How COVID-19 changed technology in accounting (and what the future looks like)

COVID-19 changed the working habits of accountants around the world. And at the core of this was technology.

Technology was the reason many businesses and industries were able to continue operating remotely, even when there was little to no warning of the transition.

For accounting firms, the best technology decisions were made around:

  • The need to collaborate remotely

  • Visibility across work and tasks

  • Integration across multiple systems

  • Communication internally and with clients

While some work habits may return to a pre-COVID state, technology adoption has and will continue to permanently reshape the accounting industry.

Here are some of the pandemic-induced changes, including the good parts, the bad parts, the ugly ones and what to expect for the future.

Increased need for cloud migration 

The cloud was already popular before the rise of remote work. But it reached new heights in 2020, and continues to soar.

Cloud adoption has provided accounting firms with solutions that enable communication across remote teams, plus convenient and secure data management.

The good

Firms are reaping the benefits of more cost-effective scalability compared to on-premise systems that require tedious server overhauls. 

On top of that, the cloud offers improved data back-up with remote servers that prevent the risks of physical damage to hardware and irreversible damage to data.

The bad

Cybersecurity remains a pressing challenge, especially with the cloud and its numerous contact points. 

And some companies may have rushed through their cloud migration without proper training for protocols and procedures, leaving their networks vulnerable (i.e. weak passwords, escalation of privileges, etc.). 

The ugly 

The difference between cloud-native and cloud-enabled solutions (otherwise known as fake-cloud) may still be new to some firms.

Confusing one for the other will result in a backward step disguised as a forward step.

Cloud-native: designed for the cloud from the beginning
Provides the foundation for the perks often attributed to the cloud, such as omnichannel strategies, elastic scaling, and fuss-free integration.

Cloud-enabled: a desktop tool with cloud adaptation as an afterthought
Relates to little more than a slight upgrade to traditional on-premise data systems so they may function and keep up with cloud capabilities.

What to expect in the future?

Accounting in the future will see an increase in routine cyber-hygiene courses—awareness of the latest cybersecurity risks and best practices are crucial, particularly for a remote workforce. 

Remote leadership training may also become more prevalent, as firm owners and partners look beyond physical location as a barrier to hiring.

Accountant toolkits redefined

Firms are looking to hire accountants with a new set of skills.

Early-career accountants who are familiar with data analytics are more likely to appear ‘prepared for technology’. For some firms, these types of attributes are must-haves, particularly as they look at becoming digital-first practices.

The good

Smart technology, such as Artificial Intelligence and Machine Learning, provides accountants with the consistent support they need to generate data-backed results with reduced time and error risks.

The bad

The accounting industry may face a significant skills gap among professionals, especially between digital natives and seasoned workers with less digital exposure. 

The ugly

Some firms may decide to skip digital training sessions that are designed to fill holes in their firm’s digital literacy. The risk here is an ineffective digital transformation.

What to expect? 

Modern accounting professionals need to extend their skill sets beyond spreadsheet management and value computations.  

The focus will shift to utilizing tools that will help their firms optimize workflows and increase workload visibility to increase their bottom line. 

Increased demand for integrated accounting platforms 

With firms working remotely like never before, it’s now the most important time to assess your firm’s tech stack. Integration is key here.

The good

Teams benefit from streamlined data, being completely connected despite working remotely, and harnessing the efficiency gains associated with automating tasks.

The bad

Some firms may onboard new and integrated systems without knowing how to fully capitalize on their integration.

Successful firms are those that understand how the integrations serve to benefit each other, and ultimately, the teams that use them.

The ugly

Setting your sights on a particular tool simply because it integrates with another system your firm uses may result in high costs and ineffectively used tech.

Taking the time to objectively select the right technology will help mitigate tunnel vision.

What to expect?

Leadership teams will understand the importance of technology adoption throughout their teams.

There is little point in optimizing your tech stack into an integrated machine, if your team isn’t empowered to use the tools correctly.

Information and onboarding sessions, consultation processed and clear communication will help get buy-in from your teams.

Onward to the new accounting normal

The pandemic has accelerated the shift in accounting from reactive technology to proactive, smart solutions.

Like everything, there are good and bad aspects—those that will help, and those that can hinder accounting firms if care isn’t taken.

The good news is that it’s not too late to optimize your firm’s tech stack and digital capabilities.

It’s better to get started sooner rather than later though, because with technology, the next new normal has arrived.