How will accounting technology develop over the next five years? AT spoke to four tech leaders to find out.
- Gary Turner, founder and Managing Director, Xero
- Adrian Blair, Chief Executive, Receipt Bank
- Ed Molyneux, Chief Executive, FreeAgent
- Chris Downing, Director, product, Sage
Improved tech will bring accountants and businesses closer
Activities such as budget queries, report production, and more will be automated. Over time, accountants will learn the kinds of business information an individual or business needs and deliver that information to them proactively. This, some argue, will tighten the relationship between accountants and their clients.
Adrian Blair, chief executive, Receipt Bank said “there will always be small business owners who really want to self-serve, but it’s a great symbiotic relationship between accountants adding a lot of value and business owners. I don’t see that going away. In fact, it should increase because, with technology, they will be able to do so much more. Data is available in real-time in a way it never was, thanks in part to Open Banking, along with tools to make sense of it will advance in step with machine learning.”
Democratisation of numbers
Some businesses are moving away from finance as a department, and technology will continue to spread out into every part of the business. Many businesses will become entirely “connected”, with monitors reporting on everything from stock levels to fuel usage. The finance function would be affected and would be dispersed throughout the business.
Gary Turner, founder and managing director, Xero says “New operational APIs that provide real-time data concerning specific functions or discrete processes in the business will expose teams outside the finance function to useful data – and this will lessen the dependency on the finance team.”
“If you take employee expenses, in the past that would have been channelled through the finance function. With expense management tools, people can manage it themselves and the distilled data and approval process ends up in the finance function in a complete form” Ed Molyneux, chief executive, FreeAgent said.
Push for data convergence
Many companies don’t align and integrate their data, which can impede their progress. Commas, abbreviations, data-entry fields, nomenclature, and hundreds of similar factors are often all recorded differently, sometimes within the same business. Over the coming years, the proliferation of APIs like Open Banking could fuel an alignment.
Ed Molyneux said, “Where we’re seeing interesting things happen is data convergence, in particular in banking and accounting. The idea of merging the banking platforms with accounting systems, so they’re the same is something we’re working hard on. Others, like Starling Bank are doing the same”.
“It’s never been more important to be able to access high-integrity financial data, both for profitability and long term cash flow. This has been brought to the fore in recent months” Gary Turner added.
A real-time view of data
As a result of open data, accountants will have a real-time view of their business’s or client’s position. As a result, accountants will know instantly when things change.
“Ideally, it’ll be in real-time, and not just looking backwards, but looking forwards. As more businesses come under Making Tax Digital in 2022 and 2023, that’s going to drive a move to real-time tools, which I think should be the minimum for any business” Ed Molyneux said.
Chris Downing at Sage adds “This is inevitable. Accountants can see their 100 or more clients in a single dashboard and set up alerts. What’s improving over time is the affordability. If you want timely information, you could pay for it. Suddenly, it’s the price of a coffee, and that trend will continue.”
Death of the password
Often, passwords are easy to guess because the users frequently re-use the same one or slight variations on the same one. Neither of these options is an effective defence. The technology is already available, so will it take off?
Gary Turner at Xero says “we have two-step authentication (2SA) in place, which adds another layer of security that makes it significantly harder for someone to get access to your account, even if they have somehow managed to get hold of your password”.
Chris Downing, director, product, Sage adds “If we take any learnings from things like smart devices, FaceID provides an assurance that your private data is only accessible by you. That’s where we’ll be seeing more interaction with personal ID, unlocking information that’s only meant to be
seen by you.”
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