What’s driving accounting’s evolution?

The earliest evidence of accounting was discovered in ancient Mesopotamia, Babylon, Sumer and Assyria. Some 7,000 years on, practices may have improved but the need for the financial management of goods, stocks and transactions has remained essential. From recording barter on a paper ledger to double-entry bookkeeping using an Excel spreadsheet, the tools used to balance the books have evolved with the times. Automation is the logical next step.

Why is automation required? Because today’s accountants are operating in a maelstrom of opportunity and challenge. Global transactions have increased thanks to the internet. Post-pandemic business recovery, geopolitical uncertainty and the ‘new normal’ in working practices are also forcing finance functions to overhaul their processes.

These factors have increased reliance on accountancy professionals. Today’s accountant is increasingly fundamental to strategic decision-making. They are more in demand for their analytical abilities, which provide the crucial link between data and decision.

Here we look at the elements shaping change and how automation can deliver positive change.

Complexity

The internet has made the world a smaller place when it comes to commerce. This means the volume and complexity of data has increased, and with it the demand for more technically proficient and agile accounting capabilities.

Global uncertainty has also placed greater pressure on making faster, better business decisions. The finance function sits at the heart of strategic decision-making. But as demand increases, finance departments face several constraints:

• Talent - the pace of business has increased as finance departments are finding it more difficult to attract and retain staff with the right skills. The Great Resignation phenomenon saw a record number of staff quit their jobs over the last two years. Talented accountants now expect greater levels of flexibility and roles with fewer low value tasks. Fail to deliver on the employee experience, and an organization will soon have a staff shortage. And as the pace and volume of work increase, time-poor staff are at increased risk of burnout and making mistakes.

• Tools - Many accountancy operations are still struggling with the spreadsheet. While a tried and tested tool for decades, the spreadsheet is only as good as the skills of its users and is often vulnerable to errors, functionality shortfalls and adequate security. A 2021 survey by the Institute of Financial Accountants found automation, the use of AI and cloud-based accounting tools would have the most significant impact on the future of accounting, yet a knowledge gap was acknowledged with 47% identifying the need for training in the use of new technologies.

• Remit - the finance function of today has a much wider scope of responsibility and is expected to greatly contribute, if not lead, cross-functional strategic direction. But true insight is impossible without real-time, granular data availability. The need for constant analysis to make informed decisions is vital if a business is to be competitive.

• Challengers - the proliferation of accounting apps or virtual services that dispense of the need for professional input are changing the way businesses choose services, and access and interact with their finances. It’s vital an accountancy organization’s technology stack is flexible enough to incorporate new technology to maintain competitiveness and keep up with customer demands.

• Data - the complexity and volume of data is growing. Ensuring the finance function has the tools and skills to handle, monitor and analyse disparate variables on demand is vital for optimum decision-making. Plus, with growing interest in sustainability, investors want more than financial data, for example they want to understand more about a company’s ESG investments based on data they can trust.

The case for automation

Increased workload and ever-increasing expectations for speed and transparency mean accountants need to embrace more efficient ways of working.

Digital transformation has already helped many organizations supercharge the way accountancy operates in a more pressured, budget-restricted, time-poor operating environment. Investment in a more streamlined system removes costly inefficiencies, and improves the employee and customer experience.

Thomson Reuters ‘Accountancy In 2028’ survey found more than 95% of the accountants surveyed said their role was likely to change due to technology, with respondents identifying the top three tasks that would be automated by 2028 to be bookkeeping, data collection and tax returns.

Automated reconciliation

Many finance departments are adopting game-changing automatic reconciliation technology. This offers businesses better end-to-end control of their data so they can better monitor complex and extensive transactions. Software can be tailored to specific needs and can seamlessly integrate with existing technology stacks.

Automated reconciliation minimizes risk, errors and delays, and frees up employees to tackle more important tasks. Workflows ensure anomalies and errors are quickly identified and assigned to the right person to action, with a comprehensive audit trail ensuring transparency at every stage. An informative dashboard of data means collaboration and reports can be created easily, maintaining collaboration and communication whether teams are dispersed or in the office.

The strongest automated reconciliation technology facilitates:

• Greater decision-making agility
• Ability to scale
• Enhanced data analysis and reporting
• Richer insights leading to better problem-solving
• Data visualization functionality
• Better customer satisfaction#
• Time efficiencies
• More efficient use of human resources
• Proactive workflow system
• Secure, up-to-date technology
• Greater investor and customer confidence

In summary

An effective accountancy function can transform a business, helping it achieve its goals from hiring and procurement to supply chain and sustainability. Automation can drive effectiveness, and open opportunities for growth, cost-savings, customer and employee experience, while delivering peace of mind on internal controls, reporting and regulatory compliance.

How can we help?

We are financial data matching software specialists. For more than 14 years Aurum has been helping some of the world’s most recognizable brands achieve their reconciliation goals.

We help put businesses in the driving seat with their data, ensuring compliance and control with a quality product tailored for each client’s needs. We work across industries and have a diverse client list including Center Parcs, Ladbrokes, Fullers, and Versapay. Our partnership approach ensures we’re always on hand on your reconciliation journey.

Let us show you how our technology can empower your accounting. Book a demo with us now.