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We are officially in the era of digital transformation where technology has greatly impacted audit processes. This has ushered changes that were hard to imagine as possible about a decade back. While the accounting profession has by and large embraced technology in various processes, it was restricted to the documentation, calculation, stor age and retrieval process. However, this is all set to change as cutting-edge technology dons a greater role in auditing. The clamour for different reporting and financial statements has been growing, and technology has all the right answersv. Taking a leaf out of fintech companies for development of intelligent software Bookkeeping outsourcing company in uk. Processes that will be touched by technology will include those areas where it may be necessary for a machine to understand and use that knowledge to identify complex information. Fintech companies have been able to deploy automated solutions by leveraging the power of AI and machine learning. Auditing will similarly find a greater role for technology, beyond the present functions. For instance, technology has developed to a level where it is possible for AI powered systems to look at all the data of a company that is being audited and identify anything that is amiss. This will help auditors to turn their focus to flagged areas that need more of their attention. Evolving reporting requirements Bookkeeping outsourcing company Present audit reporting helps investors and shareholders understand the financial health of businesses. However, in the context of a data driven world with more and more information available, there is an increasing chorus for auditors to share additional information. Stakeholders are of the opinion that auditors possess more information, than what is actually reflected in the reports. And the demand is for more contextual information from auditors about how a specific conclusion was made or arrive at. Readers want to know how the auditors arrived at a conclusion. This open the floodgates of confusion. Auditors crunch numbers and make conclusions, expecting a reader to do the same is an invitation to chaos. However, technology has the ability to present relevant information in the right form for dissemination, that is in alignment with the overall findings/conclusion. Impact of revisions and penalties corporate secretarial services in ukThe Financial Reporting Council released revisions to International Standards on Auditing (UK)[1], which had more to do with the Code of Ethics. This has great significance for auditors and by extension the companies that are being audited. The changed standards, despite being limited in scope can have implications for stakeholders. This needs to be read in the context of the fines levied by the FRC, on some of the top global auditing firms for misconduct. Even as the dust began to settle over the fines and the circumstances surrounding it, most of the iconic and respected auditing firms commenced an overhaul of their systems and processes, bringing in more technology driven processes to strengthen existing processes. This will be the order of the future, as auditors look towards technology for greater compliance. Moving from sample testing to testing of all transactions In the future, auditors will harness technology to carry out checks of all transactions, and not just rely on a sampling or random check of transactions. While the certainly humungous volumes of transactions may have come in the way of checking out all the transactions in the past or the present, this is all set to change. With the use of the right technology, not only will all transactions be checked, they will be completed at high speed, which means that the process of checking will not add to the time element. And this aspect of checking all the transactions will help auditors to gain more insights about the financial health and other inputs about the organization and the domain it operates. This will be invaluable to investors and shareholders who will now be able to understand reports on the basis of checking all transactions and not just a sample. Sampling has a probability of error, which will be corrected in the future. The need for speed The new techno-social order has turned time on its head. Processes that once took a specific period of time has now been shortened drastically. As a consequence, all other allied processes and procedures are also expected to commence/conclude at proportionate speed. Effectively, this has led to a cascading effect. Audit, resultantly, requires to be concluded faster than ever before. Manual processes do not stand a chance of delivering results at speed or with the accuracy and precision required. While it is impossible for technology, as it stands now, to replace the power of human intuition in tasks as complicated as auditing, many of the tasks that are repetitive or rote in nature need to be entrusted to technology and automated processes to be able to meet the deadlines. Leveraging the power of blockchain for cost effective audit processes Blockchain is the buzzword that will continue to hold sway over businesses well into the near future. And by virtue of being a distributed ledger, blockchain is the natural bedfellow for auditing processes. Auditors need not seek information or wait for clients or third parties to furnish statements, or any documents for verification and cross-verification. Auditors can simply carry out the verifications from blockchain ledgers. With the power of offering verifiable and immutable transactional information, these ledgers will save a lot of time and money, in addition to the assurance of offering information that is accurate and free from errors. This is basically, because the transactions themselves would have been carried out only after fulfilling the criteria or conditions of all –parties involved in the transaction. Analytics only as good as the data that is fed Analytics can be only as good as the data that is fed, which means that standards also need to improve so as to offer data that is of the right standard. While systems will be powered to detect anomalies over entire transaction history, the advantage of perception that is available to the human mind and the logic of perspective will be unavailable to technology driven systems. This will make it mandatory for records to conform to certain standards. The quality of the data and the processes or technology that is available to bring in the data from many sources needs to be advanced so as to prevent gaps in data capture and its use. The need for more regulations and standards Past processes had stakeholders trying to catch up with the regulations and standards. For instance, auditors and organisations had to fulfill or meet the standards and regulations as laid down and the need of the hour used to be a scramble to meet the standards. However, with changes in the way business is conducted, there are multiple issues which cannot be met or fulfilled by existing standards. This turns the whole equation of regulations and standards on its head. Regulations and standards are now expected to keep pace with the developments and evolving changes in the world of business. Till the regulations and changes are in place, auditors and businesses will have to work within the contours of existing regulations which may not be very easy considering the inherent differences among domains. Conclusion: Auditing is a proven facilitator for growth, in addition to meeting the requirements of accounting and financial reporting. While nations have their own set of policies about the size of businesses that need to be audited or not audited, it is a proven fact that auditing is one of the pillars of growth of a business. Technological innovations will assist the acumen of humans to bring about greater accuracy, improved reporting and faster conclusion. Auditing will not be limited to random checks but will encompass the whole history of transactions for specific periods. Contrary to popular belief, technology will not take the place of humans, but will help humans in their deliverables.

