Accounting Automation is Accelerating from 0-60
Even before COVID-19, the accounting industry was already on track to change more in the next 12 months than in the previous 12 years. Automation driven by artificial intelligence (AI) and machine learning (ML) is completely disrupting how accounting firms market and deliver their services.
At a recent Vic.ai webinar, we asked the question: How important is accounting automation to the future of your firm? We found that 88% of attendees said automation is hugely important to their firm's future. However, historically clients have looked for accounting firms with a local or regional presence.
The rise of cloud accounting has changed that and opened the door to an emerging category of accounting firms, like outsourced accounting, that is not geographically constrained. The paradigm shift we're all operating in right now continues to accelerate that, and a few hybrid, technology-savvy bookkeeping firms have raised large amounts of venture capital.
These hybrid bookkeeping firms are increasing the pressure on traditional accounting firms to adopt the same kinds of AI and ML technology or risk potential irrelevance in the marketplace. So, in a lot of ways, the time for procrastination and kicking the ball down the field and denial has long passed.
The only question that you should be asking yourself is, is your firm going to future-proof itself to aggressively adopt technology where it needs to remain competitive? Or is it going to risk becoming irrelevant?
The Evolution of Accounting Technology
So how does this all come together? What do you need to think about when you’re looking at the future of outsourced accounting and accounting technology?
It's really important to first take into account where all of this came from. And it’s critical to understand the pace of change.
Before there were PCs and before the early 1980s, things were largely the same. The history of double-entry accounting goes back hundreds of years, and the Abacus goes back thousands of years.
It was only starting in the 1980s that we saw the arrival of Lotus 1-2-3 and later WordPerfect, the original PCs and the original Macs came into play. Once we got to that stage of history, things remained relatively similar, with only incremental innovation.
And then along came the World Wide Web, email, and the Internet in the mid to late 1990s, all going mainstream by the early 2000s.
After that, for the next 10-15 years, we moved into the era of SaaS and cloud computing and buying software and subscriptions.
But what's very different about where we are now, is AI and ML have become tightly interwoven into what we do daily, both within our personal and consumer applications and business to business.
Beating Them to the Punch: Why Accounting Firms Need to Disrupt Themselves
Familiar with Spotify, Amazon Alexa, Uber, or Lyft? The trend is only going in one direction, and it’s going to happen much faster. AI and ML are going to reach the tipping point of mainstream adoption in a matter of months.
It’s important to stay on your toes about the future of accounting technology and keep up with what's going on. Otherwise, you might end up like that other, previously well-known company, Blockbuster Video.
If you remember way back when, there was a time when people used to go and rent VHS movies. Neither Redbox nor Netflix were even on Blockbuster's radar as late as 2008.
And I'm sure you’re familiar with the story of the guy who rented a movie and got hit with a late charge. He didn't like the late charge, so he decided to start a mail-order business renting out DVDs, which eventually became Netflix, which became wildly successful in defining a whole new category of entertainment and media consumption.
So the message with all of this is to think ahead and try to disrupt yourself. By that, I mean put yourself in a position where you understand what your clients are looking for and figure out a way to deliver that to them. And with the upheaval of COVID-19 and work from home policies, it’s more important than ever to consider how to deliver better client value through outsourced accounting and efficiencies like accounting technology and AI.
If you have some predictions on the future of outsourced accounting or have some tips on invaluable accounting technologies, leave your comments below.
And if you want your firm to stay competitive in these unprecedented times, check out the webinar on-demand “The Future of Outsourced Accounting and Accounting Technology.”