Saying that technology is changing the way we do almost everything is a bit of an understatement. Algorithms know what we want almost before we do and there’s a whole ecosystem of apps making it quick and easy to find virtually (or physically) anything. Complex tasks become simple and simple tasks become almost unconscious.
Even accounting — which has been done largely the same way for over 500 years — is being reshaped by the fintech revolution. So, what’s really changing for accountants and the businesses they work for? How will accountancy look as fintech matures? Let’s take a look.
A Quick History of Accounting (We Promise)
To say that accounting has remained the same for 500 years goes back to Venetian merchants and Luca Pacioli’s introduction of double-entry bookkeeping. Of course, the rules and approaches used by accountants have shifted to meet the needs of business and the regulations in each society. But much of the process has remained the same.
For most accounting departments, paper ledgers became spreadsheets, which then became desktop accounting software way back in the 1980s. This included everything from Intuit’s QuickBooks and ERP systems like Oracle and SAP, to the ubiquitous spreadsheets of Excel.
Many of today’s companies still rely on similar software, but the fast-accelerating fintech movement promises to change all that.
What To Get for the Accountant Who Has Everything
That first generation of accounting software provided a better way to store data and run calculations. What more could an accounting team want?
Today’s accountants are busier than ever and face a whole new set of challenges. That’s why emerging fintech tools are designed to go a step further and help accountants take back their time.
AI is the driving force behind the latest accounting tools. It allows them to automate repetitive and menial tasks that used to eat up much of an accountant’s day.
For example, the monthly close can be a very time-consuming process. On average accounting teams spend six and a half days closing the books, with many taking as long as ten days. That’s up to a third of the month focused on closing! Doesn’t leave much time for anything else, does it?
Recent AI innovations can help you automate the reconciliation process, cutting hours or even days out of the monthly close. And this is just one example of how AI can reduce the time needed for routine tasks.
The Right Tools for the Job
AI driven fintech applications are not only powerful but – like many things in our emerging economy – they’re often highly specialized. The old software applications served as a catchall for many industries and included everything you could want or need (supposedly). The new applications, on the other hand, are laser-focused on solving specific problems for a specific target market.
If you need a solution for that monthly close, for instance, you can find an app tailor-made for the task. If you want to automate your inventory tracking, there’s an app for that too. These specialized tools work in harmony and integrate with your primary accounting software, so you can access everything in one place. Instead of buying on “off-the-rack” solution, you can put together exactly what you need for your unique situation.
All Dressed Up and Nowhere To Go
Of course, with any discussion of automation, there are some who are worried about downsizing. Will accountants lose their jobs to sentient robots? Not any time soon. So, what will they do with all that extra time afforded them by technology?
More and more, finance and accounting teams are focusing on strategy and collaborating with the rest of the company. They’re leveraging their skills and education to analyze and interpret the information processed by their software and working with operational teams to make better decisions.
Rather than simply crunching the numbers and passing them on, the new accountants are helping use those numbers to better the company’s performance. This bodes well for companies that welcome the accounting and finance departments into a more strategic role. They’ll make better decisions, backed by solid data, and be able to act faster, which is a major advantage.
The Future is Now
So, what exactly has the fintech revolution done to change accountancy?
It’s provided a powerful set of tools so accountants can do more in less time. That efficiency allows the accounting department to focus on higher-level strategic work to make sure all the data coming from those new accounting tools is put to good use to help the company grow and thrive.
Accountants need not worry about job security, but they do need to focus on two things:
First, they need to make sure their tech skills are sharp and that they’re comfortable leveraging the new software available to them.
Second, they need to focus more than ever on strategic skills so they can integrate more smoothly with the rest of the team. Good leadership and communication is also key here, as accountants are likely to be interfacing with other departments more than they have in the past.
HedgeThink.com is the fund industry’s leading news, research and analysis source for individual and institutional accredited investors and professionals