How Fintech Transformation Will Impact Accountants

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Guest Post | Aug 5, 2022

How fintech will transform will impact accountants - How Fintech Transformation Will Impact Accountants

Emerging technologies touch nearly every aspect of the business world, and that includes the accounting department.

Financial technology — or fintech for short — is any technology that supports, automates, or enables a company’s or individual’s use of financial services.

In the accounting department, fintech helps accountants do their jobs more efficiently. But fintech can also free up accountants’ time so they can focus on meeting the strategic needs of the business. Rather than simply supporting other departments, accountants can be the changemakers themselves.

Financial Technologies for Accountants

Before we delve into how fintech can add value, let’s talk about a few specific technologies that have transformed how accountants do their jobs.

Automation

Automation technology has been around for some time. When you think about the most popular automation programs on the market today (Excel, Quickbooks, TurboTax, etc.), it’s likely that nearly every business across the globe uses some form of automation technology in their accounting department.

But there are newer computer programs that take automation one step further. For example, computer technology can now automatically perform month-end close tasks like reconciliations, payroll, and financial reports. Additionally, software like Expensify and Dext use Optical Character Recognition (OCR) to gather data from a PDF or a photo.

Robotic Process Automation

Robotic process automation (RPA) is a technology that mimics human keystrokes on a computer. This technology operates by programming the computer to follow a set of rules: If X happens, the computer will take Y action.

In accounting, RPA can:

Organize new listings within a chart of accounts
Perform bookkeeping functions (like approving an invoice for payment)
Reconcile accounts
Prepare financial statements (like building a report for the auditors each quarter)
Forecast future performance—

—and so much more.

Intelligent Automation

Intelligent automation (IA), like RPA, mimics human keystrokes on a computer, but it can do so without following strict “if X, then Y” rules. IA uses artificial intelligence-enabled programming to, for example, read a client email and take an action based on what it sees, or automatically authorize an order by checking the work order against progress reports, accounts receivable, and inventory.

Blockchain

Blockchain technology relies on the premise that all human- or computer-initiated transactions are stored in the blockchain indefinitely. Future users can see what transactions prior users executed, which makes blockchain a secure and transparent way to transact business. Blockchain can:

Help prevent fraud.

Because all transactions are recorded in the blockchain, there is a simple way to spot asset misappropriation.

Update multiple users in real-time.

Because the blockchain is decentralized, more than one user can access it at once. In real-time, auditors can gather information about the business without disrupting the day-to-day activity of the accounting department.

Securely transfer asset rights.

Blockchain introduces a truly secure way to transfer property rights between businesses or affiliates.

How Fintech Helps Accountants

New technology takes time and effort to adopt (and even more time to learn how to use to its full potential), but once you do, your department will see just some of the following benefits:

Improved Efficiency

If your staff are more efficient at their jobs, they can spend their time on more important things. Instead of entering data or checking another person’s work for accuracy, they can focus on strategic tasks that cannot be accomplished by a computer program — things like collaboration with other departments, finding creative solutions to long-held inefficiencies, and interpreting information that helps the C-suite make better decisions.

Reduced Risk

When businesses base their decisions on current and accurate data, they reduce their risk of making an unsound investment or decision. Additionally, fintech programs can reduce the risk of fraud. They can trace transactions more quickly, and if fraud is discovered, it can be contained quickly.

Improved Accuracy

Humans provide value to businesses — there’s no doubt about that — but their value does not come from their ability to tick and tie numbers. Computers can perform simple arithmetic and complex calculations, and they can do much better than a human ever could. Businesses that use fintech to their advantage will make fewer errors and have more accurate reports.

Reduced Costs

Fintech’s automation capabilities reduce time needed to complete tasks, and when time equals money, the cost savings add up quickly. Fintech for payment services can also save the company money by optimizing when payments are made and how quickly checks are deposited. When payments move faster, the business has access to cash sooner and can use that cash as leverage in new strategic pursuits.

See: CPAs and the New Social Contract: The Rise of the Warrior Accountant

Fintech can be as complex or as simple as your company needs it to be. Start small, understand your technology, and move from there. Even adopting simple automation programs can greatly impact your department’s work and your employees’ experiences while on the job, so do your research and see how fintech can help you.

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