Knowledge of accounting automation trends is a dire need for businesses that need to frequently adapt to different regulatory requirements. The accounting and financial management industry is rapidly changing to cope up. With so many new trends emerging, it’s important for organizations to stay current with the latest accounting software and hardware.
These innovations in accounting software have the power to drastically change how you manage finances, track revenue, analyze performance, and much more. By analysing these trends your business & how they could be applied to your operations, you can gain a competitive edge and improve business efficiency too. In this article, we’ll explore the key trends that will transform your business if you implement them.
Financial Reporting Automation
Adoption of artificial intelligence and machine learning has led to an exponential increase in the amount of data organizations have at their disposal. And with data becoming more accessible and more accurate, organizations are exploring new ways to use it. For example, a large bank is using AI to help financial analysts understand the data more easily and make decisions more quickly.
By creating visualizations of data, analysts can see patterns that were previously too complicated for them to comprehend. Another organization is using AI to help audit the accuracy of financial data. With the help of AI, auditors can flag data that isn’t accurate and help the organization correct it before an audit is missed. This kind of AI-assisted auditing can reduce the auditing process’s typical timeframe from weeks to days.
Data Driven Accounting
Increased interest in AI and machine learning also led to a surge in the use of data in accounting. With more data being used, the need to analyze it and drive better decision-making increased. Now, many organizations are turning to data-driven accounting to achieve greater results. One organization, for example, is using data-driven accounting to optimize their financial processes.
By analyzing data, they were able to identify what caused certain costs to increase or decrease. Armed with this information, the organization was able to make decisions that reduced costs without cutting back on service. For e.g. data driven accounting can be used for increasing or decreasing customer credit limits based on their industry performance, past payment history and loyalty scores etc.
Artificial Intelligence in Receivables/Payables
The use of AI in accounting is growing rapidly. And as it becomes more common, it will have a major impact on your business. One area where AI will have a major impact is the automated auditing of financial data. AI can help audit decision-making by using data to identify anomalies and flag inaccurate data.
By automating this process, organizations can reduce the effort required to complete auditing tasks. This could save time for auditors who have other priorities in their workday, as well as for financial managers who rely on accurate financial data.
AI based accounting software can be used for bank reconciliations, customer receivables, payables, and managing vendors etc. The accuracy rate of these systems is improving, which is useful in saving time and efforts for accounting. Organisations are now increasingly using AI for accounting.
Blockchain in Accounting
While artificial intelligence is growing rapidly in accounting, blockchain is seeing a more moderate adoption rate. One reason for the slower growth of AI versus blockchain is that the technology behind it is changing the world.
The blockchain technology behind cryptocurrencies like bitcoin is disrupting many industries. And with its ability to process transactions and provide tamperproof security, it could transform accounting. AI is also growing rapidly. But to be used in accounting, it must first be automated and validated.
This can be difficult to achieve with AI, but the blockchain technology behind cryptocurrencies provides a secure, tamperproof data pipeline. These two trends are transforming the financial industry and the blockchain technology is making it possible.
Internet of Things (IoSw) in Accounting
The Internet of Things (IoT), which is the integration of electronics, sensors, and other devices in automated systems, is expanding rapidly. Manufacturers and retailers, for example, are integrating the IoT with their accounting software and sensors to monitor inventory levels and performance. The IoT has two major uses in accounting: inventory management and revenue recognition.
Inventory management is when devices connected to the Internet send data about inventory. This data can be used to manage inventory by knowing what it is, how much inventory remains, what sales have been, and what expenses have been incurred.
Revenue recognition is when devices connected to the Internet send data that can be used to validate revenue. By using the data from the sensors, organizations can identify whether a customer has received an order and is receiving the product or has made a purchase and is paying for the service.
Robotic Process Automation (RPA)
RPA is an emerging trend that uses automation to replace human resource managers or process administrators where possible. RPA is a subset of automation that automates the execution of business processes. In accounting, one area where RPA has been used is fraud prevention. Organizations that suspect fraud often employ RPA to start the fraud investigation process.
They use the data collected by sensors to identify a pattern that suggests fraud. From there, they can use analytics to determine whether this is a genuine pattern or if a person is trying to deceive the company.
The accounting and financial management industry is rapidly changing. With so many new trends emerging, it’s important for organizations to stay current with the latest accounting software and hardware. If you don’t adopt these trends now, they may leave your business behind when others are adopting them.
The financial industry will soon be using artificial intelligence and machine learning to create automated reports, visualizations, and auditing. This will help you better understand your business and make better decisions. And with the power of blockchain, you’ll know for certain that your financial data is accurate.
Kreyon Systems provides end to end accounting automation for enterprise clients & government organizations. Our Finance & Accounting software is used by public companies. If you need assistance, please get in touch with us.