How is Software Used in Finance and Accounting?
The finance and accounting world are connected due to both of their industries working together in many ways.
00:08 20 November 2020
You really can’t have finance without accounting, and vice versa. So, it is reasonable to expect that their technology is closely related, and it is no surprise that huge industries like finance and accounting are innovating with software and new technology.
But you may be wondering how software can help these two industries? Well, I have broken down both so that you can see how software is disrupting both industries and making an impact.
Software in Accounting
In the old days, accountants were working diligently with a calculator, pencil, and paper. Thanks to new innovation, accountants can do much of their work from a computer and it is not nearly as tedious.
Software like QuickBooks help accountants keep their records clean and accessible at all times. QuickBooks is one of the most popular things that an accountant works with on a daily basis, and it provides a lot of benefits.
Mainly, it eliminates any math errors that an accountant would normally make when they are plugging away all day on a calculator. QuickBooks does all of your addition and subtraction for you, so the only way to have an error is to enter data incorrectly.
Also, QuickBooks can easily present information in a readable way with just a few clicks, so it saves a lot of time. Firms are saving a lot of money because they are not paying labor hours for an accountant to do all of this work by hand and make their own financial statements manually.
Software in Finance
While there are a few types of software that are making an impact in finance, I would like to point out investment management software. Finance and the world of investing used to be a pretty scary topic for people outside of the industry, but nowadays it really isn’t.
The reason for that is because there is software that can manage your portfolio and do just as good and if not better than a financial advisor. Even some financial advisors use an investment management software of some kind to make their trades and invest accordingly.
With artificial intelligence, the investing world is noticing that we can program a trader that can manage risk and perform pretty well in the markets. A software can run a lot more math in a much faster manner to calculate standard deviation, risk, and the beta of a portfolio.
It will be interesting to see how much more the investing world changes because of the emergence of software and artificial intelligence that can outperform even some of the best traders in the world.
Those are just a few of the major advancements with software in the finance and accounting world. It will be very interesting to see how many more advancements happen in the next decade or so. If you found this post interesting, then please share it with a friend!