Question

How do management accountants get value from, and measure the value of the information obtained from the digitalization (technological advancement) account system for decision making? How will it push the boundaries of how accounting will be conducted? Discuss (300 words)

Answer 1

Introduction

Digitalization is transforming companies and other organizations more fundamentally than the business world has ever seen as companies are transformed, so their finance and accounting functions, and in turn, their financial statement audits. The principles of accounting remains the same, even in digital age. However, technological trends have the potential to transform accounting.

Digital technologies can process data far more quickly and reliably than human beings can. They can provide opportunities to fundamentally redesign many financial procedures and generate added value.

It has been said that “accounting is the language of business.” The ever-evolving digital technologies of accounting will affect the future of financial professionals in ways that have not yet been imagined.

Digital accounting refers to the formation, representation and transmission of financial data in an electronic format. Computers and accounting software have transformed the financial industry. Technology advancements have enhanced the accountant’s ability to interpret and report data faster, more efficiently and more effectively than ever before.

The greatest benefits of the digital age to productivity can be organized into four main categories. They are E-Business, Cloud Computing, Enterprise Resource Planning (ERP) Systems and Digital Technology Advancements.

E-Business

Electronic business processes allow team members to coordinate activities for internal management and combine the client’s information with a financial professional’s data via the use of digital networks. Enterprise applications can be shared via internal and external networks called Intranets and Extranets. The use of these technologies distributes information through a single point of access such as a Web interface using the highest level of encryption security standards available.

Cloud Computing

Software-as-a-service (Saas) provides the core of the cloud computing experience. More and more companies are creating custom platforms to facilitate the access of data via all kinds of mobile devices. The ability to access information at anytime from anywhere is now imperative.

Enterprise Resource Planning (ERP)

ERP systems are software programs that bring different departments in an organization into the same collaborative environment. They make information available from diverse groups and support activities from multiple locations.

Data is accessed through a central database and shared from different functions such as accounting, finance, marketing, human resources and manufacturing. ERP improves business performance by allowing management to get a full three-hundred-sixty-degree view of how a business is performing in real-time. This is a huge advantage in the ability to make major business decisions with increased accuracy, reliability and speed.

Digital Technology Advancements

The nature of digital accounting systems are characterized by easily accessible and retrievable data through the utilization of integrated systems, real-time reporting and ongoing development.

New technologies in digital accounting are designed to fulfill an overwhelming pressure for “data on demand.” Smartphones, Apps and Social Media are the primary conduits for this process. Constant advancements allow accounting professionals to spend more time advising clients and assisting them in developing strategies than simply generating financial reports.

The main benefits of digital accounting are

Real-time cash flow

The main functionality of a digital accounting system is remote access to your company information. You can track your results from anywhere, anytime.

Thus, you can analyze your cash flow and make quick and assertive decisions about investments, payments, etc. The advantage of doing this online monitoring is to improve the relationship you have with your company's finances.

You will have control of all the inputs and outputs of your box whenever you want: at the end of the day, at the end of the week or even during the running of your business. This enables you to analyze your business's financial projections more clearly and securely.

With cash flow in real time, it is easier to decide on the financial future of your company. If you have this remote control, you can be in some meeting outside the company (or away from your accountant) and access your box information. All by the computer, anywhere and anytime!

Reduction of costs

Digital accounting tracks the market's tendency to reduce the issuance, handling and archiving of paper documents. Think, for example, of electronic invoices and the ease of an entrepreneur to register as MEI.

Withdrawal of physical and geographical limitations makes it possible to select the best partners for your business. It is possible to select the best platforms for managing your company, the best accounting services, the best suppliers and of course reaching the best customers.

Expanding your network allows you to select services cost-effectively and efficiently. That's why digital accounting reduces the operational costs of your business with:

· Reduced issue, handling and filing of papers.

· Agility in the generation, transmission and analysis of information.

· Breaking geographic barriers in your network.

Automation and scalability

The internet has brought numerous possibilities for business process automation. When that automation adds up to breaking the geographical barriers of your business, you gain in scalability.

Digital accounting brings greater reach to your business, since it eliminates the old difficulties of transmitting information. The main tool of digital accounting and bringing greater automation and scalability is the systems integration.

You can connect your company's accounting and financial routines with partner companies at various points in the management processes. The integration of systems enabled by digital accounting makes it possible to:

· Exchange of financial information;

· Receipt and sending of declarations and contracts;

· Generation, analysis and reporting between systems.

With this relationship between different systems, you do not have to manually apply purchase, inventory, cash flow and balance sheet information. The different systems are integrated and the information is synthesized and forwarded to the right documents.

So your business saves time and your employees can focus on analyzing and interpreting information. He realized that the result of digital accounting Is it a better use of the capabilities of the Internet and your team?

After all, systems do repetitive tasks and professionals stay focused on results!

Security and agility

When you adhere to the possibilities of digital accounting, you need to value the security of your business information. It is always important to evaluate the security measures taken by the company you hire to manage your business data.

In this sense, the best companies of digital accounting systems enable the storage of data in the cloud. This model is more secure, especially when it has SSL technology for encryption of information. This data security strategy is the same as that used by banks.

In addition, cloud storage is more convenient for businesses. In addition to having a high level of security, it does not require physical installations or software. This facilitates monitoring by the company responsible and reduces the costs of purchasing and maintaining the system.

Digital accounting, when practiced with cloud systems,

· Brings greater security

· It's cheaper

· Offers practicality

· It is accessible from anywhere

Accounting consulting

Digital accounting enables the integration of accounting systems. With this, the accountant can focus on results analysis and consulting.

The internet enables the work of the accountant to act beyond

· Organize documentation;

· Track finances and;

· Pay taxes.

Thus, the accountant can position himself as a business consultant, with financial analyzes that assist in the decision making of his clients. This consulting can be done with the delivery of customized reports, with suggestions for improvements in investments, with analyzes separated by accounting sectors, etc.

This customization of the counter service is only possible from the benefits of accounting integration. After all, the automation of some tasks, the greater reliability and practicality of the information through the integration of systems allow the accountant to keep his focus on the analysis and interpretations of the company's financial flow.