When looking at how to solve these problems with accountants, there can be some hesitance in moving away from their usual way of doing things and putting their trust in accounting automation to streamline time-consuming accounting processes.
As leaders in software for accountants, we work with accounting practices, both large and small, showing them how implementing new accounting practice management software that uses accounting automation provides numerous efficiency gains and cuts out needless administration.
In this article, we will give you the low-down on accounting automation and how embracing automation can lead to more free time away from tedious tasks to take on more exciting work that will drive the accounting profession forward.
What is accounting automation?
Across all industries, the modern workplace is evolving and the accounting industry is no different.
Automation in accounting is eliminating the traditional roadblocks and operational inefficiencies accounting professionals had previously been experiencing. Automated accounting software is streamlining bookkeeping and accounting workflows and boosting their bottom line.
Accounting practices must recognise their deficiencies to choose accounting practice management software that employs accounting automation to improve their accounting jobs and reduce human error caused by manual processes.
The right automated accounting software can elevate any accounting practice to a market-leading position – even those without the resources and workforce of larger firms.
Accounting automation software can handle repetitive manual tasks, thus leaving room for accounting firm employees to focus on their own professional development.
Accounting automation tools are particularly essential as we transition into a new era of work – one where remote and flexible working arrangements become the norm rather than the exception, and workflow needs new solutions to manage a geographically diverse workforce.
However, with such a wide variety of accounting automation systems on the market for practices to choose from, there is a need for thorough due diligence on the part of the practice itself.
Accounting practice leaders must take stock of their day-to-day accounting operations and examine what is currently not working for them.
Where are the bottlenecks in accounting processes? Which jobs are not delivering an adequate return on investment?
Is every team member managing their daily tasks in the most streamlined way possible?
If the answer to any of these questions is no, then you need accounting automation through an accounting practice management software solution to help you practice.
To learn more about practice management software and why it is essential to your practice, read our article for more guidance: Why do you need accounting practice management software?
How is automation used in accounting?
Australian accounting practices are already employing accounting software to automate various accounting services and processes.
Accounting automation helps by streamlining workflows and eliminating the manual work required to communicate with clients.
Here are just a few ways accounting automation is currently hand-in-hand within accounting software:
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Online calendar and appointments
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Text message reminders
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General ledger
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Marketing automation
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Automating workflows
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Invoicing and billing
What are automated accounting processes?
Accounting process automation is where accounting automation tools are used to streamline practice functions that may be considered necessary but repetitive tasks.
The best practice for accounting process automation is where they are standardised across your entire firm, considered time-consuming, and consistently repeated.
This section contains a few benefits and tips for using accounting automation in modern day accounting firms.
Collecting client documentation
It can be time-consuming to keep reminding busy clients to provide documents you will need to advance in their job.
By automating manual accounting processes, you'll free yourself of hours spent tracking invoices or receipts or drafting emails, giving you time back in your day to focus on more strategic and high-value work, which is all-important for accountants during the busy tax planning season.
Streamlining manual accounting tasks
The very nature of accounting firms means data entry is an ongoing administrative task that every practice must face. Data entry also leaves the door open for costly human error, which accounting automation can help avoid.
Updates to practice management workflows
Accounting automation can help with assigning or reassigning tasks, sending notifications for team members to alert them that they have something ready to start or review, updating the statuses of workflows, and setting up recurring jobs.
Sending client reminders
Using accounting automation to send reminders for upcoming deadlines in busy periods of the year, such as tax planning season, means that accounting software can help you avoid consistently chasing up late clients for their bank statements or expense reports.
The benefits of accounting automation for time-poor practices
Time is a precious resource within any accounting practice. But with the need to collate, organise and process large amounts of data as part of your daily workflows, many practices find that they are spending much of their time on low-level, time-consuming tasks.
Moving forward with accounting automation tools can help your accounting practice to overcome the challenge of manual data entry.
Accounting practice automation can create untapped capacity so you can take on more work, improve the operational efficiency of existing jobs at a reduced cost, realise immediate time savings and increase profitability.
Improving workflow management with accounting automation
It’s not just practice leaders who want change. Employees in accounting teams want the tools to help them work better.
