How technology is transforming the accountancy sector

Leaps in technological advancements such as Artificial Intelligence, Cloud Accounting and Data Science are dramatically reshaping the accountancy industry, and the adoption of such technologies can prove very advantageous for consumers and businesses alike.

Now more than ever, the accountancy sector has a responsibility to not only keep up with these developments, but also to stay one step ahead to maintain its global leadership position.

Services – including accounting, insurance, and law – account for almost 80% of the UK economy, and financial and professional services alone are worth £190 billion and employ 2.2 million people, so it is vital that we ensure these are primed for the future.

The accountancy sector not only contributes directly to the economy, but it underpins all other business activity by supporting the management of risk.

UK Research and Innovation (UKRI), the national funding agency investing in science and research in the UK, has allocated £20 million of funding to projects exploring how new technologies could transform the UK accountancy, insurance and legal services industries.

The Next Generation Services challenge, as it has been named, aims to advance technologies such as artificial intelligence and data analytics that can help the sector to become more efficient, productive and globally competitive.

Through this challenge, government is supporting industry and researchers to develop technology and services that can transform the UK’s services industry.

There are a number of key technological trends and obstacles within the accountancy sector that are having a huge impact on pricings, operational efficiencies and customer experience.

Artificial Intelligence, Machine Learning and Robotics are automating complex and repetitive tasks and processes in the accountancy sector, with extreme accuracy. According to researchers at Sage, 58% of accountancy professionals are expecting to automate tasks using AI solutions within the next three years.

By streamlining data analysis, mitigating fraud and addressing the data challenge these emerging technologies are supporting the transition of today’s accountant into a more critical thinking role. As routine tasks become automated, finance professionals will be freed up to focus on more judgment-intensive activities. Some jobs will disappear, others will transform, and new roles will emerge.

There have been a number of incremental innovations in tax software, which have helped improve accuracy while reducing margins of error, which is something businesses want to embrace in order to avoid tax penalties and prevent issues with stakeholders.

Optimising your tax software also helps streamline audits by making them more efficient and effective. A sustained effort to understand and integrate new accounting software and other business and financial models will be necessary if practicing accountants are to effectively conduct audits and discharge their responsibilities.

The fast-paced and ever-changing nature of such software demands continuing professional development and education to maintain competitive advantage.

The arrival of cloud computing or cloud accountancy has been hugely transformative in how accountants work on a day to day basis and communicate with their clients.

By allowing accountants to perform accounting tasks from any location as well as the ability to deliver financial information and reports through the cloud there is more time to engage with the client and focus on business strategy instead of getting burdened with detailed processes.

UKRI have so far offered grants totaling £4.4m to 9 projects that are wholly or partly in the accountancy sector. We have funded a project by Beyond Green, which is seeking to develop theArena17, a trusted sustainable business assurance tool, which will provide accountancy firms with holistic business data analysis to improve resource efficiency, comply with energy & carbon reporting and evidence their sustainability credentials against global standards.

This will allow unquoted companies to understand their sustainability credentials and communicate them to investors and stakeholders. This will also position the accountancy industry as a leader in social and environmental advice for businesses.

In turn, the industry can withstand automation by broadening the scope of their services to business analysis that takes into account shifts in global trends towards transparent indicators of environmental and social performance.

Another project which has won funding, Reducr, looks to provide an unique business cost saving service delivered through accountants; they will harness cloud accounting software to automate cost savings analysis that is currently performed manually.

Working with accountants they connect to a client’s cloud accounting platform, then find key billing data, generate quotes from alternative suppliers, benchmark the client’s spend and deliver a report to the accountant. Accountants can package and sell the service in any way they choose.

The project will provide accountants with an additional service to sell to their customers and will create over £4.4m in incremental cost savings for UK businesses. It will furthermore put the UK at the forefront of cost management data analysis.

Moreover, UKRI is also helping to advance Recap, an upcoming software product for cryptocurrency accounting. Recap will ingest data from numerous large data sources and perform automated data techniques including classification, matching, aggregation and modelling in order to provide an accurate and comprehensive dataset ready for further analysis and reporting.

This offers a simple, intuitive and privacy-focused way of tracking, analysing and reporting on cryptocurrency finances, critically providing clarity on tax position, but also providing the information necessary to make timely and informed decisions, whether investment, spending or otherwise. The product will save users significant time, increase data accuracy and provide new insights.

There has been incredible development over the past five years and with proper funding and support, these innovations can continue to improve the sector exponentially. UKRI is committed to supporting the development of these technologies and integrating them into the accountancy sector. Streamlining these practices and overcoming obstacles provides amazing opportunities to cement the UK as a global leader in the sector.