# Financial digital transformation: An opportunity, not a threat
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-09-28
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: The Future of Accounting: Embracing Digital Transformation
Meta Description: Discover how cloud computing, blockchain, automated accounting technology, AI, and ML are revolutionising the finance sector in the UK.
URL: https://financedigest.com/financial-digital-transformation-an-opportunity-not-a-threathtml

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_By_ **_Simon Kearsley,_** _CEO of_ [_bluQube_](https://www.bluqube.co.uk/)

Industry across the country and globally is going through a fourth industrial revolution, and accounting and finance are no different. With HMRC’s Making Tax Digital reforms and a continued focus on becoming one of the world’s most digitally advanced administrations, digital transformation is well and truly in motion in the UK finance sector. As a result, there is increasing pressure on business owners to stay ahead of the curve as accounting moves towards a digital-first approach.

There is a misconception that accounting as a sector will [face death by digital](https://www.financedigest.com/3-top-digital-asset-threats-facing-your-brand-in-2017.html "3 top digital asset threats facing your brand in 2017"), but in reality, technology is an opportunity, not a threat. Software has the ability to leverage technology to make accounting processes simpler for [business owners and finance](https://www.financedigest.com/1-in-3-uk-businesses-looking-for-finance-are-finding-it-harder-to-get-a-loan.html "1 in 3 UK businesses looking for finance are finding it harder to get a loan") professionals; for example, cloud-based data management, interoperable systems and improved analytics.

**What technology can be used in accounting?**

[_Cloud computing_](https://www.financedigest.com/enterprise-training-and-the-future-of-cloud-computing.html "Enterprise Training and the Future of Cloud Computing")

One of the most noticeable shifts in accounting is a move towards [cloud computing technology](https://www.financedigest.com/7-ways-cloud-technology-can-transform-business-finances.html "7 ways cloud technology can transform business finances"), which is where data is stored and accessed online, rather than on-premise. This gives a free flow of information, regardless of the accessing device, and means that employees within the business can collaborate and exchange information more easily. As hybrid working is now taking a much more prevalent place in business, [cloud computing offers](https://www.financedigest.com/how-hybrid-cloud-computing-offers-the-best-of-all-worlds.html "How hybrid cloud computing offers the best of all worlds") real benefits to colleagues who work remotely as they can access the software from wherever they are working.

[Cloud computing is well established in accounting](https://www.financedigest.com/reckon-one-builds-momentum-with-strong-backing-from-accountants-joining-the-cloud-advisor-programme.html "Reckon One builds momentum with strong backing from accountants joining the Cloud Advisor Programme") and is embedded into a range of accounting software. It allows finance [jobs to be easily undertaken by more than one person and provides a safe storage place for all data](https://www.financedigest.com/stocks-sag-as-hawkish-fed-cools-china-rally-awaits-us-jobs-data.html "Stocks sag as hawkish Fed cools China rally; awaits US jobs data") that won’t be lost by an accidental hard drive wipe. Interoperable systems allow information to be shared so that data does not need to be constantly rekeyed, which is time consuming and may lead to mistakes that later need unpicking, and have the added [benefit of giving business owners full sight of their accounts in collaboration](https://www.financedigest.com/5-ways-cfo-and-cio-collaboration-can-benefit-the-business.html "5 Ways CFO and CIO collaboration can benefit the business") with any relevant colleagues or external accountants.

_Blockchain and automated accounting technology_

Technologies that are still emerging within [finance are blockchain and automated](https://www.financedigest.com/why-do-modern-finance-functions-strive-for-automation.html "WHY DO MODERN FINANCE FUNCTIONS STRIVE FOR AUTOMATION?") accounting technology. Blockchain is an encrypted data logbook that allows companies to use common data retention infrastructure, meaning both sides of every transaction, buyer and seller, are [recorded in a shared](https://www.financedigest.com/nintendo-shares-jump-5-on-record-splatoon-launch.html "Nintendo shares jump 5% on record ‘Splatoon’ launch") ledger to minimise inefficient and time-consuming procedures that may lead to discrepancies. Automated accounting will make life much easier for [business](https://www.financedigest.com/making-your-accountant-an-invaluable-asset-to-your-business.html "MAKING YOUR ACCOUNTANT AN INVALUABLE ASSET TO YOUR BUSINESS") owners and accountants, with less time being spent on manual entry and the space for human error being minimised. As a result, time is freed up to spend on other areas of the business, which can support overall profitability.

_[Artificial intelligence](https://www.financedigest.com/types-of-artificial-intelligence.html "Artificial intelligence") and machine learning_

Recent years have seen a rapid acceleration in the pace of disruptive technologies such as artificial intelligence (AI) and machine learning (ML) in [Finance due to improved](https://www.financedigest.com/5-ways-to-improve-your-business-finances.html "5 Ways to Improve Your Business Finances") software and hardware. The [finance sector has seen a steep rise](https://www.financedigest.com/make-way-for-the-rise-of-the-finance-super-apps-consolidation-of-financial-digitisation-tools-platforms.html "Make way for the rise of the Finance Super Apps – Consolidation of Financial Digitisation Tools & Platforms") in the use cases of machine learning applications to advance better outcomes for both consumers and businesses.

