Twenty-five years after the coining of the term “disruptive technology,” nearly every industry in the world has been affected in some way by a radical shift in methodology or operations. Accounting was a driver of one of the original disruptions in Australia, when the Australian Taxation Office shifted to online systems, which provided options for online tax submission at the turn of the 21st century and followed up with the first Business Portal almost five years later.
From there, however, accounting has been somewhat slow to adopt disruptive technology, with consumer trust lagging and experts fearful that such radical changes could ultimately mean job loss at the hands of automated systems. However, it’s undeniable that disruptive technology is poised to transform the accounting industry in 2020, and it’s humans who have been at the forefront of innovation and adoption during this “long slide to disruption”.
What is Disruptive Technology?
Technology that disrupts is demonstrably superior to its predecessors, offering powerful enough performance (and measurable results) to completely change the way an industry is run. Adoption follows quickly on the heels of most disruptions, because the improvement is so marked that all actors must follow suit or fall behind their competitors.
Accounting services such as bookkeeping, reviewing financial statements, preparing tax returns and auditing of accounting records have thus far remained primarily in the hands of a human-staffed back office. That fact will not change significantly, but the ability to streamline and speed processes has already begun. Public policy has shifted with the push for cloud-based migration, enabling technologies to provide higher levels of security. Also, customer mindsets are becoming more accepting, the economy is driving change and platforms abound for disruption.
How Disruptive Technologies will Affect Accounting
According to a recent report from CPA Australia, almost 70% of respondents say their clients are expressing increasing demand for technology and more than 83% expect said demand to grow over the next five years. Financial technology (or “fintech”) is expected to add $1 billion of value to the Australian economy in 2020, and is second only to artificial intelligence as the top startup sector in the country.
Popular accounting software now includes a range of automated systems: These include simple BAS reporting and filing, ATO single-touch payroll, real-time data and on-demand reporting from automated bank feeds or payment systems and super stream payment software that makes it easier than ever for businesses to complete accounting processes.
What does that mean for accounting professionals? Roles will slowly shift towards risk management, compliance and personalised processes as automation and AI continue to disrupt the industry by taking over more routine processes. The next new frontier may well be cryptocurrency as global attitudes shift and the landscape of finance continues to change.