Accounting professionals have good reason to be cautious when it comes to implementing new tools. However, many nonprofits may find themselves at a tipping point in which the shift to technology-supported workflows may be necessary to help meet both staffing needs and the demand for greater reporting transparency set by donors and other stakeholders. Fortunately, nonprofits have at their disposal new accounting technology that can help improve workflows, boost efficiency, and strengthen financial reporting.
Below, we describe some of the solutions enhancing modern accounting, as well as the impact these tools are having on today’s accounting workforce.
1. Cloud-based accounting systems
Cloud-based systems have become ubiquitous in modern workplaces. Yet many nonprofits continue to use dated server-based systems that are reaching, or past, their end of life and are no longer supported by the software manufacturer. There are numerous reasons for this. The cost, knowledge, and time investment required to move to new cloud-based solutions may prevent some organizations from moving forward. Others may be reluctant to give up the sense of control and security that comes with securing access to financial data on a single server.
However, the advantages of adopting accounting technology on the cloud far outweigh the drawbacks. Chief among these advantages is the security that a cloud-based system can provide. As software manufacturers push their customers to cloud solutions, many are abandoning security updates to server-based software. This will leave organizations clinging to servers at greater risk of cyberattack. By shifting to the cloud, nonprofits can trust their data and their security protocols are always up to date. Moreover, moving accounting to the cloud allows financial stakeholders real-time access to data when and where they need it. Because many modern cloud systems can be easily and securely integrated across other systems, it becomes easier to track funding data in real time. This also enables stronger collaboration across teams. Finally, the cloud offers the additional benefit of widening the hiring pool for financial professionals – allowing your team to bring on remote or hybrid accountants with the skill sets you need.
2. Automation and artificial intelligence solutions
Artificial intelligence (AI) and machine learning solutions are impacting virtually every industry today, and accounting is no different. These tools can automate routine tasks such as expense management and invoice processing, reducing the risk of human error and delivering new levels of efficiency. AI-supported accounting technology can flag anomalies or identify misuse of funds. By adopting AI technology solutions, nonprofit leaders can gain valuable insight that can improve forecasting and drive strategic decision-making.
While potential use cases for AI are still being explored, all of these uses are meant to help accountants in their jobs, not replace them. These modern tools make it easier to process and track data and perform routine tasks. This gives financial professionals the support they need to focus on more time-intensive tasks, such as data analysis, that add greater value to the organization.
3. New accounting technology demands new skill sets
These new technologies are driving changes in the types of skill sets needed by today’s accountants. For example, many organizations are now looking for a hybrid blend of IT and accounting skills. Due to the rise of automated workflows, organizations are increasingly looking for individuals who can think beyond debits and credits. There’s a need for people who can communicate financial information across departments and to public stakeholders, and who can analyze financial data to develop stronger strategies and better navigate revenue trends.
Some of these hybrid skill sets may be more difficult for smaller nonprofits to recruit. As a result, consultative outsourcing is expected to see even greater demand in the future. An outsourced accountant typically offers broader experience, greater bandwidth, and more up-to-date knowledge of best practices than an in-house accountant. In addition, these professionals tend to be more strongly invested in staying up-to-date on systems, regulations, and tools. Outsourced accounting partners have the added benefit of being able to apply best practices gleaned from one organization to other nonprofit clients. If you’re ready to realize these benefits in your organization, then it’s time to connect with Vault.