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Own your time by automating and outsourcing your accounting processes 

3:42 pm 28 September 2018

Due to the rising market competition, growing regulations and compliances and increasing customer demands, companies are under immense pressure to enhance their efficiency while reducing their internal costs and overall expenses. For any company, managing the accounting process can be quite challenging, as accounting entails a range of mundane, repetitive tasks such as data entry. Moreover, some accounting functions, such as bookkeeping, payroll, and taxes, need dedicated resources who are specialists in their designated fields. Since transaction volumes are rising by the day, they are putting more pressure on the available resources in enterprises and taking up a lot a precious time that owners could have otherwise spent on their core business functions. Therefore, companies are seeking an effective business solution to tackle their accounting woes. With dedicated organizations taking care of these niche areas like accounts outsourcing, bookkeeping outsourcing company, payroll outsourcing services provider companies, and even tax outsourcing services providers, companies can get a breather from managing these in-house. Other than outsourcing, companies also can automate their accounting processes.  

Both the concepts and the profits companies can reap from them have been discussed in this article. 

  

Accounting Automation 

  

Technology is changing the future of accounting, and with technology, automation has humbly paved its way into the accounting profession. Accounting automation helps do away with routine accounting tasks, such as bookkeeping, which can be easily automated to have less resources tied down. Accounting automation successfully brings the entire accounting, invoicing, finance, inventory, reporting and CRM functions to work in sync and harmony, leading to a less stressed and happier business. Automation can also work in tandem with companies’ banking partners and do all the hard work on their behalf, right from reviewing entries to tallying books—everything is taken care of. 

  

The benefits of automating the accounting process are diverse and listed below are the main reasons why it is a sensible decision for companies to implement accounting automation.  

  • Tax compliance: Accounting automation software and systems are designed and configured to automatically comply with the latest tax regulations and compliances. Therefore, with accounting automation, companies do not have to worry about skipping tax compliances and not adhering to accounting regulations. 

 

  • Time and money savings: This is the most important reason that drives millions of companies worldwide to opt for accounting automation. Once companies have entered and saved the information of vendors, customers, and employees, they don’t ever have to re-enter or refill the data again. Forms, invoices and even checklists will be pre-populated with the saved data, and users simply have to pick their choice, which helps save not just time but also money. 

