words Al Woods
Today, with innovations constantly being reeled in, a great many sectors are experiencing unprecedented ease with all aspects of their operations. This could not be truer for the accounting sector, which has seen countless technological innovations simplify its one-time complicated operations.
These accounting innovations are indispensable for accountants across all fields. That said, here are some innovative developments that have made accounting run more smoothly than ever before.
Optical Character Recognition
Although it is possible to manage the finances of a client more efficiently with integration, it is impossible to do the same for accounting productivity. This is simply because you cannot reduce the manual entries, which are used to record the different financial transactions. However, with the help of optical character recognition (OCR), accountants have found a way to simplify their work tenfold. The technology allows accountants to automate many processes, thus, accelerate entries. Basically, OCR converts text to digital files via mobile device cameras and scanners.
Accounting Software Integration
Accounting is perhaps one of the most complicated and demanding jobs across all fields. Naturally, with such a status, using a myriad of tools is necessitated. This can include software solutions for managing invoices, processing payments, tracking inventory, handling the payroll and managing financial reports. However, by integrating the different software, you will have a singular powerhouse tool that can manage all at the same time. Moreover, an integrated software reduces errors across all operations and will have everything run smoothly at a quicker pace. It’s worth considering that each accounting work is unique to a business’s different situations and circumstances – for example, in a healthcare oriented business, it would be best to look at implementing specifically designed healthcare accounting software to take advantage of more tailored processes that will increase efficiency in this area of business. Beyond this, different kinds of business will have different priorities for what they need in accounting software.
One accounting process that stands out with its complexity is payrolls. Seeing as how it can be difficult to run the same program for various businesses of different sizes, using an advanced payroll feature can help. In fact, accounting specialists from Zenefits explain that additional features, like multiple schedule pay rates, garnishments support, tips reporting, contractor payments, and general ledger can help simplify your accounting tasks. Such a tool can work perfectly to serve your various purposes, while it integrates with other software.
Digital Currency
Digital currencies are one of the most popular technological innovations that can simplify accounting works. This is mostly due to how easy it has become to make international payments through digital currency, which must then be recorded by accounting firms. As opposed to the impossible difficulty previous times had presented, accountants can now utilize this tool to record a digital transaction as if it was just a regular cash transaction. Moreover, this tool will work through calculating the currency and reporting tax simultaneously, saving accountants a lot of time.
Cloud-Based Accounting
This is undoubtedly one of the most innovative tools that have helped keep accountants updated and still relevant in today’s markets. Reason goes to the technology’s ability in giving accountants access to financial data at all-times and from any place. Additionally, they do more for simplifying accounting works, as they make collaborations between clients and accountants possible. Simply using a device with internet connectivity will grant them access to the power and benefits of cloud-based accounting.
Lease Accounting
Technological innovations are often developed to tackle complex accounting issues. Lease accounting is no different. Lease accounting concerns how a business owner accounts for leasing items to, or from other businesses. Each lease might have different terms, arrangements, and borrowing rates which makes them hard to account for en masse. If your business involves multiple leases you’ve probably gone through the headache of trying to account for all of them while attempting to stay compliant with ASC 842, IFRS 16, and GASB 87. If you’re accounting for leases you will probably have a lease liability by which you’re under a financial obligation for the payments required. Again, accounting for this is hard due to the calculation of the lease value item. Technological innovations in the shape of smartly developed lease accounting software have enabled business owners and accountants to quickly account for leases.
Blockchain
Not long ago, Blockchain technology was exclusively restricted to digital currency transactions. However, that is no longer the case. This technology has allowed many businesses to digitally record their financial transactions in an open and secured ledger. These characteristics allow for the transparency of financial transactions, but also make them auditable without time or location limitations. Furthermore, custom software application with Blockchain technology is sought-after by accountants due to its ability to accelerate fund transfer, accurately record transactions and reduce receivables and payables.
Machine Learning
Accounting innovations have bred the ability of machine learning in accounting, which saves a lot of time and effort in many accounting works. The machine starts by learning patterns and analyzing large amounts of data. In a pragmatic sense, it would analyze large amounts of data to recognize relevant information and point them out. Typically, accountants use this simplifying tool to automate validation and categorization tasks.
All in all, these technological innovations help simplify various accounting works that have made the lives of accounting firms easier and less expensive. In addition to lowering expenses, accounting firms also benefit from their ability to increase productivity, which can help increase profits over time. Not to mention, these technologies grant better accuracy and make many parts of the accounting processes seamless. However, for these technological innovations to work efficiently, accountants will need to handpick the software they choose to employ, as it can produce different outcomes. Ideally, software with advanced features will work best.
