Technology has revolutionized every facet of our life. Whether it be the personal realm, the social construct, or the corporate world, you can find its effects everywhere.
It comes as no surprise that a field and career path as technical as finance has also been positively impacted by technology.
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According to Datis, over 73 percent of Chief Financial Officers agree that organizations use various digital tools to best streamline their operations. Similarly, Finances Online reports that 29 percent of automated technology available is used for accounting automation.
Yet, 92 percent of accountants are not ready for the future, as per AICPA. To change this, it is imperative that the accounting and finance workforce is introduced to the various accounting tech innovations early on.
Here are the elementary innovations that must be used by financial officers of any organization.
1. Financial Forecasting Systems
A recurring trend in modern times is predictive analysis. With the influx of data, companies and analysts now have enough information to make predictions about the future. For instance, a bakery can look at its everyday sales of the past few years to predict the per-day sales of the future!
This predictive analysis is also found in finance in the form of financial forecasting. Many tend to confuse this with budgeting. However, the two are not synonymous.
While budgeting sets benchmarks and quantifies expectations a given company might have about its sales and revenue, financial forecasting takes into consideration historical data to predict actual revenues that are likely to be experienced in the future.
There are various solutions that streamline this forecasting process by applying the required models. For instance, sometimes, you need to use a logarithm to transform data. At other times, percentages or regression must be used.
While small businesses may only need a spreadsheet to forecast their financials, larger organizations with a lot of data will need dedicated software for it. Here are some of the considerations you need to keep in mind when selecting a system or software.
- Choose between a cloud-based and an on premise option.
- Assess the price, long-term cost, security, and scalability.
- If you wish to report your forecasting, look for solutions that offer properly formatted reporting, visualization, and dashboard access.
2. Cloud-based accounting
Did you know that, according to data collected by Hosting Tribunal, a whopping 90 percent of firms use cloud-based solutions? By 2023, the global cloud computing market is likely to cross 623 billion USD in revenue!
This tech innovation has become a staple in the world of finance as well. All financial functions make use of cloud-based accounting, whether it be taxes or benefits payment. Why? This is because cloud-based solutions allow for real-time changes to occur and be communicated across the department.
Various automations available reduce the workload of the department while moving processes to a cloud service removes the prevalent burden from the IT department of the company.
You will find various best small business accounting software out there. Cloud-based solutions allow financial officers to streamline their operations in a smarter way. It is specifically ideal for B2B businesses dealing with a plethora of clients.
For starters, it automates all tasks like client follow-ups, time tracking, book-keeping, and organizing expenses, to name a few. When looking for accounting software, here are some of the features you should look out for:
- Impeccable customer support and low downtime
- Required features like book-keeping, budgeting, balancing, payroll accounting, etc.
- Automated reminders of late payments and adjustment of late payment fees.
- Ability to generate recurring client profile/client orders to reduce redundancy of work.
- Secure and automatic scheduled of billing of clients.
3. Optical Character Recognition
Remember the time when the accounting team had to manually enter the data of each receipt? Well, those days are long gone! This has been made possible by an accounting tech innovation called Optical Character Recognition (OCR) which had a market size of over 7.5 billion USD in 2020, as per Grand View Research.
What is OCR? Well, this technology automatically captures all the data reflected in invoices. This reduces the need for manual data entry and hence makes the finance department much more efficient. Further advancement in this technology has allowed firms to use mobile cameras and scanners to successfully capture printed financial information and automatically translate them into digital files.
This means that there is no error made during this process, which further boosts the efficiency of the task. Other uses of OCR include:
- Scanning of handwritten checks.
- Validating signatures of people.
- Clearing of checks in real-time.
4. Integration of solutions
Finance is surely the backbone of a firm. A lot of its information is used by other departments for their operations. For instance, the marketing department relies on budgeting to create its marketing budget. Similarly, access to financial information is required for stakeholder meetings.
As financial officers know, there are various aspects of finance. This includes taxes, expense tracking, invoicing, budgeting, payroll, etc. Usually, different software are used to supplement each task. This includes CRM, CMS, and ERP solutions.
Often, translating the data from each of these solutions leads to errors that in turn increase in size every time it is passed around. For starters, let’s say the marketing department created a budget based on an erroneous forecasted revenue. This, in turn, will place the burden on the company’s future funds, leading to a snowball effect.
A tech innovation that has mitigated this challenge is the integration of available solutions and software. By linking CMS, CRM, and ERP solutions with one another, financial officers can create a unified solution that can be accessed by the authorized users of each department.
This ensures accuracy in reporting and also allows real-time access to information.
The chances are that your firm is already utilizing some of the mentioned tech innovations. If not, now is the time to implement them in your operation. There is no downside to this deal! Instead, you will be able to improve your efficiency and productivity.
Do you think there are any other worthy accounting tech innovations that should be a staple for financial officers? Let us know!