As one of the oldest professions, the field of accounting is steeped in tradition and can sometimes seem resistant to change, particularly when it comes to new technologies. In fact, the impact of new technologies and the ability to adapt to a rapid pace of change are the two biggest challenges facing accounting professionals today, according to a recent Accounting Today survey. However, technological transformation in accounting is really nothing new.
Bookkeeping practices have undergone many transformations over the centuries, driven predominantly by technological advancements like adding machines and personal computers.
Desktop accounting software introduced a new way of keeping financial records and running reports. Instead of having to painstakingly transfer information into physical ledgers, businesses could input all their data into a computer and let the software do the heavy lifting involved in balancing the numbers.
Now, with the proliferation of cloud technology, the bar has been raised even higher. Are traditional bookkeepers at risk of being left behind once and for all?
Cloud Technology Has Already Transformed Bookkeeping
Unlike desktop accounting software, cloud-based software is hosted on remote servers. Instead of having all your data on-site in a local server maintained by the business itself, or siloed on a single computer, the data is accessed through the internet using web-based cloud computing accounting software and housed in shared data centres. There are plenty of benefits when accounting data and applications are hosted in the cloud.
Collaboration with team
Collaboration becomes easier as the business, the bookkeeper and any other accounting team members can access records and reports in real-time from any location, even through mobile devices. Remote access also makes it easier for businesses to outsource their bookkeeping, as the entire accounting process can be shifted online, including all document processing and internal communications.
Improved Security & Back-ups
With greater access also comes better security and control, which is an important consideration for compliance. Typically, cloud accounting applications use encrypted connections, which ensure that data is secure as it travels between a business' devices and the cloud data servers.
Similarly, software updates for cloud applications are rolled out faster than updates for desktop applications, which can sometimes take years between updates, so bug and security fixes can also be deployed quickly in the cloud. Not only do you always have the most up to date version of any given cloud application, but also the most secure version.
Cloud-based document storage has also created efficiencies for bookkeepers. Instead of having to hang on to countless files filled with paper receipts, invoices and expense forms, documents can be stored securely in purpose-built apps online.
Not only does this free up physical storage space in the office, which is almost always in demand, but searching for those documents is streamlined. Bookkeepers can save hours that would otherwise be spent shuffling papers on higher-level tasks.
Integration with Third-party Apps
Customization is another key factor as business line applications, all working in the cloud, can integrate with other apps and sync seamlessly with data sources like banks. The right mix of integrated apps can create a powerful workflow, shifting the role of the bookkeeper from data entry to quality control.
With these integrations, businesses can automate certain bookkeeping tasks like recording expenses, reconciling payments, and collecting timesheets. Cloud-based bookkeeping technologies reduce, and sometimes eliminate entirely, the need for manual data entry. Instead, these applications will allow businesses to sync bank and credit card accounts so that financial transaction data is automatically downloaded.
Bookkeepers Adapting to New Processes
But even as cloud technologies can help bookkeepers, by introducing efficiencies into their routine accounting processes, there is a danger that some traditional bookkeepers will get left behind. We’re already seeing how cloud technology is changing the way many businesses run their back offices, with the expectation that financial data should be always up to date, readily accessible, and accurate.
Gone are the days when small and mid-sized businesses could rely on a mad scramble at tax time to bring their financial records up to date. Now, smart businesses want that financial data available on-demand for forecasting and strategic planning. Bookkeepers need to be aware of these expectations and able to adapt.
We’ve seen how, in many industries, new technologies can replace human jobs with automation, but machines can’t replace the analytical human mind. Instead, new technologies can make life easier for accounting professionals by reducing repetitive tasks like data entry, manual filing, and routine calculations, and allowing them to take on more complex, and strategically relevant roles within the business.
By learning to use technology like cloud accounting tools, traditional bookkeepers will not only keep up, but stay ahead of the curve as the profession continues to undergo transformation.
At Enkel, our bookkeepers focus on helping small business owners and not-for-profit organizations make better decisions through cloud technology and accurate and timely financial data. Whether your company is located in Vancouver, Edmonton, Calgary, or Toronto, we’ve got your bookkeeping needs covered! Contact us today to learn more.