Taking Advantage of Automation in Accounting

In this article, Right Networks' Director of Firm Technology, Roman Kepczyk, CPA answers pointed questions from firms who have struggled with getting started with, and spending on, the automation of accounting and other functions, as well as what it brings to their businesses.

Q: I’ve become more aware lately that our firm is falling behind when it comes to customer service. A lot of our client onboarding and interactions are still paper-based or not digital. I am looking for best practice advice on what the most important first steps are to take.

Roman: The first step is to step back and take a look at the information you are providing the clients, and the information that you could be providing those clients. When you talk about automation, a lot of it has to do with transformation of processes; old school processes that you’ve had in the past that worked in different ways.

The reality, today, is that a lot of these older tools have been superseded by new tools that are faster, more efficient and better integrated into the business information system. When we talk about business transformation, we have to first talk about the information that is needed to make decisions.

So, the first thing to take a look at, with your clients, is the things that are absolutely working that create efficiency. A simple example is a lot of firms have accounting systems that are on premises, and the reality is with those systems, only one person can work on that accounting product at a time. If the CPA wants to work on it with the client, it’s pretty hard because a lot of the data has to be transferred back and forth.

By having the client data available online, both of you can look at the same information at the same time. That also opens the doors to start integrating applications that are standard today. Say you have a client that writes 50 or more checks per month, one of the easiest automations that can transform their business is literally going to automate their payables. Bill.com is a perfect example of that [kind of tool].

When I go in and do a consulting engagement with a firm’s administrative department, we actually track through the payable system from the inception of the invoice inside the firm all the way to the payment and, importantly, the filing at the back end. In many firms, this is a highly manual process. So, by virtue of using a tool like a Bill.com, all of that can be automated including the due-date tracking process, the payment process and the verification process which is particularly critical if you have to have two people verify an item. Once you go through a process like that, you can see the transformation it can make and how it can save 10s even hundreds of hours both internally and for your clients.

Q: I’ve been pushing to modernize our somewhat old-fashioned firm, but the management is obsessed with how much it will cost. Is there anything to help establish or measure cost of ownership?

Roman: There are some general statistics out there that talk about the average cost-per-person for technology, but a lot of those include administrative costs and others that are not truly quantified. It’s not easy to say that there’s a fixed percentage or dollar amount to spend.

For instance, if you had a percentage of spend of a firm in Iowa versus one in the San Francisco Bay area, the revenue numbers would be way off so maybe that’s not such a good indicator. What you really need to take a look at is if you are able to serve your clients effectively and what is the value of your practice afterwards that’s out there.

Ultimately, there are no clear calculators or tools that fit all firms in all situations, just because of the way people track technology. The cost of someone that’s in the cloud, for instance, is a fixed cost for the technology versus someone who builds and maintains their own network and has huge capital outlays and, of course, maintenance costs on top of that.

The more important part is if you are able to produce well for your clients. We have found that for firms that traditionally have under spent on technology overall have also underspent on their training.

The reality is you need to make sure that when you invest in tools you invest well in the technology and the training to make sure your people know how to use it. I often hear from firm partners that say “what if I train these employees on these systems and then they leave?” Well, here’s another thought, “what if you don’t train them and they stay?”

That’s the scenario we see in some of these resistant firms. They have people that don’t have the skills to move the firm forward and the firm’s not promoting them learning new skills. So, if you are in that type of firm it’s very important that you actually promote training to upskill your people across the board to make sure they’re aware of these tools that are out there, the applications, and most importantly, implement them so they can actually start servicing their clients more efficiently.

Q: Our firm is almost entirely manual as a firm, but there is so much technology out there and though we’re looking to be more efficient, we don’t know where to start.

See Roman's response to this question in the video below

Be sure to tune in to our next article, when Roman addresses questions about protecting your firm, specifically due to the fact that security threats are evolving too rapidly to keep up and what firms can do about it.