Over the years, the profession of accounting has undergone considerable change as a result of technological advancements and digitalisation. Computerised and even automated accounting has replaced manual work with paper documents and accounting records, with artificial intelligence playing an important role. We asked Ilze Palmbaha, a board member of the Association of Accountants, to tell us how technology has changed traditional accounting.
In your opinion, what is the role of an accountant in a company today?
In the digital age, the work of the accountant has become increasingly automated, and I keep saying that accounting has become smarter as a result. Due to this, accountants are able to avoid time-consuming and routine tasks such as data entry and verification. The use of cloud technologies and SaaS (Software as a Service) solutions has simplified activities such as procurement, customer accounts, invoicing, and tax management. Whereas the adoption of artificial intelligence (AI) and robotics has led to the automation of more complex and repetitive tasks and processes, reducing costs and increasing productivity. Furthermore, artificial intelligence software has improved accuracy and reduced the likelihood of errors.
Cloud-based accounting application software, on the other hand, provides accountants with secure access to their data from any device, at any time. With the help of such software, one can easily track cash flow, digitise invoices and receipts, send quotes, and keep track of sales and expenses. There are many applications that offer full accounting solutions that allow you to track data in real time, prepare invoices in an automated manner, reconcile bank statements, and perform many other accounting and business process functions.
Today, accountants play a much broader role in companies than in the past. Their tasks have evolved beyond entering data, checking numbers, and preparing reports. Instead, accountants act as the company’s financial information managers, helping management make informed decisions based on financial data. These technological advances have given rise to a new role for accountants – that of business consultants.
When it comes to business development, there is often talk of digitalisation and automation. How does this affect the daily activities of an accountant?
Technology and cloud services are being used in accounting to simplify and automate many of the day-to-day activities of accountants. As a result of technologies such as cloud computing, artificial intelligence, automation, and blockchain, accounting has undergone a significant change.
Cloud-based solutions, for example, allow more flexibility, cost efficiency and a simplified IT infrastructure for accountants. This is particularly useful for smaller businesses, as they can access global solutions that were previously unavailable. For example, the world-renowned giants of resource management systems are now available to small and medium-sized businesses on a subscription basis instead of installing software.
The use of artificial intelligence and robotics has made it possible to automate complex processes, resulting in lower operating costs and greater efficiency. For example, new tax software solutions are being used to reduce errors and improve accuracy. Conversely, blockchain technology allows databases to be maintained in a standardised manner so that transactions can be entered simultaneously into a common ledger, reducing the possibility of human error and fraud.
By converting physical documents into digital formats using optical character recognition (OCR) technologies, automation has reduced paperwork. Artificial intelligence and machine learning techniques are used to interpret the collected data and create more valuable data from it. This will soon be a thing of the past, as e-invoicing will be mandatory from 2025, which means that, simply put, data will be passed from system to system. In fact, accountants will work with data and no longer with pictures and paper invoices.
The following are some examples of SEB Banka’s digital solutions:
- Through SEB's Internet banking and mobile applications, accountants can conduct various financial transactions and manage accounts electronically, e.g., make payments, check accounts, track payments, etc. Through these digital solutions, financial transactions can be managed efficiently and effectively, reducing the time spent on processing paper documents.
- In addition to providing e-services, SEB supports data integration with accounting software. For example, the fast and secure exchange of financial data with the bank via Baltic Gateway enables accountants to easily and efficiently integrate bank data into the accounting system, automate data exchange and update financial information simultaneously. This considerably reduces manual data entry and risk of errors and enables real-time accounting, which is beneficial for companies in terms of decision-making and cash flow.
- SEB Banka offers the possibility to receive invoices electronically. This simplifies invoice processing and reduces the need to use paper invoices or process them in PDF format upon receipt. Electronic invoice payments are also convenient as the payment amount and other payment details are already set and you only need to confirm the payment. Further, you can configure automatic payments to ensure that your electronic invoices are paid automatically, accurately and on time.
What do you think of a contemporary accountant, and how will this profession evolve in the future?
As a result of technological advances, many of the traditional tasks of accountants are now automated and streamlined. This has changed the role of accountants because, in addition to their primary role, accountants now act as business consultants, providing planning services and specialised solutions such as technology tool integration services.
As technology advances, the role of accountants will continue to evolve, and the pace of technological development will accelerate as artificial intelligence, such as Chat GPT-4, enters our daily lives. To remain competitive in the labour market, accountants must embrace these technologies. The latest World Economic Forum study on future labour market trends was recently presented in Riga. This study shows how and to what extent various elements, such as artificial intelligence, could influence the development of the labour market in the next five years. Likewise, Latvia can expect some existing jobs to be replaced by new occupations influenced by artificial intelligence.
According to the study, technological progress will also have a significant impact on the fields of accounting and auditing. The growth of artificial intelligence and automation has led to the automation of many traditional accounting functions such as financial accounting, tax return preparation and auditing. As a result, routine work that does not require high skills will be less in demand. In the future, accountants will need to use their expertise and skills to analyse complex financial data and provide appropriate suggestions and advice to help companies make strategic decisions.
To adapt to these technological changes, accountants must increasingly develop new skills and be willing to learn how to optimise accounting software and cloud-based application software.
What are the biggest challenges facing accountants today?
A number of challenges exist.
Cybersecurity
Accountants are responsible for ensuring the protection of the company’s financial data. A cyber-attack, data leak, or other cyber security issues can pose a significant threat to the security of financial data. The accountant should be aware of these risks and take appropriate measures to prevent any attacks and protect financial data.
Financial fraud
Accountants are an essential part of a company's internal control system, and we need to be aware that fraudsters are always looking for new ways to manipulate financial data. Accountants must be vigilant and trained to detect and prevent financial fraud.
Legislative changes
The legal framework and requirements for the financial sector are constantly changing and evolving. To comply with mandatory regulations, accountants must be well-informed about new developments. This may include preparing adequate financial statements, complying with tax regulations and keeping adequate records.
Technological progress and digital transformation
Advances in technology and digital transformation are changing the way accounting has been done so far. To remain efficient and competitive, accountants must be prepared to adapt to new technologies and digital solutions. This means that they must master new accounting software, automation, and analysis tools.
Increase in the scope of activity
Expanding the scope of a company’s activities can place an additional burden on accountants. The increased workload and complexity of financial transactions and data processing can lead to increased work pressure and the need to organise work processes and resources more efficiently.
The above challenges require continuous training and adaptation to the new requirements so that accountants can successfully fulfil their role and ensure the integrity and trustworthiness of financial data.
