For thousands of years, we have relied on accountants to act as not just number crunchers but fortune tellers. After all, if you don’t know what is happening to your finances, you don’t know what is happening in your business – and what could happen to it in the future.
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“The numbers tell the story of what’s going on in a business,” says Martin Bown, a Huddersfield-based management accountant. By helping, companies understand not just where their business is at right now but where it could be going, Bown is, to his clients, a trusted guide to what the future might hold.
“There are two parts to management accounting,” he explains. “The first is the historical part: what has happened in the past and why? The second is the future-focused side: using that knowledge to decide where the business should go.”
This second part is becoming increasingly important as businesses grapple with the opportunities and challenges posed by new technologies such as artificial intelligence (AI) and blockchain. By understanding how these trends are likely to impact their clients’ businesses, accountants can help them make informed decisions about where to invest – or not invest – their resources.
According to Bown, one of the key benefits of AI is that it can help businesses make sense of the huge quantities of data now available to them. “In the old days, if you wanted to know how your business was doing, you would look at a few key indicators – maybe sales, profit margins and so on,” he says.
“But now businesses have access to mountains of data, from social media interactions to click-through rates on their website. It’s all very well having this information, but it’s only useful if you can make sense of it and use it to inform your decisions. That’s where AI comes in: by helping us to analyse and interpret this data; it ca
n give us a much deeper understanding of our businesses and what is happening within them.”
This, in turn, can help businesses make better future decisions. “If you know what has happened in the past and why you can start to make informed guesses about what might happen in the future,” says Bown. “AI can help us to do this by identifying patterns that we might not be able to see with the naked eye.”
Of course, no one – not even an AI-assisted management accountant – can predict the future with 100% accuracy. But by using AI to improve their forecasting abilities, accountants can help their clients make more informed decisions about where to invest their resources and how to respond to market changes.
Blockchain is another area where accountants are starting to make a difference. This distributed ledger technology – which underpins cryptocurrencies such as Bitcoin – is often seen as complex and difficult to understand. But, as Bown explains, it doesn’t have to be.
“At its heart, blockchain is just a way of recording transactions in a secure and tamper-proof way,” he says. “This makes it ideal for use in financial services, where there is a need for accuracy and transparency.”
In the future, blockchain could streamline issuing invoices and making payments. “At the moment, if you want to pay an invoice, you must go through a bank or other third-party provider,” says Bown. “This can be slow and expensive. With blockchain, you could pay directly to the supplier, without incurring any fees.”
This would be good news for businesses, as it would reduce their costs and help them to get paid more quickly. But it would also have wider implications for the economy as a whole. “If we can streamline the way that payments are made, it will speed up the flow of money around the economy and make it easier for businesses to trade with each other,” says Bown.
In the future, blockchain could have a big impact on how businesses operate – and accountants are well placed to help them make sense of this new technology.
The bottom line is that, as the world changes, so too must the accountants who advise businesses on how to navigate these changes. By keeping up with the latest developments in AI, blockchain and other emerging technologies, accountants can ensure they are always one step ahead of their clients’ needs. And that, in turn, will help ensure they remain trusted advisers for years to come.
What do you think of the future of accounting? Let us know in the comments below!
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