In this section, we will explain how workflow software uses accounting automation to do this in numerous ways.
Consolidating task management
Jobs and tasks are easier for accountants within a single hub rather than spread across multiple systems. Individuals, teams and the entire practice can see their most pressing tasks in real-time and check them off on the same accounting system. Managers also have complete oversight without needing to physically ‘check in’ on their accounting teams.
Global connectivity
Rather than strictly office-based management practices, a workflow management software solution means staff can access what they need anywhere, anytime, meaning that it is much easier to support clients on the go. The use of software of this kind empowers staff to complete their accounting tasks wherever it is most comfortable for them, which, thanks to the advent of flexible working arrangements, doesn’t have to mean the office anymore.
Job allocation
In a busy office environment, priorities can change without warning. With accounting automation, managers have internal controls to allocate high-priority jobs and change tasks based on a client’s needs in real time.
Fiscal responsibility
By using a simple format within a single accounting practice software solution with cloud access, accounting teams can track their budget against transactions with clear, real-time updates.
To read more about workflows for accountants, check out our blog: what is a workflow for accounting firms?
Automating your accounting practice data
Accounting practices are in an enviable position in that they have access to an incredible amount of data to support their future endeavours. But beyond the insights and visualisation opportunities of data, accounting automation can help practices deliver the right information, to the right people, in the right format, at the right time.
At its most basic level, accounting automation reduces the chance for things to go wrong. Within the most appropriate data governance framework – which is essential for practices that deal with large amounts of disparate data, automation is key to delivering the building blocks for more predictive or prescriptive analysis.
Solutions that can automatically parse big data and support more insightful data are now a reality and the opportunities created by automated data delivery are vast:
- Intelligent automation systems can analyse data that is both difficult and time-consuming for humans
to analyse. - Automating these data and analytics tasks means you can free up your team to focus on more important, client-focused jobs – saving time and resources.
- Instead of data scientists using their entire days analysing a business’s ever-growing pool of big data, automation frees them up to generate new insights to improve decision-making.
Accounting and automation, when used within the right data management and analytics platform, can help your accounting practice to streamline your financial data collection and management.
There are many ways accounting practice automation will enhance your client data:
Accounting automation can help you work smarter and faster
Automating how accounting data is stored, analysed, visualised and delivered means your people get data-driven insights faster. Your team can then use that data to make smarter, more timely decisions, without the arduous people hours involved in traditional, non-automated data analysis.
Standardising your jobs through accounting software
Irrespective of your client's accounting application, you can access their data points quickly and easily to analyse their financial statements, then seamlessly transfer closing balances in their general ledger accounts to prepare and lodge their tax returns. And you can avoid having to open different accounting applications to progress your jobs.
Accounting automation will inform you instantly
Automated alerts mean you and your staff will stay current on critical events that take place in your busy clients' businesses. For instance, you can receive alerts for regulatory compliance breaches or variations in operational performance. You can easily configure the systems to alert you on a client’s accounts payable, such as where their bank accounts or bank statements are indicating that their financial activities need to be better organised, or the practice has jobs passed their due-by date.
Accounting automation can help achieve a higher standard of consistency
Having all your client data accessible in one data warehouse application and a connected accounts preparation solution will empower you to generate consistency when using general ledger software to produce a financial report from the data of your business clients.
You can provide better business advisory services
With all your client data consolidated, you can easily access, view, and analyse the financial information of your business clients during basic bookkeeping. Viewing this financial data can help you to provide value-added advice about their overall finances and cashflow, such as their accounts receivable or accounts payable.
Data quality is also improved through customisable reports and powerful data visualisation, which allow you to quickly and easily monitor key business metrics and identify trends.
Automating your client management
A key accounting automation tool is client management software for accounting practices, more commonly known as client relationship management (or CRM for short). Paired with a secure client portal, you've just created the secret sauce that will elevate your client engagement to a new level.
A cloud-based CRM helps every practice, regardless of whether it is a large accounting firm or small business, to get that competitive edge. With all your client information stored in one place and automated financial processes, you’ll never miss a deadline again.
Client relationship management software ensures all client information that is needed in one place. Accounting automation helps elevate this accounting software, making conversations with clients current and meaningful.
