Digging through a box of receipts for an audit. Queuing at the post office to mail your return. Literally cutting someone a check. In the age of data analytics, e-filing and online banking, such practices are so out of step with the modern accountant as to be nearly extinct. Joining them soon will be manual data entry of any kind, making things like keying in journal entries and filling out tax forms an artifact of an earlier era, akin to green eyeshades and hand-filled spreadsheets.
For this first installment of our new series, “The Frontier,” we explore the trends pointing to the eventual end of manual data entry, as well as what implications this move carries for the profession as a whole. Thought leaders in the field of accounting technology, like L. Gary Boomer, visionary and strategist of Boomer Consulting, believe that soon there will be little to no human input for most data entry, as ingestion and aggregation will generally be done automatically by computer.
“In the accounting world, data entry and aggregation of tax data, in a paper and digital world, are two things that accountants are doing now that they probably will not be doing,” he said.
Part of this, he predicted, will be the end of spreadsheets, something he conceded will be difficult for accountants to swallow. But systems, he said, are already abandoning the need to have a spreadsheet or model for every situation, and felt this will likely continue. While he appreciates the role played by the humble spreadsheet in the profession’s history, they have too many inherent limitations to survive much longer.
“How do you get the data in? And how do multiple users work with those? We’re seeing tools like Fathom and Jirav that build scenarios and once you’ve got that, you’ve got a system. With a spreadsheet, oftentimes the person who developed it is the only one who knows the logic behind it, and if someone changes a cell or formula it can certainly be disastrous,” he said.
Randy Johnston, founder of Network Management Group Inc., agreed that the time for humans manually entering data will soon come to a close. He noted you can already see signs of this in things like bank card fees, which come from automatically collected data versus something a person typed with their fingers.
“What is being done today is much of the data that is being put into systems is being manually entered. Much more data capture will be automated. … Today there is still way too much data entry going on, and five years from now that will seem very backwards,” he said. “If an accountant is keying data, you have a broken process.”
Roman Kepczyk, director of firm technology strategy for Right Networks, said that this final shift away from manual data entry will be helped along by increasing integrations between platforms that will be able to trade data between them. He brought up the example of populating a W-2. He’ll get client authorization to go directly into ADP to get their W-2. The data will flow directly into his account, where it could auto-populate the tax return and even provide advice. He pointed out that the bots right now capturing data will become much more commonplace.
“Right now we’re manually making these connections, like for instance with TSheets: We have to take that data to set up QuickBooks to accept the timesheets. In the future we’ll see it saying, ‘We notice you have timesheets, want us to import them, yes or no?’ and I think it will be more and more integrated,” he said.
Johnston noted that many of these advances will mean the phasing out of legacy tools in virtually all areas: practice management, document management, workflow, tax software, audit software — almost none will survive as these processes will need to be reengineered practically from the ground up. In certain cases, even tools that automate data entry today will still be replaced as better versions come out; Johnston singled out tax software in particular, which he said is still fairly clumsy when it comes to importing data.
James Bourke, managing director of advisory services at Top 100 Firm Withum, said that even importing documents will eventually be obsolete, and there will be no more paper and no more digitization of paper documents. In the past, he said, an audit client might give an accountant a printout of their trial balance from QuickBooks, and perhaps a few Excel spreadsheets as well, which would then be processed into the firm’s systems. In the future, he said, auditors will get the data not from the client but from the cloud, after which programs will then auto-generate work papers, all with no human intervention whatsoever.
“It will be data to data. Data comes in from clients. We want bank statements, things like that? Who needs them? We’ll grab the data from the bank. It’s even better,” he said.
This story is part of a new Accounting Today series called “
As the global economy becomes increasingly technology-driven, so too has the accounting profession. Long gone are the days of hand-cranked adding machines and paper spreadsheets filled out in pen. In their place is a technological era where even the most routine office functions are now handled by sophisticated computer programs. In this world, things that may once have seemed the stuff of science fiction are now mundane, bound so tightly with everyday life they’re hardly noticed at all.
But what lies beyond that? What are the limits of what we can achieve right now, and what still lies just beyond our grasp? And how will the profession be affected once they’re within reach? These are the questions we aim to explore in the Frontier, a new regular series where we explore the cutting edge of accounting technology through conversations with thought leaders across the country, who will share with us their observations, hopes, concerns and even a few predictions here and there.
We’ll see you at the Frontier.
