Do you remember when accountants worked with pens and giant ledgers on their desks? Although manual bookkeeping may seem like a relic from another time, it wasn’t that long ago that it was the norm. In just a few short decades, we’ve gone from pen and paper to cloud-based accounting software and AI-powered automation.
While accounting technology has undergone a lot of change quickly, so has hiring for this field. Since many of the tedious parts can now be automated, recruiters and hiring managers value a more analytical and tech-savvy accountant. Below is a quick look at the evolution of accounting technology — and how hiring for accounting roles has changed at the same time.
From Early Accounting to the Cloud
Record-keeping has likely existed as long as humans have been operating businesses, but historians pinpoint the start of accounting in the 15th century. It was then that the Italian mathematician Luca Paciol noted how merchants used books of debits and credits to keep track of debts and revenue. Paciol is now known as the father of modern bookkeeping, thanks to his writing on the topic.
Some 400 years later, the first professional accounting organization appeared. Founded in 1887 in New York, the American Institute of Certified Public Accountants codified the standards we still recognize today. Accounting would remain a strictly manual process until mainframe computers began to make their way into business during the mid-20th century. For the first time, hiring managers were recruiting accountants with some tech skills, such as punch card operators.
By the late 1970s, the first personal computers had been around for a few years. But without a compelling application, their appeal was limited to tech hobbyists. That is until VisiCalc was introduced in 1978. As the first spreadsheet app of note, VisiCalc revolutionized bookkeeping and accounting. Before VisiCalc, changing a single number on a ledger would trigger hours of manual recalculation. Now, everything was automated.
Over the next few decades, Microsoft Excel and QuickBooks would further streamline the work of millions of accountants and bookkeepers. It was now commonplace for “computer skills” to appear in accounting job postings, as the increased efficiency and collaboration of digital bookkeeping was too strong to ignore. In the 21st century, popular accounting packages have moved to the cloud, making it even easier for accountants to sit in front of a device and perform complex accounting processes.
Automation and AI in Accounting
The shift to the cloud coincided with some great leaps in accounting technology. Remember a time when invoice processing, data entry, and reconciliation were manual tasks? Today, technologies like optical character recognition (OCR) and integrated, cloud-based enterprise resource planning (ERP) apps automate many formerly manual accounting tasks.
As machine learning and other AI algorithms become common in the workplace, much of the accounting process is automated. This has dramatically shifted the expectations for accounting staff. Now that less of their working hours are filled with manual data entry and number crunching, accountants bring value to their organizations by analyzing financial data. Again, technology has shifted the hiring process, as recruiters and hiring managers now seek out accountants with solid backgrounds in data analytics and financial insights.
The Future of Accounting: Cybersecurity and New Technologies
As accounting continues to shift into the digital realm, with AI and automation taking over routine tasks, data security becomes more critical than ever. Then, as now, financial data is some of the more sensitive information for any company, so a solid cyber defense is a must. This is another change you must consider when hiring accounting staff today. A solid understanding of cybersecurity practices is necessary; you might even need security experts on your finance team.
Since the evolution of technology never stops, you can expect even more accounting changes soon. For instance, blockchain is making inroads as a tamper-proof ledger technology. As Big Data becomes the norm for organizations of all sizes, accountants and bookkeepers will need to be adept at processing large amounts of information. Big data analytics will be one of the key accounting skills from now on.
Takeaway
Accounting as we know it dates back to the 15th century, but technology has revolutionized the profession in the last few decades. Technology brings more efficiency and accuracy to the field, enabling accountants to focus more on analysis and financial strategy. For further insights into the changing nature of hiring practices in accounting, finance, and various other industries, follow MRINetwork.