Here are a few examples of how client management software employs accounting automation.
Simplifying your client communications
You can automate client communications with everything in one place. Setting up happy birthday text messages becomes an easy automated accounting process, as do alerts for an upcoming job deadline.
Enhancing your workflow efficiency
By automating task management within your practice, there’s no need for manual status updates. If an accounting staff member completes a task as part of a job, a notification is sent to the next team member to advise them they can start their part of the job.
Filing the paperwork in the right places
With dedicated accounting automation solutions, you will be able to generate quotes and engagement letters that, after the client signs, are automatically linked to job assignments and invoicing.
The impact of automation on accounting professionals
The ubiquity of accounting automation tools in the mainstream market makes for an exciting time for all finance professionals, including accountants in public practice.
Advancing technology and a diversity of accounting automation solutions are driving down the cost of this valuable software, and the predicted benefits include everything from an uplift in profit margins to a drastic increase in productivity.
Recently, McKinsey & Company conducted a deep-dive investigation into the automation opportunities in Australia, revealing the immediate and long-term effects on the national economy.
From machine learning and artificial intelligence to advanced robotics and workflow automation tools, the research firm explored the “enormous opportunity to restore momentum to the Australian economy and extend its 30-year boom in an inclusive way”.
The next decade will be of particular importance, according to findings from the Association of Chartered Certified Accountants. Of the C-suite executives and professional accountants who participated in the survey, more than half (55%) “expect the development of intelligent automated accounting systems to have the greatest impact over the next three to 10 years”.
The study highlighted a number of other factors influencing business and accounting processes, such as:
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Rate of change and economic volatility (55%)
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Adoption of cloud computing by business (41%)
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Greater harmonisation of accounting and business standards (42%)
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Different aspirations and expectations of coming generations (39%)
By the end of the 2020s, automation will be well and truly a staple of our work lives, no matter what industry.
Automation technology not only allows business finance departments to be more efficient, but it also provides customers and clients with better outcomes because staff are more engaged.
This is driven by automation taking over up to 46% of current work activities, according to McKinsey's research.
That leaves more time for employees to support their clients while also making them more productive and boosting economic growth.
In fact, if the majority of Australian businesses seize this opportunity, McKinsey believes it could add $4 trillion to the economy by 2030.
Will accounting process automation replace accountants?
Detractors of accounting automation claim, rightly, that the technology will impact other industries, with some professions likely to be phased out of a job.
While that’s true, with automatable jobs like mechanics, legal researchers and radiologists likely to be impacted first, automation will lead to the creation of new jobs, with the financial benefits contributing more to health spending and infrastructure investment. There will also be a higher need for creative and interactive jobs, such as nurses and salespeople.
Yes, some jobs will be lost. But the more important revelation is that jobs will change, and that sentiment remains true when we talk about this kind of accounting system.
According to McKinsey: People at work will spend over 60% more time using technological skills and over 40% more time using social and emotional skills.
This is good news for accountants looking for areas in which to invest their continued learning and development each year. Accountants, and by and large, all workers, should think about ways to develop a mix of skills rather than the ability to handle repetitive tasks that may be replaced by ongoing breakthroughs in accounting automation.
For more information on learning and development for accountants, read our blog: The best free CPD resources for accountants.
Leveraging machine learning and artificial intelligence in accounting
There is no getting away from the fact that artificial intelligence in accounting is what will help our industry to evolve.
Robotic process automation (RPA) is a type of business process automation technology, which is based on artificial intelligence. When applied to accounting automation, it can help replace manual processes that are considered to be both sophisticated and mundane.
Far from being the technology that replaces accountants, robotic process automation (RPA) is providing practices with the potential to do more with the resources that they have.
Other levels of accounting automation include predictive analytics, which improves data quality by providing a firm’s accounting and finance teams with real-time insights to make informed, proactive decisions about their clients' accounts.
For more information on how we apply artificial intelligence in accounting, check out our blog: How can accountants harness artificial intelligence?
For a guide on ChatGPT accounting applications within your practice, read: How can ChatGPT be used by accounting firms?
