5 mistakes accountants make in adopting digital technology

January 25, 2023 9:03 AM

Knowing you need to change with the times is one thing. The path toward embracing a new digital landscape and learning how to thrive within it, however, is not always so clear.

For accounting firms and internal auditors, it means understanding that emerging trends such as blockchain, cryptocurrency, the metaverse, and environmental, social and governance reporting will be just as important in the future as the more routine work of reconciling, reviewing and reporting on financial data. Keeping pace may seem like a daunting task.

A recent study shows that 37% of accountants place a high value on creative problem-solving and nearly one in two are ready to try new technology. What I'm seeing from my experience working with industry professionals over the past three decades is that many accountants struggle with digital transformation.

The accounting landscape is under enormous change, requiring professionals to acquire new skills as they're called on to perform insight-driven, human-centered work in unprecedented ways. Automation helps by alleviating mundane work and freeing up time to be more creative in how accounting services are delivered, but without proper education, it can also present new challenges.

Here is what I have found to be the top mistakes accounting professionals make when embarking on a digital transformation and how to avoid them. By following a few proven key steps, accountants can make the most of digital transformation and focus on what matters most: working better and smarter and building stronger relationships with colleagues and clients.

Reluctance to give up familiar manual processes

The days of spreadsheets and paper calculations — methods that lack control, scalability and consistency — are behind us. In the current era of automation and in the face of a rapidly changing industry, it's critical to adopt digital tools and evolving software quickly.

A myriad of accounting operations, from preparing financial statements, to using software and instant messaging to communicate with clients versus in-person interaction, are now automated. In fact, Gartner Inc. estimates that simply by automating 25 or more rules in their audit and compliance systems, organizations can save more than $300,000. The faster you adopt new processes, the more time and money you'll save.

Letting data security concerns stand in the way

Information security challenges inherent in the new digital landscape are often seen as a roadblock, but there are precautions your organization can take to safeguard your data beyond choosing a secure cloud product in the first place. Start by assessing the risk level of your information assets based on how sensitive and valuable the information is, as well as who is using it and how it is accessed. Be sure to only grant access to sensitive information on an as-needed basis. Use the results of your risk assessments to establish robust security control and assign clear user roles and responsibilities that are continuously updated as your business and security threats change.

Common sense approaches, such as automatically updating your cloud software, installing antivirus software, enforcing rules for secure passwords or access, keeping vigilant for emails from unknown sources and training your employees regularly, will also go a long way when it comes to protecting your data security.

Failing to leverage robust analytics

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Auditors who are thriving and driving the industry forward are those who are learning to delve deeper into data and discover not only what happened, but why it happened. As the industry transitions towards more insight-driven engagements, the need for more analytical work, focused on discovering business intelligence to drive informed decision-making, is on the rise. It's increasingly important to work with analytical tools and solutions that are smart, seamless, easy to use, and allow you to work collaboratively.

Neglecting to adapt new operating methods

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One lasting impact of the pandemic is the prevalence of remote work. According to several surveys recently conducted by Caseware, remote work and flexibility are becoming cornerstone considerations for employees and auditors especially. It's a war for talent, and firms need to adapt if they want to have the best teams.

There are many different programs to help recruit and retain employees. Hiring "early in career" talent with great potential is one proven strategy. Boot camp experiences for more junior to mid-level roles, where employees are immersed into an organization and develop camaraderie with colleagues hired at similar times, are also effective. The more successful you are at onboarding, training and supporting your employees, the stronger your employee retention will be.

Not staying on top of what's coming next

Environmental social governance (ESG) text on wooden signpost outdoors in nature

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Emerging trends such as blockchain, cryptocurrency and the metaverse are still very experimental, yet many firms and leaders are already testing and learning them. Some companies are introducing avatars to support training or customer support, while others are exploring partnerships.

One area where auditors have an opportunity to play a crucial role is ESG. Today's investors, as well as the general public, are just as interested in how a business' actions impact the environment as they are in how they impact the economy. By bringing their well-honed advisory, assurance, reporting and risk assessment skills into the ESG landscape, auditors can help to ensure clients are prepared for these relatively new demands, and that they are on the right track to ensuring sustainability in this time of rapid societal and environmental change.