Friday, April 19, 2024

8 Ways Accounting Has Evolved in the Last Decade

To an unfamiliar eye, accounting may seem like a simple act of tracking debits and credits. But, in reality, this financing field is so much more than that and is better described as the language of business and financials. In simpler words, accountants translate complex finances into formats better understood by the general public. 

The profession has evolved dramatically since its origin and much more drastically in the last decade. As technology advances, greater aspects of the accounting profession are getting automated. This allows accountants to focus on other aspects of their jobs, such as client relations and non-repetitive tasks. 

If you’re curious about the evolution of accounting in the last decade with the help of technology, keep reading.

  1. Mobile Accounting

Mobile devices have changed the game for accountants in the past decade, but the sector is still pretty slow to catch on. With just a few taps, mobile accounting has made it much easier to create expense claims and send invoices wherever you are. It also enables quick and convenient communications with clients and other team members without needing on-site consultations. 

The advent of mobile accounting has inevitably led to higher efficiency rates in accounting firms and even before starting a career. Students have access to various types of accounting degrees online, allowing them to pursue their profession even while working a full-time job.

Most accounting tasks are historically time-consuming, but mobile solutions have expedited these processes and increased efficiency. Most importantly, automation solutions for payables and receivables processes have allowed accountants to contribute their time and effort to more critical tasks. That includes deciding on cost allocations, preventing fraudulent payments, and other tasks they cannot automate.

  • Lowered Costs

Due to task automation, increased efficiency, and decreased working hours, the accounting sector has inevitably benefited from significant cost savings. Most accounting firms are saving hundreds on payroll and administrative costs while eliminating missed payments, late fees, and other costs arising from human error. In addition, by eliminating manual accounting solutions, teams can count on a lack of human error.

  • Client Relations

The advent of digital communications has eliminated the need for on-site, face-to-face consultations. Most of the time, online communication via Zoom calls or email messaging suffices. This helps save time on both ends, allowing accounting teams to focus on interactions they can’t digitalize. 

This also eliminates the need for physical documents you would share with your clients during an on-site meeting. Instead, you can share data and files and prioritize your client’s needs in real time without having to meet your clients in person. 

More importantly, technology has improved client relations more than cutting down on in-person consultations. By accessing client data in real time and generating data analysis reports to help them make wiser decisions, accounting firms can provide insights into financial data for clients.

  • Cloud-based Systems

Although cloud computing was invented in the 60s, accounting was one of the slowest sectors to adapt to this change. However, in recent years, cloud-based systems have allowed accountants to save time and money on both ends by streamlining most financial processes. 

For example, it allows them to access accounting data from any device as long as they have WiFi. In addition, cloud-based accounting systems update financial information automatically and provide real-time financial reporting.

This way, accounting teams can free up time for other tasks, making it especially ideal for smaller businesses with stricter deadlines. Instead, they can work on crucial manual tasks that actively contribute to profitability, such as verifying receipts of a product or service or accounting for partial payments.

More importantly, cloud-based systems have strengthened the security systems for accounting teams. With the help of advanced encryption and access control, accounting firms can guarantee that their client’s sensitive information is safe.

  • Workplace Culture

Aside from the more obvious technological changes, workplace culture in the accounting world has also evolved. Most importantly, the idea of a small accounting firm has shifted in the last decade, as the ownership of a small business doesn’t look too different than that of a larger corporation. Each party has various stakeholders and SME associations.

Of course, as accounting teams grow, the firm must also move with the times and focus on workers’ rights, active social media presence, and economic responsibilities. The modern world has generally made cultural competency the main difference between a successful accounting firm and a forgotten one.

  • Agile Software

Accounting has been a majorly manual profession in the past, but the term “bookkeeping” isn’t as literal now as it used to be. With the help of ever-evolving and time-saving software, accountants everywhere have retired their pens and ledgers, using more professional tools to track finances. 

Instead, they can contribute their manual labor to business growth, payroll, tax advice, auditing, and credit control. A decade ago, the average accounting solution was a manual, one-size-fits-all system that consumed time, labor, and money. Even firms that used accounting software had to perform regular manual upgrades and pause operations due to testing periods. 

Of course, those solutions were better than accounting on paper, but their maintenance defeated the purpose of saving time and money. Accounting software has significantly evolved in the past decade, adapting to each new regulation and automating nearly every accounting process. Most importantly, these software no longer require manual updates, save time, instantly generate critical financial reports, and sync all your financial data.

  • Record Management

One of the main issues accounting firms faced in the past was record management, as they handled more records and files than most other sectors. Fortunately, technology has made it much easier to manage, store, and access records without a hassle. 

Online cloud systems allow you to eliminate physical record storage and save financial records in manageable, accessible software while still maintaining the utmost security. Not only is storing accounting records online free and efficient, but it’s also much safer for sensitive client files. 

  • Rules and Regulations

The past few decades have seen several financial scandals in the accounting industry, resulting in stricter security systems. As a result, authorities had to introduce drastic legislation changes for the finance sector. For example, the Sarbanes-Oxley Act of 2002 focuses on disclosure controls, improper influence on the conduct of audits, disclosures in periodic reports, and more.

In addition, the Dodd-Frank act went into effect nearly a decade ago, protecting consumers and the economy from another recession. Wayfair and ASC 606 are other regulations introduced in the past ten years. Modern accounting firms have stayed current amid these evolving laws and enhanced their regulatory oversight to increase financial transparency in the sector. 

Conclusion 

Accounting has a rich history, evolving from single-entry bookkeeping to the first digital accounting over centuries. However, the exceptional advance of technology in the last decade has helped accounting evolve drastically, resulting in agile accounting software, better compliance, and improved client relations. 

Sam Allcock
Sam Allcockhttps://www.abcmoney.co.uk
Sam heads up Cheshire-based PR Fire, an online platform that has already helped over 10,000 businesses to grab widespread media coverage on their news at an extremely accessible price point.

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