Accounting is an important part of businesses large and small. The person in charge of the finances reviews monetary policy & planning and helps prevent errors and fraud. The 670,000 certified public accountants (CPAs) in the U.S. prepare the company’s taxes and could be their Chief Financial Officer (CFO).
The original tools for an accountant were adding machines and large ledger books. Today, they turn to computer applications and other technology to perform their tasks. For those looking to relieve some pressure, here are 6 types of tech that make accounting easier.
1. Online CPA Courses
The first and most necessary tool is to help you become a CPA. You need to learn how to pass the CPA exam. For this, you require the right online training courses.
Online organizations like CPA Exam Guide not only provide classes and sample tests scored by the American Institute of Certified Public Accountants (AICPA). It also directs you to the National Association of State Boards of Accountancy (NASBA) to discover regulations specific to your region.
2. Sales Tax Software
As a freelance accountant, you take on multiple clients. These could be based in different cities throughout the state. Each of them might have different sales tax rates.
Instead of manually calculating all of this information, you need to utilize sales tax software to help. This allows you to efficiently file your clients’ returns and reduce the risk of audits. Furthermore, this form of technology helps you expand your customer base as it becomes easier to create sales tax tables.
3. Cloud Computing
The use of Cloud technology continues to grow. One reason is it’s a convenient way to retrieve financial information from either a computer or a smart device. A second reason is it offers enhanced security for your customer’s personally identifiable information (PII).
Several online organizations exclusively utilize Cloud technology to serve their accounting clients. Instead of installing software, you pay a subscription fee to access their website or application and utilize their services.
4. Blockchain Technology
While it’s primarily connected to the cryptocurrency sector, blockchain technology is used across the financial industry. What it does is simultaneously protect encrypted data and maintain an expanding list of transactions between you and your clients. Thus, this information is secured during transmissions.
Blockchain also minimizes redundancy in digital communications between accountants and independent auditors. Instead of the method of double-entry bookkeeping, the information is digitally verified. Thus, issues are automatically reconciled.
5. Machine Learning
The concept behind machine learning (ML) is parallel to artificial intelligence (AI). The latter conduct rudimentary tasks like uploading documents. The former uses algorithms to comprehend transactions as more information is fed into an application.
Soon enough, these algorithms are fortified with the knowledge to catch accounting errors that deviate from the standard. As a result, more accurate reporting takes place. However, ML only works properly if the right data is input. If not, then it’s a case of garbage in, garbage out (GIGO).
6. Optical Character Recognition
Although scanning technology has been around for decades, previous versions have caused issues in the accounting industry. Case in point, handwritten ledgers & notes that were faded or indiscernible after upload. This has changed with optical character recognition (OCR).
This technology converts handwritten material into machine-readable text. In other words, it converts a receipt into editable online material. Therefore, it can be cleanly edited and delivered. There’s no need to manually copy the information from a written copy into a word processor application.
This saves a great deal of time for the accountant. On top of this, OCR prevents miscommunications between you, your clients, and the auditors. Plus, when it’s integrated into Cloud computing software, it cuts hours of manual work.
These 6 types of tech that make accounting easier are a taste of what’s out there. It’s now up to you to decide what works best. When adopting one of these technologies you must be cognizant of your customers and independent auditors. Overall, they’re the ones that receive the output of your work.
Never go with the first product you see. In addition, don’t believe the more expensive Cloud computing company is better than the cheaper ones. See what answers they provide and consider their return on investment before leaping into these environments.