The Impact of Technology in Accountancy

The Impact of Technology in Accountancy

In this article Neil Hall, a Strategy Consultant at Daisy, delves into the profound transformation of financial accounting, shifting from traditional manual processes to the realm of digital records. He explores the far-reaching impact of technology on the accounting profession and sheds light on the complex challenges faced by the industry.

In the early days of my career in the technology sector, financial accounting predominantly relied on manual processes, resulting in extensive paperwork and the need for on-site and off-site filing systems. However, the advantage of this approach was the existence of a comprehensive paper trail for every transaction. Fast forward some 40 years, and it is now mandatory for all VAT registered businesses to maintain digital records and file tax returns using compatible software. Similarly, requirements for income tax, applicable to self-employed individuals and landlords, are set to be implemented from:

  • 6 April 2026 for those that have an annual business or property income of more than £50,000; and from
  • April 2027 for those that have an annual business or property income of more than £30,000

As a result of the challenges posed by business and personal tax requirements in the digital era, an increasing number of businesses are seeking the assistance of professional accountancy services to navigate the complexities of digital taxation. However, this trend raises an important question: what implications does it have for the accounting profession?

Digitisation and technology in general have had many effects on the accounting profession, the introduction and continued evolution of technology (and accounting practices) are seen by some as simply changes to the profession that have enabled them to be a lot more efficient in billing units of time. However, the advent of technology has brought about shifts in hiring practices, with a greater emphasis on recruiting personnel with strong technological acumen. Moreover, it has necessitated continuous education and training for accountants, encompassing not only traditional accounting practices but also a wide array of electronic tools and online applications that are currently prevalent in the market.

For the technologists in accountancy, whether a CIO in a large firm, or an IT Manager or partner responsible for IT in a smaller firm, they all share similar concerns:

  • Service availability – ensuring always on services especially at critical times in the accountancy calendar
  • Systems performance – meeting staff expectations for speed, accuracy, and availability
  • Data security – ensuring that all (especially GDPR related) client data, remains secure and knowing exactly where it resides
  • Data sovereignty – often UK data sovereignty is preferred but for SaaS (online) applications this is not always clear
  • Shadow IT – the use and expansion of uncontrolled SaaS applications

The continued evolution of online applications (SaaS) means that those tech savvy staff are accessing online applications that may quickly automate repetitive tasks and make their lives more efficient, however for the technologists this gives rise to concerns over securing and controlling access, data sovereignty, security, retention, backup, and recovery. These same challenges also exist for the data protection officer (Data protection officer or data protection lead) ensuring that staff are not only aware of their data management and control responsibilities but conform to the relevant legislative requirements. In addition, it should also be noted that many SaaS providers (in their small print) do not accept any responsibility for the consumer’s data making it the consumer’s responsibility to back up their data, but they often provide no method to automate this activity.

How do we address these challenges?


Improving efficiency

In the accountancy business, billable minutes (time) is literally money. Optimising your operations is key to remaining competitive in today’s economic climate. Technology should be there to enable the business, not restrict it. By using appropriate and secure cloud-based solutions, you can streamline your processes, maximise performance, and minimise the risk of downtime or systems being unavailable, resulting in improvements in the overall efficiency of your staff. For example, cloud-based systems and services can help you gather and analyse data and communicate that information to your customers in a secure manner. Documents can be tracked, reviewed, and signed electronically thus optimising your customer engagement to invoice timelines.


Enhanced collaboration

Collaboration is essential in an accountancy practice where cross-functional teams must work together to meet customer expectations and regulatory requirements. Cloud computing provides a platform for enhanced collaboration between team members, regardless of their location. By using cloud-based collaboration tools and unified communications solutions, teams can work together on projects, share files, and communicate in real-time, improving delivery speed and reducing errors.


Customer engagement

Through cloud services, as well as collaboration internally, these communication channels can be used to collect and share data with customers in a controlled and secure manner, making it simpler to conform to regulatory compliance. Where the customer is ‘tech savvy’ activities can be reviewed and digitally signed by the customer to accelerate the point at which the client can be invoiced.


Data security

Data security is always a significant concern in any industry where sensitive customer data must, by law, be protected. Our cloud solutions are supported heavily by security measures, including but not limited to next generation firewalls, intrusion detection systems, encryption, and vulnerability scanning which are all essential in the protection of sensitive data.


Flexibility and scalability

Seasonality can have a huge impact on demand for IT services in the accountancy marketplace, Tax year-end and key budgeting times in the year (depending on the markets served).  Cloud computing offers the flexibility and scalability required to respond to these changes in demand. Cloud-based solutions empower you to scale your IT resources without the need for additional investment, paying for what you consume, only when you need to consume it.


Managing legacy workloads

Many accountancy businesses have a range of legacy applications that are often deemed as “not cloud enabled”, at Daisy we have experience of reviewing, provisioning, and supporting legacy workloads in cloud environments. There is no reason to be held back from cloud adoption.


Continued evolution

With the emergence of novel applications and services in the market, it becomes crucial for technologists to play the role of enablers, embracing these innovations and promptly integrating them into the technology portfolio. This entails the ability to say “yes” to valuable additions and implementing efficient processes for seamless assimilation, thereby driving continuous growth and enhancement.

Having a proven methodology for accelerated assessment is key to containing shadow IT. At the same time, it is important to ensure any service is secure, robust and conforms to legislative requirements and that adoption is efficient and complete. Where a service does not conform to the methodology, then the process must document why it is excluded and then prohibited from the company portfolio.


Read more about our cloud solutions here.


Key themes covered: Shadow IT, legacy technology, cloud security, managing legacy workloads and data security.

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