What does that look like in practice?

• Automated routine tasks. Mundane work like manual data entry, client reminders, and email drafts can now be performed automatically using workflow automation tools (or robotic process automation, also known as ‘RPA’), redirecting manual effort to more important tasks, like client relationship-building and service delivery.

• Automated accounting tasks. This includes accounting-specific tasks ripe for automation, like accounts payable and receivable, payroll accounting tasks, and tax preparation tasks.

• Automatic real-time reporting. Financial information can be tracked and updated for reporting in real-time, helping you make more informed decisions, faster.

• Cost savings. Automation solutions require an initial investment, but more often than not, it leads to big returns. Reduced manual labor, decreased error rates, and improved efficiency all translate into lower operational costs across the board.

• Scalability. Automated accounting systems can easily adapt to the changing needs of small businesses. Whether a company is small or large, automation can scale to handle increasing volumes of financial transactions and data.

Recommended reading: How to start automating your workflows with accounting automation

2. Cloud computing expands accounting firms’ reach and collaboration capabilities

In 2025, business is digital. It’s happening through remote workers, mobile devices, and global interactions. And cloud computing is powering it all.

Cloud adoption continues to rise, with 90% of firms using cloud accounting technology today.

In fact, most people use the cloud every day without a second thought. Gmail, Microsoft 365, Slack, and social media platforms like LinkedIn are all examples of cloud-based tools that keep accounting professionals connected, even when they’re miles apart.

3. APIs enable collaboration between systems and teams

Think of an API as the connective tissue between different software applications. With an open API, firms can customize and automate accounting workflows to fit new tools into your existing tech stack to create one united ecosystem.

For example, with an API key, you can integrate your practice management software with your General Ledger tool, enabling real-time updates on future projects without losing your historical data.

It’s slightly technical. But most software systems have step-by-step documentation for how to help you build a unique integration with API in minutes. For example, here’s how you can build a custom API with Karbon.

4. Data analytics inform decisions and improve strategy

Data is the new currency of business. The big data market is expected to reach $100 billion USD by 2027, more than double its expected market size in 2018.

Big data refers to the incredible amount of structured and unstructured information that humans and machines generate each day.

It’s social posts, videos, sensor information from machinery, web logs, credit card transactions, PDFs, forums, call center recordings, contracts, receipts, invoices…the list is never ending.

And according to the latest research, it has “the transformative potential to revolutionize accounting practices,” especially when it comes to decision-making.

So how are leading accounting firms harnessing data analytics today?

• Gaining customer insights: Data is personalizing solutions by providing insights into client behavior, preferences, and needs.

• Predictive analytics: Data can help inform predictions about future trends, cash flow, and financial performance.

• Real-time reporting: Firms are using it to uncover real-time financial insights that can guide immediate decisions.

• Fraud detection: Utilizing diverse data points like transactions, employee actions, and external cues, data reveals patterns that can uncover fraud.

5. Workflow automation cuts down routine manual accounting work

Remember that statistic that says 77% of all accounting activities can now be fully automated?

Well, the irony is that over 75% of accountants report that their processes still require a considerable amount of manual effort. What does that mean for you?

Adopting the right automation technology to streamline your day-to-day work and eliminate time-consuming tasks could put you light years ahead of the competition.

Here are some ways you can get started:

• Automate your workflows. Automate manual and repetitive tasks such as data collection, client requests and reminders, and recurring or standardized tasks. This workflow automation should be available in your practice management system.

• Try tasklist automators. Think of these as customizable ‘triggers’ in your practice management tool that automatically update task statuses based on a series of conditions that you set. In Karbon, these are already set up in hundreds of work templates that you can use today.

• Build app integrations. Using ‘no- and low-code’ tools like Zapier, you can automate the parts of your workflow that rely on several apps, customizing your own, integrated system.  Here are 10 Zapier automations to consider.

• Leverage AI. 85% of accounting professionals are optimistic about AI, and for good reason. Top use cases of AI in accounting include streamlining communication, automatically generating action items from meeting transcripts, research activities, marketing content generation, and financial forecasting and analysis.

6. Artificial intelligence is here to stay

While around 28% of accounting professionals are concerned about AI's threat to job security, that number is decreasing. As time goes on, people are witnessing how AI can make their jobs easier, not redundant, and many are questioning whether accounting jobs are truly safe from tools like ChatGPT and AI.

