Technology in Accounting (Part 1): Where We Stand Today

At a time when technological advancements are reshaping every industry, the accounting field is no exception. I began my career in 2021. You may think, “How much could change in three years in a profession like public accounting?” With automation and other new technology tools, the answer is almost everything.

Technology’s Impact on the Accounting Profession

Though several benefits of automation and technology may be evident to outsiders (i.e., the reduction of low-value data entry hours and the monotony associated with these tasks, as well, as the reduction of potential for human error), the most impactful benefits are probably less obvious to those outside the profession. Throughout the last three years, there has been a paradigm shift in the industry. Early in my career, you may have heard someone say, “Let’s keep everything SALY (or ‘same as last year).” Now I hear a new tune.  My teams say, “Let’s try to use new tools and avoid SALY wherever we can.” (If you ever walked into an accounting firm and wondered why everyone was so tired of this “Sally” person, now you are in the know!)

During my first three years, the efficiencies gained by automation and analytics software have helped reduce the repetitive tasks I have to complete and make my time spent on detailed review fly by. More importantly, these changes have motivated me to become increasingly creative in approaching tasks set in front of me. Identifying new approaches allows me to focus on challenging and unique projects that provide a different value for my firm and clients above and beyond the required audit procedures. In recent years, the growth of advisory service revenue in public accounting firms has outpaced compliance work. This growth is due to several factors, not least of which is the impact that automation has had on the assurance and tax compliance process, affording firms more opportunity to focus on providing additional value to their clients.

Though you may not usually equate accounting with creative skills, the increased presence of automation software has forced professionals out of their comfort zone, regardless of their tenure in the field. Professionals are embracing this new challenge, even if they are still determining what is technically involved. Change is always tricky. While newer team members may be excited to adopt innovative technology, the responsibility of effectively implementing automation or AI rests with team members at all levels.

Technology’s Impact on Client Expectations

A growing majority of clients now expect their accountants to leverage new technology effectively. However, you cannot pick up coding or obtain a computer science degree in a few days. Luckily for firms, graduates from universities across the country are now entering the workforce with “enough knowledge to be dangerous” on software like Alteryx, Tableau and SQL. Younger accountants have a unique opportunity to advance their firm’s business unlike ever before, bringing a specific skillset to the table and building momentum for change.

Along with changes in expectations come changes in communication. During this period of change, it’s essential to be mindful of your audience. There may be a significant knowledge gap between team members on the technical function of specific software.  Effectively communicating findings, results or testing procedures is arguably more valuable than simply having the technical ability to use the tools. It will be impossible to fully recognize the benefits of these tools without a mutual understanding of what can reasonably be designed and implemented.

Looking to the Future

Though there has been a shift across many firms, more and more professionals will become knowledgeable on this subject throughout the next five years. Accountants will need to be data analysts.  As a profession, we must embrace that truth to maintain relevancy and provide meaningful service to our clients. Firms must invest in training at all levels and educate their teams on what is possible. In the professional services industry, we should also consider how new technologies may affect our clients, whether by helping them implement new technology or providing them with valuable insights using analytics tools.

Whether you are an analytics expert or a novice, there is so much to learn. Continue to expand your knowledge base and help others do the same. Given how much the industry has evolved throughout the first three years of my career, I can only imagine where we’ll be after the next five years. Stay tuned for a more in-depth exploration on the future of technology in accounting, including the impact of generative AI. In the meantime, if you have any questions about how the use of technology can improve your audit experience, our Assurance Team can help. Contact us for more information.