Accounting technology background
General-purpose accounting software hasn’t changed significantly in a long time. I discuss that a bit more in the intro to a separate article, Accounting Automation and the Impending Crypto Tornado. The main idea is that cloud computing is the biggest thing to happen to general-purpose accounting software since it initially came to market over 40 years ago, but it really didn’t change the underlying structure. Plus, a lot has changed since the first cloud accounting software companies were started in the late 1990’s.
“industry-specific software applications have emerged as the primary business management systems for many companies, the one piece of software every employee touches multiple times a day.”
No longer just general ledger software
Using the cloud technology available today has many benefits that weren’t available 20 years ago. Cloud native architecture allows for seamless integrations with other cloud applications, with flexibility and scalability that were much more difficult to achieve previously.
Maybe even more importantly, the cost of building and supporting a software company has plummeted over the past 20 years. As a result, industry-specific software applications have emerged as the primary business management systems for many companies, the one piece of software every employee touches multiple times a day.
This specialization allows many processes that were previously jammed into a one-size-fits-all system, to run seamlessly with minimal or no input needed by accountants. Companies can choose the software that’s right for them for a whole suite of needs that are core to their business, then seamlessly link that application’s modern APIs to a lightweight general ledger. It isn’t a perfect solution, some holes will inevitably remain, but it’s a promising step forward.
Further, the specialization of software by industry allows data to be standardized for easier analysis, including machine learning and more advanced automation. So this should only continue to improve over time, allowing accountants to spend more time refining and analyzing results.