How Technology Can Change the Way Accounting Works

How Technology Can Change the Way Accounting Works

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Thanks to new technology, the accounting industry has been going through several changes. These changes have enhanced how businesses can keep track of their bookkeeping needs. For example, accounting tasks are not as time consuming as they once were now that computers power the information that is stored in accounting software. There are many other ways in which technology has impacted the way in which accounting processes are completed.

Here is a list of a few of those changes that have been the result of technology:

1. Innovative Tax Software

With new technology, the quality and accuracy of bookkeeping has improved immensely. In fact, with tax software continuing to improve, businesses of all sizes can benefit from this way in which technology has impacted the accounting industry. It has actually led to an industry of itself – accounting software. Programs available, such as Xero or qbo, make keeping track of all the cash flow details of an operational business easier, faster and smoother. With the ability to create accurate reports on every aspect of the money end of your business, an accounting software program will help you to prevent collecting tax penalties as a result. And nobody wants to have to deal with any kind of penalty if you have the technology in place to prevent it from happening.

2. Social Media Contact

You may not see this connection immediately but the technology that brought us the internet also brought us social media platforms. It is through these that communication with customers is more direct, personal and instant. So, this applies to the accounting industry in which way? Well, customers who may encounter issues related to invoicing or customers that require invoicing can be contacted easily through social media prior to the issuing of any type of invoice through the accounting software program.

  • This improves customer service and gives you a direct line to the people you are servicing through your business. The other side of the coin is that through social media interaction your company becomes more of a believable entity that reaches out to the customer base and works on problem solving.
  • The downside to this is that social media can also turn on you where you may end up wasting time doing damage control thanks to some negative feedback that may get out of hand. Aside from that only negative, connecting your business in the places your customer lives online is always a good idea.

3. The Cloud

Here’s one of the biggest pieces of technology to impact the accounting industry. Again, with a nod to the internet, accounting practices can be handled in more than one way. One relatively new approach to this is through something called cloud accounting. It is basically an internet-based computing system that provides shared resources and data to other computers and devices in an on demand basis. What this really means is that accountants or your bookkeeper can access your company books from anywhere they can find a wifi connect and can do whatever work they need to related to your business financials.

4. Handheld Device Accounting

Okay, it’s probably better known as mobile accounting. Regardless, technology has given us the ability to handle many different tasks while on the go. Accounting is one such task. Since all of us – including the crew in the accounting department – are becoming more and more accustomed to doing work-related items on our smartphones, it just makes sense that mobile accounting would be one such innovation in today’s technology. This actually allows you and your bookkeeping department to manage accounts and such while on the move and away from the actual work place. Need to send an invoice somewhere and you happen to be on holiday at a tropical paradise? No problem! Mobile accounting can help you complete that task quickly so you can get back to the beach.

5. Optical Character Recognition Technology

You may know it as simply OCR technology. Essentially this is the process where PDF files, digital images or scanned paper documents can be converted by an accountant into files that can be edited and searched. Say what you will about this kind of file collection but ultimately your accountant is saving time doing the conversions which actually ends up saving you money. The new documents resulting from OCR are now easier to archive, locate and work with. All of these factors have had a positive impact on how technology has changed the accounting industry.

6. Email, Texting, Etc.

These may sound obvious, but before technology got into the accounting industry the only way you could communicate with your accountant or bookkeeper was either via the phone or face-to-face. While both of those methods are still very much the most effective way to discuss plans or any other matter related to your business accounting department, technology has made it even easier. You can text or email all over the world with ease. Documents can be sent back and forth and if your accountant doesn’t live in the same community as you do business, technology has given you options on how to get in touch and stay in touch. We just didn’t want to complete this list without including this very important part of the technology/accounting industry equation.

In Conclusion

The accounting industry has evolved steadily over the years. What has likely forced it to become more current with more frequent updates is the world of technology. Accounting software was born from it and continues to thrive. The demand created by the business world has pushed accounting into a whole new category where software and additional internet options have forced accounting to evolve even faster. The ability for technology to keep moving forward will continue to create a path for future programs and additional innovations to existing programs. The bottom line is that technology has had a very positive impact on accounting and is going to always have a positive impact on this vital business service.