All posts by Pratibha Maurya

Automation in Accounting: The Professional Pitfalls and the Future

Automation is the hot topic these days, and rightly so, as it is transforming the work processes of every industry. This includes accounting which, according to speculation, is now on the verge of being wiped out. Advancements have been going on for decades, but the recent digitization of financial data and cloud technology has accelerated the use of artificial intelligence in the workplace. Deloitte, one of the big four firms, has estimated that more than 40 percent of basic accounting work will be automated by robotics by the year 2020.

Automation in Accounting

The global council member of ACCA (Association of Chartered Certified Accountants), Brendan Sheehan, uses the term “democratized” for technology automating basic functions. He says, just like journalism was democratized by blogs, a similar evolution is set to happen in the accounting platform. A research by the ACCA suggests that the development of smart accounting systems will largely impact accountancy for the coming three to ten years.

The Positive

The benefits are evident. Automation ensures accuracy in data entry and calculations that are done at a much higher speed. This means more time for employees to concentrate on other major tasks like advisory and analytics.

Another vital task that gets an advantage is – auditing. Presently the auditors use sample data of the financial statements to check the overall statistics. But with the integration of automation, it will be possible to check all data sets and pick out inconsistencies. Combining that with tools of analysis and you get full data checkup reports that are accurate.

Once blockchain takes a full hold on the enterprise platform, it will make audits a much easier process. It will also enhance the security of your data stored in the cloud.

The Problems

Automation is new, but the technology is being widely accepted because of its efficiency. But there are downsides to the coding system. What must be clear is that the code is written by a human, which can contain faults and will only be foolproof if all possibilities are checked.

Here is an example. One fine morning on his way to work, a tech worker in the UK found that he is out of the job. His security clearance card wasn’t working at the entrance. This occurred because of a minor human error. The automated response was because his contract renewal information had not been updated by the office. The programming of the machine showed his status as ‘no longer employed’, so the machine did as it was told.

We as humans rely too much on the technology around us. In this case, too, people followed the email correspondence overlooking the fact that this was a small mistake triggered by a human error.

So what can be done to rectify this? Our machines must have informative interfaces that are easily accessible for editing. Also, we as humans must be aware to recognize an issue and take steps to amend it. Ensuring the right inputs are being submitted and outputs must be assessed.

The Combination with New Skills

Evolution is constant. Thus, there will be several accounting tasks which will be automated in the coming years like, routine back-office work or tax filing for inheritance, income, sales and more. Also, the process reporting compliance will become smoother with new tools.

Core finance and technical skills will remain critical, and accountants would need to combine their creativity, communication and leadership skills. The real challenge will be in connecting the dots, that is, with all the data and analytics ready for you, accountants will need to apply themselves in a method that helps the management table in making decisions for the future. And this is precisely how they can create their place in the upper level.

Advanced software, like QuickBooks, has already made their way into the work process. An ideal situation is the perfect blend of both human and machine skills working together towards a common goal.

The Perfect Blend

Technology is, without a doubt, changing the scenery of industries. Experts have cleared that accounting jobs have nothing to fear, however, they will have to evolve with everything else. CPAs have a key role to play in keeping the financial balance of an organization.

Tools and software cannot wholly replace critical thinking and decision making skills. One must respect the technology and use it to our advantage, keeping our own talents over the systems. Remember, automation is here to enhance productivity, thus we must streamline our tasks in a way to better utilize our own skills.

Like a cup of coffee, blending the right mix of coffee and cream will give that amazing taste we all love. Similarly, intelligent human expertise integrated with modern technology can create that perfect blend we need to increase efficiency and business growth.

Personal Data: How Important Is It To Keep It Safe?

You wanted to buy a new mobile phone, so you downloaded an online shopping application on your phone. You scrolled through the options and ordered a phone you thought would meet your requirements. The very next day, while scrolling through your social media account, you find a cataloged ad of the same site with pictures of the phone that you ordered among other options. How do you react? Doesn’t it leave you feeling like it’s unusual?

If this is a common incident in your daily life, it is time you understand that your data is not as protected as you think it is. Your searches are being monitored; your data is being collected, and then used by third parties to raise a customer in you.