The importance of cloud accounting in accounting automation
Just as flexible working arrangements help accounting practices to enjoy a greater work-life balance, so too is automation of business processes putting trust back into teams.
Whether you are a small local practice or a large firm spread across the country, businesses want cloud-based accounting practice software solutions that are adaptable and easy to use while on the go.
Not only are more and more employees taking up flexible and remote-working opportunities, but companies are overcoming the talent shortage by seeking out staff in different cities. It’s also a core strategy for retaining the best employees – with 80% of Australians saying they would stay longer in their role if offered teleworking.
The digital revolution means many businesses can function entirely online, and leaders want tools that make collaboration a breeze and mitigate human error. The right accounting practice management software does exactly that.
Thanks to accounting automation software, geographical barriers are non-existent, and new users can be added if there’s a need for outsourcing or offshoring accounting tasks.
Managers want their teams to be able to log in and run with things as they would in the office – and with accounting automation, it means they can do it anywhere in the world at any time.
We take a deeper look at the undeniable benefits of the cloud in the following guide: A guide to cloud practice management software.
Read more on the digital workplace for accountants here: Digital transformation in accounting.
Overcoming common accountant pain points with accounting automation
Accounting process automation can help accountants to overcome repetitive tasks, but there is so much more to this technology for accountants than meets the eye.
Accounting automation creates more freedom for accounting practice staff to focus on delivering work that will add real value to clients.
A light touch solution
Accountants want to reap the full benefits of accounting automation, replicating and scaling work without needing to be a “gatekeeper” to manage everything. Accounting practice management software that employs accounting automation will allow them to complete their accounting tasks without interruptions or technical roadblocks.
Effective management of remote team members
Employing an accounting automation workflow helps to streamline processes, reducing the need for regular meetings and status updates for manual accounting processes.
Improving client relationships
By streamlining day-to-day operations with accounting automation, practices can see positive changes to their customer experience by spending less time on repetitive accounting tasks and more time on value-add services for their clients.
Improving customer experience with accounting automation
Start talking accounting automation tools, and practice owners would be forgiven for assuming that means replacing its people. However, accounting automation doesn’t make jobs redundant.
Accounting automation makes for easier bookkeeping and accounting work, with more efficiency, by the reduction of human error. Automated accounting gives people back time and improves the experience for both the accounting team and the client.
And you know this. How do we know you know this? Because you told us.
Over 600 respondents to our 2022 Empowering practices through client information survey told us just 39 per cent of Australian practices use client portals, allowing their clients to view, update or action documents. And yet, 87 per cent of those actively using a client portal – and 59 per cent who don’t – said they enhanced the client experience.
This means there are 59 per cent of Australian accountants who don’t even use a client portal with accounting automation will admit it improves the client experience.
By incorporating accounting automation into your everyday business, you’re not compromising client service. You’re doing the opposite.
An automated accounting system helps to handle the more tedious tasks associated with traditional bookkeeping and accounting. This leaves you and your team time to focus on what really matters – personalised client service.
When you’re not hunched over your desk waiting for the documents you need to progress to the next stage, accounting automation can help you build client relationships or review their accounts payable and accounts receivable to make their business run more efficiently and set it up for growth.
The future of accounting is automated – are you ready?
In an age where hyper-connectivity is the norm and practices are looking beyond their traditional borders for top talent, the need for accounting automation solutions is more critical for your practice than ever.
However, before adopting new accounting systems and overhauling your entire business model, it’s important to do your due diligence and uncover your practice’s biggest pain points.
Once those are understood, you can seek out an accounting automation tool, such as accounting practice management software, that meets your practice’s specific needs and helps empower your staff through the power of the automated workflow.
We hope this article has illustrated how automated accounting technology will play a vital role in disrupting financial professionals and the wider economy over the next decade.
If you are ready to meet your competition head-on and leverage the power of accounting automation, why not talk to one of our specialists today. We’ll work directly with you to find out what your practice needs to thrive and then curate a solution that elevates your entire practice.
Download our eBook, An Accountant’s Guide to Smart Automation, and you’ll learn how accounting automation can streamline your workflows and save valuable time and increase the overall efficiency of your accounting practice.