How to future-proof a business with accounting technology

While the accounting sector has long been shaped by technology, and in particular automation, the last couple of years have perhaps laid the foundations for the greatest change to date.

At the heart of this shift is AI and its growing integration with accounting software. But change is also being driven by evolving customer habits in a post-Covid and digitised landscape. We are now in a world where real-time data access, data sharing and instant communication (wherever you are) are not just desirable to customers, but absolute must-haves.

In this evolving landscape, accountants and finance teams need to look ahead and ask themselves whether their current technology is blocking them from achieving future success. More often than not, finance leaders sweep the task of upgrading their software under the rug and are held back by outdated, legacy software. The inefficiencies of these systems and other business priorities impede their ability to implement new tools and ways of working, risking the health of their overall business performance.

However, cracks begin to show as businesses grow in complexity and manual processes become unmanageable. Delaying an upgrade to a more sophisticated offering hinders finance teams and exacerbates problems, causing workload strain, loss of valuable time and prevention of future growth.

Acknowledging legacy software issues

The use of legacy software in the modern accounting landscape is inherently inefficient. Why is this the case?

For one, there is a distinct lack of automation, with many manual processes still in place. Platform interfaces can look dated and are non-intuitive, impacting the user experience. These are all issues that a modern-day accountant, especially in a more junior position, wouldn’t expect to be present.

Moreover, these legacy systems have difficulty integrating data from other business systems, such as e-commerce or order-processing platforms. This means the data has to be re-keyed into the finance system, producing more workflow inefficiencies and leading to potential re-keying errors.

Crucially, limited system integrations – coupled with issues stemming from manual data entry – create a lack of real-time visibility of live financial data. This real-time overview is further inhibited by an inability of the software to link to other external data sources such as bank feeds, benchmarking data and large learning language models (which, of course, AI needs).

Ultimately, the use of legacy software means companies are restricted in their ability to innovate and scale, as their systems are based on old technology.

But with these legacy issues very much apparent, why do finance teams still face blockers to change?

Typically it is not because of a reluctance to upgrade software but due to the perceived practical difficulties, costs and time needed for a digital upgrade, alongside ‘more pressing’ priorities.

Senior leadership might think the process of migrating to a new system will cost too much when the reality is that keeping legacy systems in place will end up costing them more. Moreover, if a CFO is already being pressured into finding cost savings and reducing resources, it can feel like an overstep to ask for investment to upgrade their accounting software.

Leadership may also not see the need to upgrade software (even when digital transformation is necessary), as they either know no different, or their finance team is managing to perform with the software they have. In many cases, there can be a preference to stand by the “If it ain’t broke, don’t fix it” mentality.

An upgraded approach

The clear benefit of upgrading accounting software is the shift from manual processes to automation. There will be finance teams performing manual tasks which are unnecessary in the modern tech age: entering data into spreadsheets, checking data for anomalies, extracting data from different bank accounts, sending recurring invoices each month, and inputting data from paper documents/receipts. Naturally, a great deal of time is spent carrying out such tasks which, even more worryingly, leaves room for error.

By implementing cloud accounting software, finance teams can unlock a whole range of automation capabilities, like processing supplier invoices, bank reconciliation and revenue recognition, that allows them to save days of time every month.

The latest cloud accounting platforms also come with a vast range of integration options and utilise custom APIs to connect with other business-critical software, from CRM systems to payment and inventory platforms. This creates a real-time visibility of financial performance that stretches across the company and any subsidiaries, taking away the need to manually re-enter data from one system into another.

With more time to hand and each bit of financial data available in one location, finance teams can easily view and analyse data to make quicker, more informed decisions.

How upgraded software can future-proof a business

By transitioning to the latest cloud-based accounting software, businesses gain long-term benefits that allow them to make long-term, strategic decisions. The reporting and data analysis features provided by these solutions not only offer real-time insight into current business needs but also allow users to spot trends, opportunities and pave the way for strategic planning.

As AI starts to play a crucial role, it makes sense that businesses will look to implement systems and technology that will facilitate AI when it becomes a common feature in their sector. Although AI is not readily available in accounting software yet, it will inevitably play a bigger part in years to come. By upgrading to cloud-based systems, firms are taking a big step forward in future-proofing their business so they can adapt quickly and easily when AI does start to have an increased presence.

In short, the longer companies delay upgrading their software, the longer it will take them to create organisational change and introduce new ways of working. Therefore, by integrating these tools now, they can set themselves up as a finance function of the future.

Time for an upgrade

It can be easy to settle with an accounting platform or system for years. After all, companies may be performing adequately and not see the issues that are being produced by holding onto their legacy systems. Not only will this affect a finance team’s potential performance and working processes in the short term, but in the longer term, it could leave the company facing higher costs, dealing with data inaccuracies, security breaches and compliance issues, and falling behind competitors.

Multiple automation capabilities, real-time data visibility and system interoperability have become essential to any financial system, and companies can no longer afford to go without them. By upgrading their software now, they can future-proof their business in an increasingly tech-driven accounting landscape.

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