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Modern trends in technology are impacting every sphere of business activity, not least of them, accountancy. Conversational user interfaces are creating the new invisible era for accounting, the Internet of Things represents the prospect of real-time accounting, and blockchain technology promises to lead to frictionless supply chain movements
As an accountant, you have seen how computerised accounting packages and the arrival of mobile and cloud computing have transformed the profession. As huge as the impact of those technologies was, we’re just at the beginning of the invisible accounting revolution that will completely change the way financial professionals work.
We’re forecasting that artificial intelligence (AI), the Internet of Things and the blockchain will bring about this era of invisible accounting. This is an exciting time for entrepreneurs and their accountants. These smart technologies will simplify and make it possible for organisations and their accountants to focus on the things that truly add value to the business
At last, we can spend more time focusing on the things we care about most, such as working with clients or the business’s leadership on strategic financial plans. These technologies will free us from more routine admin work while ensuring that we can work more accurately and efficiently. They will also give us more real-time visibility into our financial performance.
Talk to me: the rise of smart bots
Machines today are smart and they increasingly speak the same language we do. The consumerisation of messaging apps (over 2 billion users) such as Facebook Messenger, Slack, and WeChat, and voice interfaces like Amazon Alexa and Google Home, has made consumers comfortable and familiar with the convenience of the conversational interface.
Think about how you can simply ask Siri on your iPhones for direction or the answer to a trivia question. Samsung is also getting into AI with the upcoming Bixby on its new devices. Our interfaces to technology are becoming more natural as we use voice, gesture or touch to interact with computers rather than a mouse and keyboard.
In the background, AI technology crunches massive datasets to help us complete our personal tasks or our work. This technology doesn’t simply follow a set of programmed rules, it can also learn from our responses and its databases to improve its functionality and its usefulness over time. For now, consumers are the biggest users of such technology, but it is rapidly moving into the business world, too.
Imagine how useful that might be if one of your customer’s phones you for an invoice when you’re out-and-about, and you don’t have easy access to your computer. You can also note expenses, so you don’t forget to file the receipt for your parking when you’re out on a business visit. This sort of technology is going to rapidly evolve so that you will be able to ask your virtual accounting assistant a wide range of business questions, without needing to dive into tables and fields in an accounting package to get an answer.
As an accountant, I’m always excited to find a technology or process that reduces the ‘friction’ of administration. By friction, I mean the time and effort it takes to record transactions or complete tasks.
The Internet of Things – the many smart and connected devices in the workplace – will do a great deal to reduce friction. It can give us real-time information about assets and transactions so that we don’t need to record it after the fact.
For example, a telematics device or GPS in a company car could automatically capture mileage information and upload it to the accounting solution so drivers don’t need to report in with their logbooks. Or we can track items as they move through the supply chain for an up-to-the-second view of sales and inventory on hand.
Building on blockchain
I’m also excited about the potential of blockchain. The blockchain is a type of distributed ledger or decentralised database that keeps records of digital transactions. All participants have an identical copy of the transaction that can be accessed and viewed in real-time, and all parties need to verify the authenticity of a set of transactions (a block) before a new block can be added to the existing chain.
Blockchain records cannot be altered, and every transaction is recorded and verified. As such, blockchain brings new levels of trust and transparency to transactions. When we bring blockchain and smart contacts together, we can automate many processes where we have used to need an independent third party (like an exchange, lawyer or clearing house) to verify transactions.
In future, companies big and small could use blockchain for invoicing, documentation, contracts, and payment processing, all done with high levels of automation and low levels of friction. We’ll spend less time on ledger entry and reconciliation in the book-keeping process. However, there will still be a need for a human touch as accountants and auditors need to ensure that local tax and other regulations are applied.
Where does that leave us accountants?
As these trends show, more and more tasks that once needed an accountant’s supervision or intervention are going to be automated. Things like capturing and updating data, producing reports, and doing bank recons, are already automated, but we can expect automation to go to the next level. This means bookkeepers and accountants need to reinvent themselves.
Our role is no longer merely to check the numbers and keep the records, but to help the business optimise its finances. This is great news rather than a threat to our profession because it means we can focus on adding value to the business rather than on time-consuming and compliance-focused tasks such as preparing reports and statements.
We can spend more time on helping clients to assess financial risks, understand the latest tax and regulatory developments, and provide ideas about cutting costs and improving profitability. The good news is that accountants, whether working in-house for a business or as advisors to a number of clients, can take a more strategic role. Our business acumen and social skills will be as important as our mastery of numbers in the future.
Invisible accounting by 2020
Going beyond cloud computing, which is now a given starting point for many organisations, the use of AI and other innovations will lead to Sage’s vision of invisible accounting by 2020. This is a seamless and automated accounting process that will enable us to think about business growth and strategy rather than recording invoices and doing bank recons.
Author: Anton van Heerden CA(SA) is Managing Director and Executive Vice-President, Africa & Middle East at Sage