The Risks of Living In A Digital World

It is common to come across platforms where you need to enter your key details before placing an order. For example, you may be scrolling through an online listing of a rental home. But since the listing was already occupied, you registered your email id on the website to get notifications of similar listings in the future. Now you get all sorts of emails informing you about fresh listings, from sources you didn’t even sign up at.

How do you think that happened? Well, that’s the power of big data.

Your Data, Their Data

Any individual who feeds a firm with his personal data does that with the assumption that his data will be in safe hands. It is then the responsibility of those at the receiving end to keep their client’s data protected. But this is far from what actually happens. Either the firms fail to keep the data secure or they end up selling/sharing their database with other firms for their mutual benefit. This is when your data becomes theirs. These firms care less about your discretion and would not think twice before selling your data.

Your Online Behavior Drives Businesses

Now, the question that stands out prominently when talking about user’s data is simple: What will firms do with all the data they are collecting? The reason behind data collection is simple- Businesses like e-commerce websites need to find their target audience. How will they know someone needs the products they are selling? Only if someone makes an online search.

The Use Of Artificial Intelligence And Machine Learning

Artificial intelligence (AI) has helped both sellers and buyers in meeting their respective demands. Anyone who is even a little bit aware of what’s new in the tech world must have come across the term artificial intelligence. AI simply means machines acting and reacting like humans. It works on algorithms that are developed based on piles of data, which in turn allows machines to think as a human would.

Thus, the personal data that we share on several websites for one purpose or the other, is in turn used to identify our behavior and choices. This data later helps online sellers to identify their prospective buyers and target them accordingly. Although this may not be referred to as a breach, it still is a case of using the client’s personal information for personal gains.

So, How To Keep Your Personal Data Safe?

How often do we think before entering and submitting our personal information on a website? Certainly not that frequently. We live in a digital world and sharing our personal information is unavoidable. But being careful while doing so is the least we could do. Here are some of the precautions that you could take in order to keep your personal data protected:

  • Ensure The Platform Is Trusted Enough
    Do you go about sharing your personal information with everyone on the streets? Certainly, not. Same is the case with life online. Your information can reach anyone, without you knowing it. You need to make sure that the website you are on can be trusted with your personal details.
  • Use Strong Passwords
    Your password is the first and in most cases the last barrier that hackers need to cross before seeking into your personal data. However, people have been taking passwords for granted for the longest time now. Week combinations, easily guessable passwords and repeating the same passcode on multiple platforms is a common occurrence.
    Users need to use a combination of letters, numbers, and symbols to make the password tough to crack. Use a different password for every account and refrain from saving your password on public computers.
  • Go For Multi-Factor Authentication
    Using password only for security is now a primitive method for online security. Multi-Factor Authentication adds more than one layer of security to your accounts. Commonly, multi-factor authentication will include the three levels of security:
  1. Something that you know i.e. your password
  2. Something that you own i.e. your mobile phone or tablet, and
  3. Something that you are i.e. your fingerprints

With so many layers of protection, hackers have a difficult time gaining access to your critical data. Another highly successful method that serves as an added security level to your personal data is Data Encryption. The encrypted data can only be accessed by those who have the key to encryption and is practiced by a large number of firms these days.

  • Do Not Share Your IDs and Tickets Online
    We often come across people who share their boarding passes on their social media pages before leaving for a journey. Others may post photos with a wad of cash just to show off. By doing so, we are giving an open invitation to miscreants into our life. Such information can serve as a bait and may act as a welcome card for unwanted incidents. Users need to identify the line that exists between things that need to be kept personal and what can go public.
  • Avoid Unsecured Wifis As Much As Possible
    Public wifi, though sounds tempting, must be avoided as much as possible. Although rare, there are cases where hackers create fake wifi zones and before you know it, your id and password may be stolen. Unless absolutely necessary, avoid signing up with a public wifi.

Digitalization is a reality now. Artificial intelligence is living and growing amongst us. No matter how hard you try, there is always something that’s running on big data, and you know it or not, your data will be a part of it. Thus, the best you can do is follow the safety guidelines, understand the online etiquette of maintaining privacy, and keep your personal data protected. After all, there is little difference between privacy and personalization.