(Navin Mishra- Director- Emerging Market Corient BusinessSolutions Pvt Ltd)
Technology is altering how modern-day businesses operate. From management to finance, everything is getting digitized. The same is true of accounting, which is becoming simpler and more effective because of speedier technologies that can deliver complicated tasks well in time and with accuracy. The ability to organize financial data, analyze it, and gauge economic activity has never been easier.
Today, many accountants use cloud-based platforms to organize their data, which provides easy access to real-time digital records, irrespective of time and place. Technology makes it easier to gather and use e-documents, synchronizes information across systems, and provides secured automatic backup of files. With the use of technology, the previously redundant and tedious tasks of faster transactions, data gathering and computation, and accurate tax fillings, among others, have become simpler and led to cost and time savings. The market for accounting software, valuing $11.9 billion in 2020, is anticipated to increase at a CAGR of 19.6% between 2021 to 2030 and value at $70.2 billion.
However, there are challenges to the adoption of technology in accounting.
● The first and most important challenge is the initial cost associated with the incorporation of updated technology and the cost of its maintenance.
● The second challenge is the adoption of user-friendly technology and its professional utilization, which is critical to face the cut-throat competition. No matter how updated the technology you have, it remains important to see if the technology is conveniently comprehensible and if the staff is skilled enough to work with it.
● And last is the challenge of security. Accounting information holds some very critical data of clients which if leaked could be damaging for both clients and providers.
There is one sole solution to overcome these problems of utilizing technology in accounting and it is outsourcing. Businesses typically prefer to maintain their core operations in-house. But as technology has advanced and the workforce has become more globalized, more businesses are seeing the advantages of working with a third-party company to handle operations. The global market for finance and accounting outsourcing, valued at US$37.9 billion in 2020, is anticipated to increase at a CAGR of 5.9% between 2020 and 2026 to a value of US$53.4 billion. Following are how outsourcing can facilitate technology utilization in accounting.
Hiring full-time professionals and affording the newest technological advancements can be costly for accounting departments. However, outsourcing firms reduce the overhead and fixed costs related to accounting and make investments in cutting-edge technology, offering numerous advantages to their clients. A seasoned finance and accounting outsourcing firm will offer cutting-edge technology for less money than your company’s current technology costs and also save you from the worry of technology becoming obsolete. Other than this, using technology with a subscription for upgradation can also be a method of overcoming technology-related costs.
Professional and user-friendly services
Outsourced financial specialists can provide more value to a company while completing the same tasks more quickly and with less error. This reduces penalties and missed deadlines. A majority of accounting service providers today are equipped with cutting-edge automation solutions, giving access to the newest cloud-based tools and technologies to improve your ability to manage payments and speed up the payment process. Outsourced accounting activities guarantee that professionals handling accounting tasks stay current with the newest technologies and preserve a competitive edge even in peak times. Also, data and reports from various systems and sources can be extracted and merged into one. With cost-effective technology from outsourced firms, this integration of information becomes seamless.
Outsourced accounting firms provide professionals with expertise in handling and shielding security systems from internal as well as external threats. Several tools like firewalls and password restrictions are used to secure the accounting data of clients. Other than that, outsourced firms can provide technologies like blockchain that are encrypted and secure digital ledgers for recording transactions.
The accounting sector is rapidly and irrevocably changing due to technology. These problems will persist for accounting businesses even in the near future. Accounting businesses need to realize that to survive in the coming years they will need to transition to a business model that is customer- and technology-focused. Making the transition to digital will require careful planning to avoid any roadblocks and humps. An accounting outsourcing firm can achieve the digitalization goal by taking over the complete planning and execution of the process. Once the initial challenge is overcome, it will be well worth the wait to begin reaping the rewards of automating and digitizing routine processes while prioritizing more important ones.