The three basic financial statements show your startup’s overall financial health. However, minor mistakes can affect the accuracy of these reports.
July 27, 2021
As artificial intelligence (AI) transforms industries across the board, accounting is likewise on the precipice of major technological changes. Leading accounting firms have pledged to invest billions of dollars into the development of AI and data analytics technology in the coming years, signaling a drastic shift in the accounting world.
But it's not just the Big Four who will see the effects of these technological advancements; forward-thinking accounting firms at every level have already begun to harness the power of AI to provide superior accounting and finance services.
Below, we'll take a brief look at the current issues facing the accounting and finance industry, how emerging technologies are shaping the future of accounting, and the key skills accountants will need to succeed as the field evolves.
To understand where the accounting industry is headed, we first have to consider where we are now and identify the biggest challenges facing the accounting profession today.
The long list of finance functions required to operate a business—bookkeeping, bill pay and invoicing, financial projections, payroll, employee reimbursements, annual taxes, and so on—are performed by several different financial experts. Each of these experts works independently and uses a different set of tools to do their job. Generally, those tools don't talk to each other, requiring finance professionals to perform manual data entry and re-entry.
People make mistakes—even when they're exceptionally good at what they do. The more people entering financial data and performing calculations manually, the more mistakes there will be. For accounting in its current state, with Excel sheets flying back and forth, these mistakes are simply a fact of life. The potential for human error is even greater when accountants must complete these various bookkeeping and accounting tasks as quickly as possible after the end of the month.
Accountants usually start working on a business's books after the month ends, finalizing and sending the financial statements three weeks later. After that, it takes even more time for executives to dig into those reports. By the time they've had the chance to pore over statements, these executives are making vital business decisions based on information that's sometimes more than a month old. This is a huge problem, especially in the often cash-strapped and fast-paced world of startups.
Among the numerous complex and interrelated technologies shaping the future of the bookkeeping and accounting industries, two stand out for the impact they’ve already begun to have on the industry: artificial intelligence (AI) and cloud computing.
Perhaps the single most important technology moving the accounting industry forward is artificial intelligence. Simply put, AI is a branch of computer science focused on creating machines that carry out tasks and make decisions in a way that imitates human intelligence.
Some virtual bookkeeping services have already begun to use subsets of AI like robotic process automation (RPA) to automate repetitive tasks like categorizing transactions and recording data in the correct formats, drastically increasing both the speed and accuracy with which they're executed.
The other technological development that has already started to reshape the industry is cloud computing. In contrast to some other developments in accounting-related tech, cloud computing—the storage, management, and processing of data on a remote server accessible via the internet—is well-developed and easily accessible. Used in conjunction with AI, cloud computing can minimize fragmentation and allow real-time monitoring of financials.
While the tech-savviness to understand and use new tools will be important, soft skills like the flexibility to adapt to a rapidly changing environment will likely be even more crucial as the industry evolves. Additionally, as menial tasks are automated, accounting professionals will likely occupy a more strategic role requiring strong communication and leadership skills.
Ultimately, these developments mean that accountants and finance teams will spend less time on busy work and more time applying their skills to things that matter.
Some leading firms have begun to harness the possibilities of new technologies like those discussed above, but Zeni's accounting platform and procedures are the first to be built on AI, machine learning, and RPA technology from the very beginning. By treating these technologies as foundational rather than an afterthought, Zeni offers more extensive automation and a more seamless user experience.
Zeni utilizes cutting-edge technology to address the current accounting issues discussed above, giving customers highly accurate, real-time data, all consolidated into a single platform with financial insights, and available 24/7 via the Zeni Dashboard at no additional charge. Our experienced finance team of CPAs, tax advisors, accountants and CFOs work in tandem with Zeni’s AI-powered platform to deliver expert finance management services for startups.