Amanda Wapenaar | Partner Development Specialist | PaySpace | mail me |
Accounting is in a very exciting space. Access to modern technology has been changing the profession for several decades already. But today, it stands at a crossroads that shapes accounting’s future – a break away from the routine capturing, recording and presentation of historical data.
It’s very exciting! When I started studying, it was the most boring process. I didn’t want to do people’s books. Even in school, if you had accounting, it was just manually entering the debits and the credits, and the software was horrible. So I think it’s really exciting how technology has enabled accountants to move forward.
What does she mean by enabling accountants to move forward? This new epoch is about much more than digital spreadsheets – it’s possibly the most significant evolution in accounting’s long history.
Accounting’s origins
Accounting can take credit for the invention of writing. Long before people committed fantasy epics and history to text, they relied on writing to record transactions and manage inventories. The earliest discovered forms of proto writing circa. 8000 BC are clay tokens with symbols to negotiate items and values between different language groups. Bronze-age civilisation used writing to manage vast trade networks.
The ledger became a symbol of good business: until the early 20th century, bosses would pay accountants to fill ledgers with nonsense so they could brag about the size of their books.
Accounting, in essence, is the gathering of raw data from business activities and applying accounting and tax rules and regulations to transform that data into compliance information, such as financial statements and reports.
Accounting also prepares tax returns, ensures that tax is paid properly and on time, and provides data for planning and decision-making. So, budgets, forecasts and the tracking of cash flows, ultimately help organisations to run efficiently.
Such tasks still matter today and will continue to play critical roles in running businesses. But the profession brings more to the table – functions often overlooked and underappreciated by customers, demanding the accountant’s valuable time. For example, businesses want to save on tax and present compliant paperwork. But do they realise how much time accountants spend on correspondence with entities such as revenue services or complying with evolving laws?
Embracing and enhancing these areas of the practice are significant signs of accounting’s current seachange. A lot of people tend to think that accounting is the reporting and capturing of data. And for many years, that was the case. But when accountants move to more automated systems, where software captures the data, they can focus on analysing that data and advising their customers.
The new value of accounting
Accountants are well-positioned to advise on savings or predict the outcome of a future decision. This shift as the most significant for the profession. They are moving from a historical view of information to a much more real-time view of business information.
Automated software can capture and compile historical data, freeing time for accountants to focus on what that data tells them. This extra capacity also lets accountants expand their operations into underserved areas. Accountants have progressed to one-stop shops offering clients services that go beyond accounting purposes. For instance, payroll and HR. It’s not just accounting anymore.
Digital technology is not new in the profession. But modern cloud platforms power a new generation of more feature-rich yet affordable accounting software.
Using a cloud platform, accountants can automate data capture and compliance management. They can offer self-service tools and quick reports to clients, and conveniently expand into other services such as payroll management – without needing to own the underlying software or pay handsomely to acquire such new systems.
Using these platforms, accountants can organically expand what they offer to their customers, scaling in a fashion they can manage. This approach opens the door to becoming partners with their clients. Accountants can adapt to more of a partnership with their clients. It’s a more value-added approach instead of just recording what has already happened. You have all of that information in real-time; you can report and advise on that.
Hence, today’s accounting changes are among the most significant in the profession’s history.
In conclusion
Granted, the invention of writing will always be the most substantial. But today’s accountant – using modern cloud platforms that give them more capacity, flexibility, and revenue streams – marks the start of a new type of accounting that supports innovative and more efficient business models.
We hear this directly from accountants that use cloud platforms. A lot of their work was always manual and they didn’t have the capacity to serve their clients on different avenues.
The software was not really there to enable them to do that. But the software available in the market now offers accountants more without having to hire extra staff or put in a lot more work. They grow their businesses, serving and advising clients better.