How technology is reshaping accounting
Technology / Jul 6th, 2017 11:13 pm     A+ | a-

Over the past decade, digital technologies have disrupted nearly every industry.

Kenyans have not been left behind by these advances and research shows that they are increasingly switching to online shops, are more likely to pay via mobile transfer services than use hard cash, and are increasingly quitting use of traditional taxis for online-based options.

One of the sectors facing dramatic shift thanks to technology is accounting. The profession has witnessed the advent of a host of accounting softwares that have automated basic tasks.

These developments have set the industry squarely on the path of digital disruption that has hit traditional industries such as transport, media, publishing and other industries.

Yet accounting firms may not necessarily be ready for the huge transformation, according to some analysts.

Already Kenyan businesses are deploying in droves business management solutions which conduct basic accounting procedures like HR and payroll.

This allows business owners to remotely work on their invoices and tax returns and assess their business performance in the office or at home without the services of professional accountants.

Accounting firms are also promising to deliver superior innovations that free up entrepreneurs from the rigours of hiring extra personnel to run their businesses.

“Business builders and entrepreneurs don’t go into business because they want to wrestle with red-tape and manage admin. Our vision is to make those tasks invisible by 2020 by automating the back-office functions so we can free business builders up to follow their dreams,” says UK-based accounting software giant Sage chief executive officer, Stephen Kelly, highlighting the new innovations that are radically changing the running of businesses and threatening the traditional roles of accountants.

To be sure, according to some players, accounting seems remarkably poised for a similar disruption that has been witnessed in the transport business with the popularity of online-based taxi hailing services.

Small businesses

But how is the world of new innovations in accounting and the day-to-day running of operations for businesses look like?

“Small businesses will have more time and less concern and ultimately that gives them freedom to do other things,” says Nick Goode, Executive Vice President, Product Management at Sage.

“Accountants will be there, there is no question about that. It is just that they will not be doing the same low level things they are doing today because they will be automated,” he projects.

The changing business landscape is being fuelled by businesses increasingly preferring to digitise their operations as a way of slashing costs at a time margins are shrinking.

While the end for accountants and book keepers may not actually be near, their functions are being turned upside down. The accountants who talked to Smart Company painted an optimistic picture.

“Automation is important even for accountants. It will make life easier and even their services better. Accounting services go beyond accounting and auditing services,” says Fernandes Barasa, chairman of the Institute of Certified Public Accountants of Kenya (ICPAK), which is the body mandated to regulate accountants in the country.

“For me and for the institute my honest opinion is it will improve the accounting services because everything is digitised.”

Mr Barasa says most of these new IT innovations will still require people to function and would therefore never actively displace the work of traditional professional accountants.

“It is not an issue of making accountants irrelevant. Accounting services improve because of those accounting softwares. Our services improve on quality, time and the enhancement of efficiency of our work,” says Mr Barasa (below). “There is no fear at all.”

Mere tools

His optimism is echoed by University of Nairobi lecturer Bitange Ndemo who sees business management solutions as merely tools which aid the traditional roles of professional accountants.

“Those are tools. (When they are adopted) accountants would go more into analytics (and not be declared redundant). Even in the medical world, a lot of computing is there, but it will never replace a doctor,” says Ndemo, a former ICT permanent secretary .

Mr Ndemo adds that the era of invisible administrators may take a while to be fully adopted.

Sage’s Nick Goode concurs arguing accountants will remain a critical cog in the digital transition even though, he adds the accounting community may not be ready for the shift.

Experts say among the advantages of automation is that they provide especially small businesses with additional time to concentrate on their core business activities.

“Accountants will do higher value things…we will start to see the disappearance of receipts and paper within a year or two years,” says Mr Goode.

“The basics of it will come more quickly…the longer term, where more tasks are automated, that will be three, four, five years in the making.”

But where do accountants go from here? Mr Goode says accountants will in the near future be required to take up higher roles. Such roles include offering advisory, financial planning, analysis and strategy services to businesses.

“It means accountants will not spend time doing the low level tasks. Why would you want to be running payroll for people when you could be doing financial planning optimisation.

No comments posted...
Leave a Comment
* Enter verification code
Very catpcha image
* - Required fields
Older Post Home Newer Post