How Did The Pandemic Accelerate The Future Of Global Automated Accounting
Nearly 8.5% CAGR growth is expected in the accounting software market between 2021-2026, reaching $19.59bn. Moreover, software enhancement has enabled accounting industry automation to make it really big and prominent. When covid-19 rained its wrath on humanity, the world was forced to leave their office space, retreat into their homes, and set up their workspace. Even though the accounting process was in its evolution stage, the latest technologies and escalated business dependency on it accelerated this evolution, setting it on a path to the digital finance revolution.
The routine online accounting services were not good enough because being digital but redundant is not the solution to cope with the post-COVID accounting scenarios. Using the right digital tools that allow the modern solution to accounting problems will help the global accounting system to emerge more resilient than ever.
During the pandemic, the organizations have already realized that a catastrophe will breed substantial innovation. Every department established brainstorming ideas during the lockdown. These concepts were the basic need to propel a business and move forward into a future where things would be better than before. Bookkeeping and accounting services were not an exception. Way ahead, everyone needs to infuse the best practices like amalgamation from previous work experiences related to pre and post-COVID scenarios in the accounting processes.
Let us delve into various factors that influenced the emergence of the global automated accounting era post-COVID.
Why Is There a Need for Digital Accounting Services Post-COVID?
The pandemic affected businesses in unimaginable fatalistic ways causing them to ensure working in a way without room for incompetence, as it was the only way to survive the pandemic conditions. Along with several changes, managing cash flow and finance within the organization became one of the most crucial jobs.
Undoubtedly, effectual financial solutions are crucial for any business to run smoothly, but the economic uncertainty during and post-COVID has made it substantial for all to implement advanced financial tools.
Businesses still using the manual way to process accounts grapple with confined visibility and control of their cash flow, unrecorded liabilities, and invoices. Together these block the unpredictable cash flow and payments. Organizations have been having issues with Accounts Payable departments because manual data entry and manual accounts processing create havoc. Inefficient processes cause a major setback to the company's invoice processing workflow.
Hence, focusing on the digitalization of accounts, which should have been a primary focus in digital transformation, became even more crucial in the pandemic. As businesses welcomed digitalization during the pandemic, they began re-assessing their processes to rationalize financial operations even post-COVID.
A streamlined and transparent accounting workflow is significant to any company’s financial management, particularly their Accounts Payable processes. Many departments, such as treasury, sales, procurement, etc., depend on accurate information from the accounts to manage cash flow, monthly bookkeeping, spending, and more. Any discrepancies or inadequacies in the accounting will affect the efficacy of a business as a whole.
Some Effective Accounting Tools Used By Businesses to Improve their Efficiency Post-COVID:
1. Optical Character Recognition/Reader (OCR) Accounting
The OCR technology automatically extracts accounting or financial data from physical documents. The tool uses a scanner to read the handwritten text to the system (machine) readable text format. Implementing this technology in the accounting system allows the recognition and extraction of characters, data, text, numbers, and fields from the images or documents that get scanned using this technology. Generally, documents often contain data in standardized formats, thereby reducing the processing of every document in OCR accounting.
Besides extracting line items from the related purchase orders, receipts and invoices, OCR software can also convert PDF documents, say bank statements, to excel for easy downstream processing. It helps in evading all manual effort that gets consumed in extracting data from the financial documents. OCR software allows seamless connection with accounting to create a fully digital financial workflow.
OCR software automates applications in accounting, allowing an accountant expert or financial analyst to analyze the business performance more technically and contributing valuable financial information about the business to make knowledgeable decisions.
2. Document Management System
The accounting system of any business relies on documents. Some of the key documents they heavily depend on include:
- Capital-asset activity
- Financial statements
- Receipts
- Tax documents
- Transaction histories
- Credit and loans
- Audit reports
There are a lot of daily transactions besides these that need to be secured. The chances of human error increase in remote working. Managing so many physical documents can be tedious as an ocean of documents needs to be sorted and maintained.
Document Management System software allows businesses to bring their paperwork into one data system with variable access to required personnel. Digital workflow allows work efficiency, is cost-effective, offers security, and easy document tracking, and is sustainable.
Document Management Systems are here to stay. It doesn't just offer modernization and business continuity but is sustainable for the company. A report revealed that the market for Document Management Systems, which was $5.5 billion in 2020, is projected to grow more than 13% over the forecast period between 2021 and 2027.
3. Automated Accounting Workflows
Accounting automation can help establish automated processes that can transform how a company works. Automated accounting allows accountants to do more than just data entry like following up with suppliers, taking care of audits, etc. Their jobs become less repetitive and more specialized. Automated accounting market analysts are predicting massive growth in enterprise spending to digitalize accounts.
Accounting automation uses technology or advanced software to create a series of tasks known as workflows and uses technology to execute these predefined steps. This allows accounting to happen without any manual steps. 70% of businesses experienced stronger ROI when they added automation to their accounting system. Automated invoicing takes care of invoicing, data entry, recognition and codification, approval processes, and every element included in the accounting.
Major Key Players
The accounting software market is a moderated consolidation. The key players share a larger space in the landscape of automation accounting. The existing players are happy with their client base and do not need to switch to new players. The new players, therefore, fail to sustain themselves in the market for a long time. Some major key players include Microsoft Corporation, Oracle Corporation, Sage Software Inc., Intuit Inc., Infor Inc., SAP SE, Xero Ltd, Epicor Software, and others.
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The pandemic taught us that change in life is inevitable! As businesses venture into the future, the changes they look forward to adapting to these changes they embraced during the pandemic. AI-human (Artificial Intelligence) collaboration with digital transformation will define the work environment. The pandemic has already revealed that digital maturity is the key to business continuity and growth during times of predicament. AI has allowed businesses to imagine a hybrid or fluid workplace. Automation of accounting enables employees to enjoy the best of both – a job and working-from-home opportunity.
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