  

  • Improved accuracy: Automation and accuracy walk hand-in-hand. Since accountants are not re-entering data into the system over and over again, the chances of errors reduce drastically. Moreover, the accounting software does all the calculations, including totals and subtotals for all types of transactions such as sales orders, profit loss statements, credit memos, cash disbursements, and purchase orders. The software also calculates the sales tax and payroll deductions, leaving no scope for human errors and increasing the overall efficiency. 

 

  • Customizable reports: The accounting software greatly increases the reporting efficiency of companies. Without automation, it is a tiresome and error-prone task to generate customizable reports for cases such as defaulting customers, best-performing assets, worst performing employees, etc. However, with automation, this challenge can be easily addressed because the accounting software arrives pre-configured with multiple report templates that can be easily customized. 

  

  • Faster payments: To keep the business running, receivables matter and the accounting software makes it easier for companies to receive payments from their customers. The software has functionalities that allow companies to send invoices through emails and accept credit/debit cards for processing payments. 

  

Accounting Outsourcing 

 

Apart from using an automation software, the other solution companies can opt for is to completely outsource their accounting process. With automation, companies still have to monitor and review the information being fed into the systems and even employ appropriate measures to protect, upgrade and maintain the implemented systems. With outsourcing to an accounting outsourcing companies, all of these hassles take a step back, as a third-party provider will be completely responsible for carrying out all accounting tasks on behalf of the companies. Therefore, in the long run in terms of cost savings, outsourcing the accounting process is a more viable option for companies. Let’s glance through the major benefits companies can gain by outsourcing their accounting process. 

  

  • Automation: The accounts outsourcing process offers all the automation power provided by an accounting software. Moreover, with the rise of cloud computing, it is now possible to transfer data from one system to another with large-scale automation, which was previously not accessible. Due to the cost-efficiency of cloud services, companies, large and small, can choose the services of a cloud accounting provider to leverage the cloud flexibility and access resources without spending a lot of money. 

  

  • Round the clock financial advice: Outsourcing the accounting process to a specialized accounting outsourcing company provider allows companies to access the accounting expertise of the provider, which can prove to be extremely beneficial. These services are usually available 24/7 at the request of clients and are complementary with the service package. However, some accounting firms do offer expert financial guidance at an additional cost. This guidance can be for diverse topics, including tax planning, entity structure and growth strategies. 

  

  • Reduced tax preparation fees: Most public certified accounting firms charge clients by the hour for tax preparation. They cannot afford charging a fixed rate because most the data they receive from companies is either incomplete or inaccurate. Therefore, they have to put in a lot of hours for tax preparation and charging a fixed rate would be a lost bargain for them. However, if the books of a company have been maintained up-to-date by their outsourced accounting provider, it would take less time and thus less money for the company to have its tax prepared, as most of the records will be accurate and updated. 

  

  • More economical: In the long term, it is certainly more economical for a company to outsource its accounting process rather than managing it in-house. It is more expensive, time consuming and tiresome to spend countless hours doing invoices, recording transactions, filing taxes and reconciling transactions. Moreover, this may sometimes require the hiring of specialized resources, which would incur more expenses. Today, there are multiple specialized accounting service providers who offer all accounting services as a package, and these packages can also be easily customized to match specific business requirements. Cloud packages are more cost-efficient, thereby offering companies a more economical business solution. 

 

  • Peace of mind: Every business owner is entitled to peace of mind, and research says that business owners feel the most secure when their accounts are in the right hands. Outsourcing is the way to this much-needed peace of mind, leaving owners with ample time to focus on their core business. With outsourcing, owners do not have to worry about their books. Right from bookkeeping and payroll to financial reporting, the outsourced provider takes complete responsibility for the company’s accounting functions. 

  

What could be better than receiving a fully updated financial report at the end of every month but without having to go through the hassles and complexities associated with reporting? Having accounting specialists create and review these reports and even discuss how they apply to the business, brings a lot of satisfaction to clients. Thus, outsourcing the accounting process frees up a lot of time and reduces the unwanted and constant worry business owners usually have on their shoulders. 

  

To automate or to outsource? This is dependent purely on the business requirements and priorities of the company. However, both have their own pros. 

BY: AMIT AGARWAL 

 

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