Accounting professionals are already exploring AI in key ways:

• Finding deep, real-time data about their clients

• Identifying financial patterns, trends, and anomalies in a fraction of the time

• Harvesting data to inform strategy and forecasting

• Summarizing large volumes of content and financial reports to uncover actionable insights

• Transcribing phone calls and rendering minutes for meetings

Use tools like ChatGPT to get started with AI in accounting, or find practice management software with AI functionality built in, and continue learning from there.

The future of accounting technology

As accounting technology continues to evolve, it will continue to help accounting professionals deliver high quality services in increasingly optimized ways, without losing their human touch.

The greatest advantage so far is the timesaving capabilities.

In October 2024 alone, ChatGPT saw 3.7 billion monthly visits, with 85% of accounting professionals excited about AI’s ability to increase speed and efficiency.

And firms using Karbon as their practice management software are saving 19.9 hours per week, per employee. As technology takes the brunt of routine tasks and data processing, accounting professionals are liberated to step into more advisory roles, offering a deeper level of personalization and involvement for clients.

And for some firm leaders, the time savings simply result in greater work-life balance, improved mental health, and more time for hobbies and interests.

Remember: ChatGPT (and AI) is not a silver bullet

As powerful as ChatGPT and artificial intelligence are, it’s important to keep in mind that they aren’t a one-size-fits-all solution. And they aren’t without their limitations.

For example, generative AI tools are only as good as the data they’re trained on. Biases in data, along with potential gaps or inaccuracies, can propagate into the AI's responses, leading to poor conclusions or advice. And they lack the human expertise needed to decide what’s incorrect and irrelevant.

There are a number of very human things that generative AI technology can’t do, like:

• Adjust to unseen or uncertain situations

• Empathize, relate to, and build relationships with clients

• Manage worried clients

• Replace human judgment, experience, and creativity

• Always give accurate and tailored advice

• Understanding contextual nuance

• Quality control and fact-check outputs

• Defend against cyber security concerns

• Operate without quality assurance.

AI isn’t the real competition. The firms that are using it to get ahead are.

How secure is accounting technology?

With 80% being concerned about data security in relation to AI, it’s safe to say that data protection is a pressing issue.

Accounting technology, not just AI, should have extremely high encryption standards to protect sensitive data both in transit and at rest. This means that even if data is intercepted, it remains unreadable without the proper decryption key.

Robust user authentication and access controls are also signs of a secure accounting tool. That way, you can manage who has access to sensitive information, as well as their permissions to view, edit, or export it.

Here are some important due diligence questions for your accounting technology:

• Is it SOC compliant? This means that the software has undergone rigorous third-party audits for security.

• Does it comply with GDPR regulations? This means the software protects user privacy and rights with its data.

• Is there multi-factor authentication (MFA)? This gives you multiple forms of verification to access accounts, adding an extra layer of security.

• Does the software provider offer robust customer support? If you ever encounter any security threats or issues, you need to know they have your back.

• Do they have a history of data breaches? Check customer reviews and outage reports for past issues. This could be a red flag to explore other options, especially if they’re recent.

Most of the answers to these questions should be clearly laid out on a product’s website.

It’s important to remember that humans are the weakest link in cybersecurity. The World Economic Forum found that 95% of all cybersecurity issues can be traced to human error. So robust cybersecurity training for your team is crucial alongside your secure tech stack.

Add practice intelligence to your accounting stack

The future of accounting is about more than practice management, it’s about practice intelligence. Smarter, AI-first solutions that not only capture data, but leverage it to the user’s advantage.

Accounting practice management solutions like Karbon are built to do exactly that, offering:

• Workflow automation to standardize recurring work, powered with Karbon AI.

• Collaboration and connectivity tools to help you build and manage the right chain of communication across cloud-based teams.

• Email management to ensure all communication between staff and clients is recorded in a single place.

• Business analytics with easy-read reports to help you optimize workflows, capacity, resource planning, and more.

As a comprehensive practice management tool, Karbon ensures enterprise-grade security for all of its features, including:

• SOC 2 Type 2 certification

• An Information Security Management System (ISMS) compliant with ISO 27001

• Data and regular data backups that are encrypted at rest with AES-256 bit encryption to protect your data confidentiality during storage

• A client portal with secure Transport Layer Security protocol to encrypt all data transmissions

• The Azure OpenAI Service, which powers Karbon AI, provides critical enterprise security and compliance

To learn more about the ROI of accounting practice management software, or how Karbon prioritizes security, book a demo today.

Accounting technology is any digital tool that improves and automates your accounting processes and increases efficiency and accuracy (think cloud computing, machine learning, AI, blockchain, etc.).