The Impact Of Advancements In Technology On Accountants And Bookkeepers’ Job

Background and Significance

Accounting is the process of recording financial transactions to help a company or a small business to keep records of their financial health. These reports support the company, help them manage their money better, and are used by every unit that is related to the company to move forward with keeping the profits increasing. According to statistics, every year, 83, 555 people get their degrees in accounting and there are 1. 87 million people working as accountants. Many students are spending their days and nights trying to balance the balance sheets and trying to achieve A’s in their classes, but little do they know that their own job is at risk because of the intelligent machines and the new accounting software being developed.

Many people would think that 83, 555 is not that big of a number if there are 160 Million people working in the United States, but technological advancement is not just replacing accountants’ jobs, but it is also a threat to many other occupations. In a recent report, the World Economic Forum predicted that robotic automation will result in the net loss of more than 5 million jobs across 15 developed nations by 2020, a conservative estimate. In the United States, farming jobs made up 40 percent of the workforce in 1900, but by 2000 that share had dropped to 2 percent. Similarly, 25 percent of jobs in 1950 were in the manufacturing sector but by 2010 manufacturing was less than 10 percent of the workforce, according to a McKinsey Global Institute report on automation and employment. Just like this, the advancement has been taking over many jobs and has been leaving people unemployed. Many people fear that they put all this money and time into getting their degree which will get replaced by the new software. Everyone wants to save money, why would any company want to pay for the software once instead of paying their accountants every month? It might look good for the company owners, but for students, it’s making them think twice if they want to spend our 4 years for a job that might not even exist in the next couple of years or should they change their major to something reliable for the future?

Review of Literature

Since the beginning of time, people always kept records of what they do, where their products and money go, and how they can progress whether it be a small shop that sells grocery or a big corporation making thousands. “Before the computers took over, everything was done by hands, a pencil, and a paper”. This is known as the old accounting method or manual accounting system. Many schools and colleges still teach students the manual accounting by using pads and journals. There are multiple benefits that rise about manual accounting proving that it is still better than computerized accounting as it is done on the books, so it can be done anytime and anywhere unlike computers, which will not work if no electricity was provided. Some might even say that it’s cheaper for firms.

Advantages and disadvantages of a manual accounting system

Manual accounting is how accountants did and learned accounting, but as the accounting software’s continue to grow and become more advance, and the services provided by a professional accountant are less likely to be needed. It was all started with the first computer that was developed and privately sold to a General Electric appliance factory in Kentucky, USA for accounting purposes in 1955. Even though computer was involved, they still had stacks of paper that was stored everywhere because the computer was not capable of storing that huge amount of information at the time. Then in 1978, VisiCalc came into existence, the first spreadsheet software. Also, in 1978, Peachtree Software was introduced which was a package for personal computer that was cheaper than buying a mainframe. Later, they came up with software that included word processor and spreadsheets. Soon after, Intuit launched Quicken line which was primarily focused on individuals and families to use. As the software innovation keeps improving, now most of the money related work in done virtually on computers, laptops, iPads, and phones. Some of the most recent and well-known accounting software are:

FreshBooks: Accounting software primarily developed for small business. It is easily accessible from computers, phones and tablets since everything is stored in the cloud. Some of FreshBooks qualities include easy to understand reports, you get paid faster, Insightful time tracking, and many more. It also has been featured in Forbes, CNN, and The New York Times. It has been awarded the best accounting software in 2017.

Xero: Like FreshBooks, it is also a small business accounting software which gives you your financial status right away anywhere and anytime. It is accessible on the phones, Mac, PC, and tablets. Some of the major qualities are reconcile in seconds, online invoices sent to the customers, and easy to create expense claims. It’s not just for individuals and small companies but also, for accountants and bookkeepers who want to help their clients with their businesses. As it is stated on Xero website, “Forbes identified Xero as the World’s Most Innovative Growth Company in 2014 and 2015”.

Zoho Books: An accounting software that manages your finances and gets your taxes ready. It’s Straightforward, Scalable, customizable, secure and collaborative. What makes it unique is that they try their own software for zoho finances, itself before their customers experience it in case there are any glitches.

