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Accounting

Accounting Technology: What it is and how it works

As companies emerge from the COVID-19 pandemic and face subsequent challenges resulting from The Great Resignation, technology has emerged as a necessity for small and large businesses alike.

From enabling online ordering to facilitating remote work to overcoming labor shortages, technology can streamline accounting processes, improve the customer experience, and help scale businesses—even amidst a challenging backdrop.

This is particularly true for accountants who may have been slow to embrace advances in technology but have now come to realize the enormous benefits of technology created specifically for accountants and accounting firms.

What is accounting technology? 

Accounting technology is the transformation of previously paper-driven processes and systems into streamlined accounting workflow solutions that are accessible 24/7 via cloud-based software. In the not-so-distant past, accountants spent a good portion of their day entering trial balance data into engagement software or formatting financial statements.

Today, technology has impacted accounting firms in a positive way. Firms are using accounting technology and cloud-based platforms for automation sophisticated diagnostics, and predictive analysis to better serve clients and utilize their knowledge more effectively.

What are the benefits of accounting technology?

For accounting firms, accounting technology provides a foundation for success in today’s ever-changing tax landscape. While some may have wondered, “Will accounting be automated?”, forward-thinking firms have been proactively putting automation to work for themselves.

With the right accounting technology in place, accountants can automate manual activities, saving them precious time and money while also improving accuracy, enabling collaboration and work/life balance and boosting staff and client engagement levels.

Let’s review the specific benefits of accounting technology:

Elimination of manual data entry

With accounting technology automation and sophisticated diagnostics, accountants no longer have to manually enter information, detect blank fields, or search for numbers that don’t add up. Accounting technology enables accountants to link returns using a tax ID number, so the same changes don’t have to be made across multiple documents. By comparing a tax return with last year’s documents, accounting technology can catch errors before it’s too late to fix them. This decreases both the margin of error and the time needed to review returns for accuracy.

Tax workflow automation

From data collection to preparation to review and final delivery, a customized, cloud-based, end-to-end accounting technology solution allows for advanced data sharing and paperless processing. With a seamless tax workflow process from start to finish, accountants benefit from automating key processes, reducing the hours spent on non-billable work, and creating efficiencies that free up staff for more meaningful work.

Real-time collaboration

Accounting technology offers accountants the ability to share data and documents with clients and staff in real time. By enabling remote work and online collaboration with clients, accountants can save time, enhance the client experience, and boost staff engagement.

A shift to value-added work

With today’s accounting technology in place, accountants can shift their focus from tedious tasks to more value-added work. This creates an opportunity capitalize on knowledge and expertise to build more meaningful relationships with clients and create a more sustainable, year-round business model that goes beyond tax season.

Surfacing valuable insights

Accounting technology helps accountants analyze data, surface valuable insights, stay current on the latest tax laws, and proactively provide guidance and support to clients. In today’s complex tax landscape, accounting technology is a catalyst to making informed decisions and sustaining growth.

What types of accounting technology do accountants use?

In recent years, trends in advanced technology have transformed the ways in which accountants work. By automating workflow processes with connected accounting technology, the challenges of paper-based processes and tedious manual work are a thing of the past.

With accounting technology that incorporates the loud and APIs, today’s accountants can collaborate with clients and staff in real time and solve disconnected workflow issues. In turn, they can focus their time on analyzing data, advising clients, and uncovering new opportunities to grow their business.

What is cloud-based accounting technology?

To capitalize on faster innovation, more flexible resources, and economies of scale, forward-thinking accountants are taking full advantage of cloud-based accounting technology.

Cloud-based accounting technology is a form of cloud computing in which networks, data storage, applications, security and development tools are all enabled via the Internet (i.e., the cloud). Instead of spending money on databases, software, and hardware, accounting firms gain anytime, anywhere access to their accounting technology and workflow solutions.

How does cloud-based accounting technology work?

Cloud-based accounting technology enables accountants to work securely with clients in real time and empowers staff to collaborate from anywhere.
With write-up, trial balance, payroll, financial statement analysis and more on a single platform, comprehensive cloud-based accounting technology offers a path to significantly increased productivity and an enhanced client experience.

In essence, cloud-based accounting technology makes it easy for accountants to maintain their day-to-day accounting activities while providing real-time access to critical data for proactive client engagement and guidance.

Is cloud-based accounting technology secure?

Yes. By choosing an established accounting technology provider, accountants can ensure their data (and their client’s data) is protected with multiple layers of security, including network-level security, virus protection, encryption schemes, and more.

What are APIs?

Application Programming Interfaces (APIs) are software code that allow two unrelated systems to access and use each other’s features or data. Essentially, an API acts as a facilitator that enables two different and separate applications to talk to each other.

How do APIs work in accounting technology?

In accounting firms, APIs can increase efficiency and reduce redundancy by enabling disparate systems to work together to compare data sets. This helps accountants automate numerous manual functions and save a significant amount of time.

The ways in which an accounting firm uses APIs depends on their workflow. APIs can reduce redundancy in workflow processes and facilitate automation.

What are the benefits of APIs in accounting technology?

In general, APIs enable accountants to:

  • Automate key processes and reduce hours spent on non-billable work
  • Avoid entering data manually to reduce the risk of errors
  • Increase visibility of client needs with connected solutions
  • Connect otherwise disconnected third-party systems
  • Gain insights for analysis and decision support

In addition, APIs can support succession planning and business continuity because the resulting automation is not reliant on the knowledge of a single person. 

How do I find accounting technology? 

Look for an established accounting technology provider that offers solutions designed specifically for accounting firms. Whether it’s audit, tax, payroll, firm management, marketing, or staff training, accounting technology can help you unleash your firm’s full potential. 

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