Datafication and automation: the tech trends changing the game for accountants
We break down two major tech trends and tackle what they mean for your practice.
For accountants, the times they are a-changin’. Well, they have already changed. And will also keep changing. You know what, Bob Dylan was probably most concise so let’s stick with his version.
Over the past few years, your industry and roles have been transformed, driven not only by the global pandemic – which has required you to become an all-round source of support for small business customers – but by other factors, too. Namely, increasingly advanced technology that continues to proliferate throughout almost every type of business.
Here, we take a look at two of the major technology trends impacting accounting, tackling the challenges and benefits these issues bring, and offering advice on how to adapt and thrive in the future.
Datafication describes what’s been happening across every industry for many years, often without us even knowing it. It’s the process of turning parts of our lives and businesses into data, transforming things that were once seemingly nebulous into something that could be tracked, analysed and acted upon. Banks, for example, use behavioural data to establish whether someone is trustworthy enough to grant them a loan.
As a result of global datafication, governments and regulators are pushing to give small businesses access and control over their data and how it is shared with third parties.
Take open banking regulation, for example. This mandates that financial service providers regularly share transaction data, with the goal of promoting competition and providing individuals and businesses better access to competitive and tailored financial services from a larger range of providers.
While this could initially seem like a headache for your practice, with small businesses turning to greater numbers of providers than ever before, there is significant opportunity, too.
First, you can access and use data from different sources, with a growing number of advisory tools helping accountants gather deeper insights for clients to drive success. An example of this is linking non-financial and financial customer data to achieve better analysis of cost drivers and improve forecasting accuracy.
Conjuring images of day-to-day activities tackled and optimised by machines, with human roles reduced or even taken away, automation may feel like a harbinger of doom for many workers, including accountants.
Indeed, automation will see certain to-dos from your regular list scratched out before you’re even out of bed. But this doesn’t have to be an apocalyptic outcome – instead, automation can be used as a differentiator for your practice, driving positive change and efficiency.
Key to this will be in automation’s ability to deliver timely insight into your clients’ financials, enabling you to save time while also providing more informed advice to help them make better decisions.
Automated end-to-end bookkeeping, meanwhile, can complete tasks that once took hours in just a few minutes. In addition, accurately capturing data from source documents such as bills and receipts, allows you to import transaction data from bank accounts so that your clients get paid as quickly as possible. And you can still remain very much in control – ensuring oversight of any actions being taken and making changes if necessary.
While these tech mega trends may seem like yet another challenge for your practice to overcome, instead they represent huge opportunities to optimise processes, drive efficiencies, and generally work better with clients. The times may continue changing, but by changing with them, your practice will be set up for success.
By Stuart Miller, Head of Industry Engagement, Xero
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