Date posted: 21/03/2019 7 min read

Automation is transforming accounting, with or without you

The concept of workflow automation continues to be a major discussion point, but despite its capability to transform businesses, it still manages to mystify many in the accounting profession.

In Brief

  • Automation is best applied on tasks that are repetitive and transactional, relieving accountants of menial duties and low value-add tasks
  • Embedding automation or any other form of digital transformation is not an IT project or just the domain of a leader — it is a fundamental shift in business
  • Automation does not guarantee success — you need to invest in capabilities and often in culture change
  • CA Catalyst is bringing together a panel of experts in a webcast on 4 April 2019, to help you make the most of the opportunities that workflow automation presents

A robotic auditor called RON can analyse millions of transactions, relationships, and patterns in mere seconds. It then interprets the results, and flags interesting findings to the auditing team to explore. As such, it does work in mere seconds that might take an accountant months.

While RON was built by PwC, it is important to recognise that automation is not just a solution for large firms. In fact, cloud-based services provide small and medium firms with the kind of enterprise-grade computing they need to level the field with larger companies. Implemented well, it also acts as an accelerant,increasing the capacity of the business and reducing costs. Well implemented workflow automation drives performance and allows businesses to do more with less, improve productivity and perform tasks with higher accuracy and speed.

Automation also frees accountants to focus on higher-value work such as business advisory services. Research from Xero demonstrates the bottom-line impact of this and says firms that offer added value through advisory services earn 25% more revenue than firms that do not.

But if you ignore the opportunity automation provides, you run the risk of being overrun by your competitors who have already leveraged those opportunities. Simply put, those who harness automation will find themselves in a better position to focus on building stronger connections with their clients and other parts of the business centred on human interaction and input.

Resistance to automation is not new, and of course there will be barriers - but these can be overcome. You might feel like you lack the capacity and capabilities to implement automation. Or you might have legacy issues with technology or even cultural resistance to change. But this is typical of many firms, and not a show stopper if you plan effectively.

Where does automation make a difference?

Automation is best applied on tasks that are repetitive and transactional, relieving accountants of menial duties and low value-add tasks. To date, workflow automation for accountants has been applied to four areas in particular: client accounting, compliance, practice management, and advisory services.

We asked MYOB's David Weickhardt, General Manager, Products, and Xero's Head of Accounting, Sue Pak, to describe what they have learned by observing their clients closely.

In an area like client accounting, simply getting the banking platforms and the accounting software to integrate overcomes a source of frustration. Traditionally accountants have taken data from their clients' systems (usually Excel spreadsheets, Word documents, invoice books etc) and pulled it into their system, or uploaded bank information and coded that. This double counting is inefficient, error prone and clearly an area where automation promises big gains.

Likewise, in areas like compliance, there are plenty of opportunities for automation to drive efficiency gains as it represents a large portion of accountants' work.

"Compliance can take up 80% of an accountant's time - it's a massive amount of their workload and it takes them away from other tasks they would rather focus on," says Weickhardt.

"Moving to an automation tool is a major step in achieving optimum performance and managing a practice effectively. Having a tool that will let you see every one of your clients at a glance, accurately and safely replicate information across all processes and eliminating double handling, opens up opportunities for growth - or gives you more time for yourself," he says.

We are already seeing forward-thinking firms capitalise on automation to offer more human-centred services. These firms are spending more time with their clients and putting more energy into analysing data and offering useful insights, all with a view to delivering impact for their clients.

What is driving the need to automate?

At the core of it is a trend that is reflected more widely than just the accounting industry: the transformative impact of technology.

We spoke to several Chartered Accountants Australia and New Zealand (CA ANZ) members who said the competitive advantage is driving their need to automate, making them more agile and responsive. It also helps to keep cost growth in check and deliver positive returns on investment as the practice grows.

Increasing regulation - requiring more non-revenue driving activities - also encourages automation. The CA Catalyst investigation of the anti-money-laundering regime in New Zealand, for instance, identified the emergence of a new set of tools specifically aimed at easing compliance.

Your clients, like consumers everywhere,work in a world where the customer experience is core to their view of the companies they do business with.

This is an era where consumers take their best experience in any context and apply it to every context. Similarly, your clients expect things to be faster, simpler and easier, and automation is critical to this outcome.

What are the potential roadblocks?

Change, of course, comes with challenges.

Challenges with practice management are mostly tied to change, says Sue Pak. "To change a process and how you manage your practice is huge. My advice is not to underestimate the change, plan carefully, assign stakeholders for the project. Also, ensure that the team is fully informed. The team needs to be brought on the journey."

Often a partner may have been mulling over a change to systems for some time, yet the team is taken by surprise. "When we are surprised, we can feel defensive and then see the negative in every step. A good leader will set the vision, explain pros and cons, and get feedback from the team. A collaborative approach is the best approach."

While the emergence of an innovative ecosystem of developers has automated many accounting workflow practices, there are still gaps.

There is no real answer to whether you are best served by an overarching platform that does most things well, or whether you are better to take a best-of-breed approach for different services. The right solution for you depends on your particular use.

Where to begin

Embedding automation or any other form of digital transformation is not an IT project or just the domain of a leader. It is a fundamental shift in business and, while the tech-focused leader plays an important role in driving and implementing the strategy, adapting to the change falls to everyone and needs to be addressed throughout the firm. There are a number of issues to consider:

Write up detailed plans with goals and to learn from mentors;

Software and automation by themselves do not guarantee better outcomes, so try to identify a common set of success factors;

Take the time to find the solutions that fit best for you and your clients, and you must invest time to ensure they all work together.

Heather Smith, a Brisbane-based Chartered Accountant, business advisor and author, leverages a sophisticated workflow infrastructure that would be the envy of many large accounting practices. She has tied together different automation tools to help manage her business, Anise Consulting.

Smith emphasises the importance of investing time getting the automation running well.

"Once the tool's in place and if it's working properly, you almost don't even notice it's there. It should just work in the background."
Heather Smith, Chartered Accountant and Business Advisor.

Larger firms often have the benefit of dedicated technology resources. Smaller and mid-tier firms, especially fast-growth businesses, often find the best way to make it happen is for one partner, often with a personal interest or background in the area, to take the lead.

Other accounting practices find benefit in working with technology partners who understand the customer adoption journey and who have dedicated success managers who help them through the process.

As with all business transformation, it is critical to identify and overcome points of resistance. Recognising that opposition to change is often based on organisational culture or personal issues, rather than technical or process-driven. For instance, some partners may not wish to disrupt a business that seems to be running well — especially if they are looking to exit that business for retirement or other reasons. In such a case it is best to describe how automation increases the value of the businesses as an asset, a clear benefit to them when they are looking to cash out.

Keeping the communication lines open and clearly explaining the reasons for change as well as the impact on stakeholders is key.

On 4 April, CA Catalyst is bringing together a panel of experts to explore the issues raised in this article and to help you make the most of the opportunities that workflow automation presents.

Workflow Automation Webcast - 4 April 2019

Register for a webcast designed to help members understand what workflow automation is, how it can benefit them, understand the risks and how to implement solutions.

Register Now

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