Advantages and Disadvantages of accounting software

In the article, “Technology is the future for accountants, but not without risk” (Harper, 2018), ATT surveyed 250 accountants and bookkeepers to see what they think is going to happen to the future of accountants. ATT found three things that will have a major effect on accountants; automation, the cloud, and new accounting software. Accountants do not sound scared about new software taking their jobs, but they are leaning more towards about how it will affect it. Yet, this question still lingers in many college students mind, if individuals and companies have access to this software, then will they really need accountants to manage their finances or to do their taxes? The answer to all the question is that there is a future for accountants if they can find customers, add value to their business, and if they are willing to adapt to the new changes. Here are a few things that accountants must do and know to survive the automation in technology:

1. Technological advancement will not take accountants jobs, but it will change it and make it easier. Just because an individual can type in the numbers does not mean that they can affectively predict what should be done and what needs to be done. Colin Hewitt stated in his article, The Future of Accounting: Will it Still Exist in 2040? “Having an outside third party (human) perspective on how the books are being run is such a valuable asset that I can’t imagine that need will ever go away, no matter how automated things become”. There are skills that a human being possesses that a computer can’t replace. For example, if a person makes their payment online but one day the system is down. They will need to call the customer service to see what’s going on and how it can be fixed.
2. You must be able to adapt to the new changes. Leslie Seidman, the former Chairperson of the Financial Accounting Standards Board, had this to say about the future of accountants: "Accountants must have intellectual curiosity and a willingness to learn and embrace change". Accountants need to figure out a way to take advantage of these new accounting software and use it to their benefit. They shouldn’t fear it but explore it. AI can also be helpful to our accountants because they have the knowledge about what each number means and what can be done to help the individual further.
3. Know that you are the EXPERT! An expert will always be needed because tax law changes every now and then. Rick Miller, who is a professional tax preparer and a financial advisor said, “People come to me when they receive a letter from IRS that they put the wrong information in. They use software’s such as TurboTax to file their taxes but at the end, they need a financial advisor like myself to help them with the numbers, where they are supposed to go, and how they can save money. ” Rick miller is not letting the new technology scare him because he knows that he has that extra information about the subject that an individual who didn’t go to school for accounting might not have.
4. Bring more to the table: What this means is that specialize in a certain industry. Most businesses would like their accountants to understand their specific industry. Many companies like to see their employees have some background information about their own specific industry or company. It just adds more to the personality of the applicant that they can do more than just one thing.

The future for careers in accounting

Let’s say if the technological advancement does take over and more and more people are leaning towards doing their own taxes and keeping records of their own finances. Many people assume that a CPA can only work as an accountant in a CPA firm or as a corporate accountant but is this really all an accountant can get out of an accounting degree? Here are three careers that an accountant can do if one wish to change his/her career:

Finance Analyst: Financial analysts examine financial data and use their findings to help companies make business decisions; often, this analysis deals with investing. Rather than focusing on accounting, you can focus on finances. Many colleges require that an accounting major must take financial management, macroeconomics, and microeconomics so a former accountant will still have a little knowledge about what can be done and what needs to be done. According to Glassdoor, “The average salary for a Financial Analyst is $67, 658 in Philadelphia, PA”.

Entrepreneur: An accountant works with so many different clients with different situation. If an accountant does go ahead and start their own business, she/he can have the ability to plan effectively and try to avoid risks. All one will need is a little more knowledge about how to run a business and have enough money to survive in the beginning. According to Sakanu, “Entrepreneurs earn an average yearly salary of $57, 360. Salaries typically start from $10, 400 and go up to $129, 200”.

IT Specialist: All this technological advancement will give accountants an insight about the software. Accountants’ knowledge and experience with the software gives them an upper hand on how the software can work better and what glitches needs to be fixed. Many colleges offer courses and classes that one can take and be certified in a certain field such as IT. An average its specialist makes about $54, 922 yearly.

Expectations

Accounting has many benefits and it has been around for a long time. Many students who like working with numbers still pick Accounting as their major, not paying attention to if AI will take over and their job might not be needed. No matter how advances the technology gets, there will always be a need for an actual human being to do some sort of job such as helping the clients plan out their future for them and putting the numbers in the AI for them. Think of it like this, if a person has a headache, they can easily go to a drug store and buy a painkiller on their own and end the problem but if that painkiller doesn’t help, doesn’t make a difference that same person, will have to pay a Doctor a visit because he or she is the PROFESSIONAL to figure out where is the problem and what is going on? Let’s imagine for a moment that AI does take over our accountant jobs, will that education go to waste that a student spent four years to achieve? No, there are so many people who are doing something that they didn’t even get the degree for. Nawsheen Begum who went to get a degree in psychology, spent four years in university to get that beautiful degree to be hung on the wall but just after getting her degree, she grew interest in IT as her cousin told her about what IT is about. She went back to school, got certified and now she works in a company as an IT manager (personal interview). The point of this example is that even if AI does take over, a human being does have the capacity in he/her brain to get more education and try something different.

Conclusion

At the end of day, it all comes down to this point; a professional will always be needed. No matter what, a human being feels satisfied if a professional tells them that it’s okay. Anyone can put the numbers in a software, but a professional’s help will be needed to explain to the client about what those numbers mean. Technological advancements are taking places every day, but a human being is the one making those advancement. Despite everything, a machine can never be smarter than a human being. Human beings make these machines, these advancements so a human being will always be a step ahead of the computers.