
The younger generation uses technology to interact with brands, which influences both purchasing and employment decisions. To attract young customers and talent, accounting practices and brands are shifting nearly all of their efforts, from backend systems to marketing. The shift in workplace tendencies of Millennials may favor the cloud as well, as younger employees would rather stay at home and work rather than commute daily.
Anyone with a smart phone now has access to a real-time feed to their bank accounts in the palm of their hands, or to receive information from their accountant in a matter of seconds. Whether it’s day or night, a purchase that has been made will be reflected in any bank account online within a matter of minutes. “Our clients can use apps to upload snapshots of receipts at the time of purchase, create invoices on the go, view and reconcile bank account activity, and upload documents or files,” says Pender.
As mobile access, reliability and safety increase, so does the potential for accounting to continue to evolve, especially for entrepreneurs and people on the go (and who isn’t these days?).
Web tutorials, online colleges, Google searches, and how-to YouTube videos put access to information about practically anything right at your fingertips. How accounting works is no longer a secret to those without accounting backgrounds thanks to these easy-to-use resources. However, many accounting concepts can be difficult to understand by simply watching a video, and just because the education is easy to obtain doesn’t mean it’s always as simple to put into practice. This access to information is shifting the industry due to extensive and expensive accounting education no longer being a requirement to serve as an accountant.
Specialization vs. Bundled Crap
“All-in-one,” is a very scary term. Although accounting software was once approached as a one-program-fits-all, startups and new divisions of existing companies have created specialized versions of software that serve a specific purpose. Technology has provided these programs with the ability to talk to each other and share data and information immediately. Many of our clients have invoicing, payroll, accounting, and bookkeeping software that all integrate with each other.
Disappearance of Data Entry
Goodbye data entry! We can’t say that you will be missed.
Automatic imports and electronic documents and files have in some cases completely eliminated data entry. We’re getting technology to do the leg work for us.
“I can work from home,” says Pender, who pointed out another important shift for many accounting practices and firms. Accounting firms can now be distributed, and will likely shift in this direction during the next few years.
Additional Articles on the Topic:
- The Top 8 Mistakes Entrepreneurs Make with Bookkeeping
- 5 Reasons Cloud Accounting will Change Your Business (and Life) for the Better
- 20 Top Cloud Services for Small Businesses
- Virtual Accounting for Fast Growing Businesses
- [INFOGRAPHIC] How Accounting Has Been Changed Over Time with Technology
As technology advances, you will see a significant shift in the accounting industry as we know it. If you are looking for an effective and flexible bookkeeping solution for your business, give Kahuna Accounting a chance to earn your business.