How Blockchain in Accounting is Changing the Industry
Blockchain has as much potential, if not more, than the internet and the cloud for the accounting industry.
If you’re an accountant, you’ve probably noticed major leaps in how the industry relies on new accounting technology in recent years. From a growing market for individual tax preparation software to a variety of new tools for accounting firms, there’s a lot to learn – and ignoring these advances isn’t an option. It’s time for your firm to leap into the tide of technological transformation – and Taxfyle can help.
Just how hard is it for accountants to accept changing technology? Looking at larger companies, specifically those with Chief Tax Officers, only 45% of CTOs think their department is ahead of the curve when it comes to technology adoption. And we all know that, when it comes to technology, if you’re not ahead of the curve, you’re going to fall behind the competition, and the numbers get worse when you look at all firms rather than just big corporations. On that scale, a mere 25% of firms feel confident that they can keep up with changing technology. This could easily leave small firms vulnerable, to the point that they could go out of business.
One of the specific challenges that accounting firms are facing when it comes to new accounting technology adoption is fundamentally one of trust. Accountants are often tasked with helping their customers choose software services, but they don’t always know who to trust. That’s no surprise, since most accountants struggle to choose their own accounting software in today’s changing ecosystem. The first step to succeeding as a tax professional today, then, is to master choosing your in-house technology before providing that service for customers. In fact, you may want to seek support from industry experts as you attempt to transform your own technology, at least until you feel more comfortable.
Whether or not you feel like you have the necessary knowledge to select new technology offerings for your tax firm, one element you need to focus on understanding is the cloud. Cloud-based services are overtaking the software industry more generally, but it also faces specific security risks. And with cybercrime on the rise in recent years and expected to reach $6 trillion by 2021, tax firms need to recognize the indicators of secure technology as they select new tools.
At Taxfyle, we ensure your safety, and the safety of your clients, through a variety of security measures including an encrypted customer portal, Touch ID, and anomaly detection. Additionally, at the database level, we maintain relationships with SOC 2 compliant vendors to protect your client’s data. You can be confident that all of your sensitive information is safe when you work with our platform and our trusted group of licensed tax professionals.
The cloud has been transforming tax technology for years now, particularly as more companies shift towards a software-as-a-service (SaaS) model. The cloud, though, is just a modality – it’s not really a tool in and of itself. When it comes to meaningful new tools, one thing that tax firms should be looking towards is artificial intelligence (AI) technology.
Tax firms can use AI in many different ways, including as the basis for onsite chatbots. Chatbots are increasingly viewed as indispensable for expediting the onboarding process, and many companies find that by using chatbots, customers feel that they’re receiving better quality service, even when they aren’t directly interacting with a person. The chatbot bridges an important communication gap, but this is hardly the only application of AI.
At Taxfyle, we recognize the value of AI and machine learning technology and these new tools undergird our tax preparation outsourcing model. When you submit an engagement for outsourcing, our software is able to assess what special skills the task requires and route your job to the best qualified professional who can begin working on your job right away; you won’t just be shown a list of available accountants. For AI, this is a basic task hinging on pattern recognition, in comparison to how long it would take an individual to evaluate the information at hand and make a match, and the same principle applies across AI applications.
Just as Taxfyle’s matching system aims to pair your accounts with the perfect professional, new technology is supporting accountants in providing more personalized services in other ways as well. In particular, and in combination with the cloud, accounting firms today have the ability to scale more efficiently. Need to serve more clients? You don’t necessarily need to hire more employees or contractors, but rather need to upgrade your technology and outsource some of your accounts to freelancers. And with tools on the cloud, all you have to do is pay for more accounts, rather than investing in all sorts of new hardware.
Advanced CRM is also helping accounting firms personalize their offerings. CRM can help improve your communication with clients, preemptively identify client needs. Though such systems are more often associated with eCommerce companies with a wide variety of offerings, even specialized industries benefit from carefully tracking client histories, recording communication, and the continuity provided by comprehensive record keeping.
Tax software is improving to the point that many individuals think they can file their own taxes, and even at the level of the accounting firm, there tends to be less human interaction than at any time in the past. So how do you know if your firm has found a balance between technology and human interaction? The key is to ensure that the technology you choose to adopt is there to improve human relationships, not to eliminate them. At Taxfyle, for example, our software aims to help your firm enhance its client engagement by taking some of the operating strain off of your staff and improving overall efficiency.
In the same vein, firms are looking for ways to complement their offerings through technology, such as by providing an affiliated app to their clients. In fact, you can hardly find a midsize business today that hasn’t dipped its toe into the app development world. Many accountants who are offering bookkeeping services, for example, provide an app so that clients can manage their finances on the go. For accountants who specialize in tax filings, though, developing an app may seem excessive, but such firms are likely to benefit from apps themselves – at Taxfyle, we offer an app to support our clients’ needs. Worklayer, developed by Taxfyle, enables you to manage all of your outsourced work through your mobile devices so that uploading documents or chatting with your assigned professional(s) is as easy as sending a text message.
It’s hard to predict what’s coming next for the tax industry, but one topic of particular interest is likely to be technology that better enables remote work. Both traditional employees and freelancers are more likely to work remotely today, and the freelance community is growing. Tax firms will need to equip themselves and their employees with tools that enable this new employment model, and Taxfyle is here to support this changing ecosystem.
Many accountants and finance experts also expect that they’ll have to grapple with cryptocurrency in the near future, and that too will change how we use technology and meet the needs of our clients. The tools underlying cryptocurrency, specifically blockchain, are already being adopted to provide better digital security, but as more people begin to earn and spend in cryptocurrencies – of which there are many – we’ll be forced to think about money differently, not just technology. Call it innovation or the next big thing, but recent progress suggests that cryptocurrencies are here to stay.
If your firm is interested in rethinking its approach to technology, whether to grow your business or improve client relationships, Taxfyle is here to help. Contact us today to learn more about our innovative outsourcing platform and request a demo. Technology is pushing the limits of our professional worlds and we all need to be ready.
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