Automation will continue to ease the labour crunch in accounting

September 22, 2022
September 22, 2022

Did you know that the earliest evidence of accounting dates back over 7,000 years ago during the Mesopotamian civilization? The first known records of goods traded and received detailed transactions involving animals, livestock, and crops. People used a system that we still use today to determine whether there was a surplus or shortage of crops and resources.


The history and timeline of accounting:

1494 – An Italian mathematician named Luca Pacioli, considered the father of accounting, introduced the double-entry bookkeeping system, which would change the accounting landscape completely.

The 1800s – The Industrial Revolution spurred the need for more complex and advanced record keeping. The emergence of accounting as a profession started in the UK.

1955– The first organization purchased a computer solely for the purpose of bookkeeping, opening the doors for advancements in accounting.

1978 – Visicalc, the first spreadsheet program for PC, was created. Peachtree Programming introduced the first bookkeeping programming bundle for PC, presenting the first automation system for bookkeeping.

1998 QuickBooks was established and placed computerized bookkeeping within reach for small businesses. Up until this point, digitized bookkeeping was only attainable for large Fortune 500 companies.

The impact of automation on the accounting industry

It’s safe to say that accounting has come a long way since then. Today, the industry has evolved to include automation, artificial intelligence (AI), application programming interfaces (API), and cloud systems.

Modern accounting is more efficient, and accurate, and has fewer human errors than previous methods.

A bookkeeping mistake has the potential to create a crippling domino effect for an entire organization with inconsistent numbers, underreported taxes, and inaccurate business forecasting. Before automation and the digitization of bookkeeping, accountants did their work with ledger sheets, pens, and adding machines which required hours, days, and even weeks for tasks that would take mere minutes today. The result was overworked accountants and a shortage in the industry for accurate, transparent, and efficient bookkeeping.

Modern accounting has been made even easier with APIs, which allow different software and apps to integrate with your accounting system. For example, an app like Expensify intuitively pulls data from photos of invoices and receipts and records them into the general ledger. Automation streamlines the bookkeeping process, saves time, and produces error-free reporting that eases the labour crunch on accountants.

What’s next for the accounting industry?

It’s important to distinguish between reducing the labour crunch on accountants versus a reduction in demand for accountants, which contributes to the false narrative that automation and AI will take over accounting jobs altogether.

The digitization of accounting systems does not indicate that robots will entirely replace accounting and bookkeeping. Rather, it means that the role of accountants is shifting.

By spending less time performing repetitive tasks, accountants can invest more time in analyzing data to develop long-term strategies, reduce risk, and add even more value for organizations. The result? Better financial health and a higher chance for companies to succeed in today’s ever-evolving and competitive business landscape.