Automation’s arrival to accounting has been somewhat of a slow-burner. But there’s no denying that it has arrived. Does that mean every accounting and bookkeeping firm is using automation to its full potential, if at all? Not quite. But, in the last few years, the majority of firms now realise and see opportunity. In fact, 43% believe technology would make being an accountant easier.* It would appear this is the industry’s lightbulb moment.
In this article, I’ll be looking at why 2023 is the year of accounting automation – and how we, as an industry, can help to ensure it delivers. From early scepticism to widespread adoption, accounting tech has come a long way. And, while this is by no means the finish line, the industry should take stock of the journey so far, before looking ahead at what’s to come.
From doubters to believers
Change always tends to cause a stir, especially when it’s said to replace you. In 2014, it was estimated that 47% of job categories were susceptible to automation within two decades. Accountants and auditors were second highest on the list of those at risk. This, and rightfully so, put many accountants and bookkeepers on edge.
But, ten years on, reality tells a different story. It’s clear that, at this moment in time, automation will only replace – or support – accountants and bookkeepers in the tasks most prefer not to do anyway. Think of things like chasing clients for paperwork, manual data entry, and checking that data for mistakes and errors. Alongside Dext, the number of tools available to support these types of functions suggests there is an appetite for automation, as opposed to the scepticism early on.
Concerns around technology having an adverse impact on recruitment have also quietened in recent years. In 2016, reports suggested that artificial intelligence was set to replace the work traditionally done by fresh graduates. Again, the current state of play paints a different picture, with technology actually boosting a firm’s chances of recruiting young talent. Those that embrace technology show a willingness to evolve and move with the times; that in itself is a huge tick for job-hunting graduates.
When you look back at those early concerns and setbacks, it’s impressive how far our industry has come in its acceptance of technology. Today, as we look towards a new stage in that progression, the question is: why now?
First off, data is now a far more valuable resource than ever before. There will always be a need for “number-crunching” in accounting and bookkeeping. What’s more apparent now, though, is the value that data provides. Data insights, analysis and trends are key to driving a firm’s performance, not only for your clients but internally, too.
Firms now recognise that. And, while most accountants and bookkeepers are capable of spotting those patterns themselves, it’s far more efficient to lean on technology and automation tools.
Accounting automation’s arrival is also a product of the circumstances we find ourselves in. The Covid-19 pandemic only heightened the need for data-centric advice from accountants. Now, as we enter a cost-of-living crisis, businesses will likely turn to those same people to help them navigate the situation. It’s why 48% of accountants have already said they feel more valued as a result of these tough times.*
The benefits of accounting automation
While most are familiar with the benefits of accounting automation, I thought it might be worth outlining the key benefits to those that are not. These are a select handful of the things you can achieve when you automate accounting, and there’s plenty more to come.
Whether you’re chasing clients for paperwork, analysing transactional data, or advising clients on their next business move, technology is there to help speed up proceedings. It is the time-saving assistant.
Higher levels of productivity
This links to the idea of saving time. Thanks to accounting automation, you’re able to spend less time on routine tasks. As a result, you can then redirect that attention, energy and time to more value-adding activities. It’s a case of getting more done in less time.
Show clients you’re digitally ambitious
Changes to consumer behaviour have forced businesses to adapt how they operate. An example of this is point-of-sale systems that we now pay through when in store. And the same goes for accounting firms. As businesses become more digitally adept, it’s likely they’ll look to firms who show that same level of adaptability.
With so much of accounting and bookkeeping revolving around data, errors are inevitable. While these are innocent mistakes, they can be costly. Accounting technology reduces the likelihood of these mistakes happening. Without the need to enter data manually, and with automated data checks, you add another layer of accuracy to your data management process.
The days of ordinary data are behind us. With actionable data, you can assess a client’s business activity, benchmark insights, and even leverage it to incentivise teams at your own firm. As clients continue to turn to their accountants and bookkeepers for business advice, those able to do more with their data are sure to stand out.
Stronger client relationships
Think of it like this: with automation, you save time; you can also get more done in less time, enabling you to focus more on advising your clients. Back that up with accurate, actionable data and you’re now an invaluable asset to your client’s business. This will only strengthen your working relationship. It may also justify any increases you make to their pricing plan.
While understanding, exposure and appetite for accounting technology may be at an all-time high, there is still work to be done around its implementation. This is the next step – and for many it may feel like a big one. In fact, nearly 30% of accountants and bookkeepers say they don’t have the tools to automate accounting processes*.
This may come as a surprise, considering the general awareness around automation and the tools available. But it’s so often the implementation and application of these tools where firms get stuck. In the past, building your own accounting tech stack was a complicated and costly addition, exclusive to those who could afford it. Fast forward to now, and the picture is again very different.
There are hundreds of automation tools, many of which are either free or inexpensive. They’re also easy to adopt and use. And the fact that these connect and work together in some capacity makes the entire process much less of an ordeal.
The challenge now is for software providers, like Dext, to support accountants, bookkeepers, and their clients, with this next step. What’s great is that we, as an industry, have already come so far. Where we were, versus where we are today is a journey in itself. What comes next is the exciting part.
*The statistics in this article have been taken from a Dext survey, consisting of three-hundred accountants and bookkeepers answering questions on the past, present and future of accountancy