AI can conduct rudimentary tasks and ML can pick up on errors that would otherwise be complicated to resolve. Using AI and ML in tandem with one another will reduce time spent on arduous, repetitive jobs, such as payroll.

_Optical character recognition technology_

Optical character recognition (OCR) technology is increasingly being embedded into accounting software. It allows for handwritten and scan printed documents to be converted into machine-readable text that can be copied or edited as necessary. Integration with accounting software allows [business owners and accountants to cut](https://www.financedigest.com/lighting-maker-signify-cuts-2022-outlook-again-on-china-business-lighting.html "Lighting maker Signify cuts 2022 outlook again on China, business lighting") down on unnecessary paper clutter and makes documents much easier to access.

**What are the benefits of** [finance digital transformation?](https://www.financedigest.com/digital-transformation-for-the-world-of-finance-the-rise-in-collaboration-tools-and-saas-applications.html "Digital transformation for the world of finance: The rise in collaboration tools and SaaS applications ")

Successfully implementing technology into business accounting processes brings a wealth of benefits which ultimately lead to firms [saving time and money](https://www.financedigest.com/how-to-save-money-for-a-car.html "How to save money for a car"). [Operations within the business will become more streamlined so that employees and owners](https://www.financedigest.com/ikea-stores-owner-ingkas-annual-operating-profit-rises-9.html "IKEA stores owner Ingka’s annual operating profit rises 9%") can focus their time on developing and growing the business. This will lead to increased sales, better relationships with customers and suppliers, and improved, data-informed decision making.

With mandatory [Making Tax Digital](https://www.bluqube.co.uk/mtd1) for all VAT registered firms coming into action next year, business owners who fail to acquaint themselves with digital record-keeping ahead of time may find themselves facing penalty fines. The new legislation shows a clear shift on a nationwide scale [towards digital](https://www.financedigest.com/the-journey-towards-a-digital-bank-five-major-stages-to-successful-banking-digitalisation.html "THE JOURNEY TOWARDS A DIGITAL BANK – FIVE MAJOR STAGES TO SUCCESSFUL BANKING DIGITALISATION") processes. [Business owners that do not embrace it may find they are left behind as competitors become more digital](https://www.financedigest.com/3-reasons-why-businesses-get-stuck-at-the-starting-gate-of-digital-transformation.html "3 Reasons Why Businesses Get Stuck At The Starting Gate Of Digital Transformation") and efficient.

[Digital transformation](https://www.financedigest.com/world-class-finance-digital-transformation-and-analytics-based-decision-making-among-key-imperatives-for-creating-finance-agility.html "World-Class Finance: Digital Transformation and Analytics-Based Decision Making Among Key Imperatives for Creating Finance Agility") can improve processes across the whole business. Skeptical business owners can [test the waters with accounting technology](https://www.financedigest.com/ai-created-images-lose-u-s-copyrights-in-test-for-new-technology.html "AI-created images lose U.S. copyrights in test for new technology") and analyse the results to see how it is impacting the business. This could be the first step on a wide-scale [digital transformation](https://www.financedigest.com/5-key-takeaways-from-the-finance-sectors-digital-transformation-revolution.html "5 Key Takeaways From the Finance Sector’s Digital Transformation Revolution") journey that demonstrates the benefits of technology and opens minds to implementation throughout the business.

**Choosing the right software**

The [finance technology sector has been growing for several years](https://www.financedigest.com/2019-year-must-re-build-public-trust-finance.html "2019 is the year we must re-build public trust in finance"), so there is a huge number of accounting software options available on the market. Business leaders should work with all departments of their business to define the specifications necessary for the company’s unique needs. This will ensure a streamlined process post implementation and businesses should demo a number of offerings to decipher the features that best cater to the company.

Some key elements that business owners will want in their [software are fixed costs](https://www.financedigest.com/how-much-does-cloud-based-financial-software-cost.html "How Much Does Cloud-based Financial Software Cost?") and a strong and reliable support system.

Business owners are all too often stung by hidden costs in their software. Some providers will offer cheap prices, only to recoup the costs in long, expensive implementations. Before committing to a provider, ensure you have a full and transparent quote to avoid a large, surprise bill at a later date.

Software can’t always be perfect and on occasions, things do go wrong. Using a provider with reliable customer [service support and expert accountants on hand](https://www.financedigest.com/why-a-rules-management-system-can-untie-financial-services-hands.html "Why a rules management system can untie financial services’ hands") to help will mean any issues can be ironed out quickly, without too much disruption. A real, [human touch](https://www.financedigest.com/putting-the-human-touch-back-into-banking-magazine.html "“Putting the human touch back into banking”-Magazine") from your software provider will go a long way in keeping everything running smoothly as your business adopts digital transformation.

To find out more about how bluQube can help to take the hassle out of business finances or to book a demo, visit [https://www.bluqube.co.uk/](https://www.bluqube.co.uk/).


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