How to start automating your practice
Richard Sergeant looks at automation and discovers how accountants are already seeing the benefits from implementing the year's big new trend.
Practice automation is turning out to be one of the hot topics of 2017. Seemingly few vendors wish to be left out, with some very specific visions of how future technology will shape the form and function of firms, such as machine learning, artificial intelligence, and connected systems.
The trouble seems to be that it sounds very disruptive (and don’t we all love big change projects), and expensive.
But which areas are the most practical in the short term, and where do you start? I asked accountants and vendors for their suggestions, and this was their top three.
Glenn Martin from Avery Martin Accountants, highlights the very beginning of the client process: “From a practice perspective the onboarding of clients is increasingly difficult and has that many steps involved it is hard to be efficient. It is ripe to be systemised and automated wherever possible”.
Increasingly the manual process of creating client quotes in an easy and consistent format, creation of engagement letters and following through with digital sign off, and setting up of payments is an area that has opened up. The value being in the sales process, and client experience and not the administration.
Brendan Allen from Practice Ignition, commented: “This is the next big 'puzzle piece' in running an efficient and profitable practice. Business owners are starting to understand the importance of an easy and transparent client experience from the second they walk in”.
So, the benefits are both to the firm and in the perception of service by the client. A win/win perhaps?
Olly Evans of Evans & Partners, however, would say not: “Onboarding automation is good to have, but 90% of our efforts are elsewhere - mostly managing bits of data from clients”
Unsurprisingly, given the impetus of cloud accounting over recent years, bookkeeping and data collection features heavily.
Evans continued: “Accounting firms spend a lot of their time collecting data from clients - paper, bank statements, records etc. Automate this as much as possible - use Xero with bank feeds and Receipt Bank to collect paperwork”.
That’s something Martin also agrees with: “Products like AutoEntry have been game changing for client side bookkeeping, and can save 60/70% of data entry time if implemented correctly”.
So beyond scanning and indexing, we now have OCR and classification as well as nearing a new world of auto reconciliation through machine learning. Increasingly this is a theme being picked up by the major vendors as with Sage’s ‘invisible accounting’ and Xero’s ‘no code accounting’ - the sheer amount of data and the software’s ability to analyse it, learn and make decisions about what it means and how it should be treated is a huge area of R&D.
While signposting time savings, it also has another benefit: “If you can automate anything that reduces or eliminates the potential for (human) error, this should be pretty high on the priority list”, said Andrew Perrett from Taylor Cocks.
So we have clients, and we have data, but what about how we handle the flow of that data and the tasks around it as services are fulfilled?
Alex Davis, Intuit, said: “The real opportunity is systemising the workflows and using automaton to remind clients about deadlines and commitments”. Which points to features of both the cloud providers accountants hubs like Xero practice tools and QuickBooks Online Accountant, and of course the new breed of practice management software.
Some of this new software looks promising. With products like MTrio utilising the capabilities of Salesforce, and Senta using APIs to display key data from apps used by many firms already such as cloud accounting and more recently direct debit provider GoCardless.
But is this true automation or just building software that provides more connected services?
We should note that it isn’t easy to pass data from cloud accounting software through to accounts production. Although there have been announcements of integrations between Xero and Thomson Reuters Digita, and also CCH, take up here so far does seem to be limited.
Connecting services and passing data seamlessly would make a lot of sense but progress is slow. There is also the more political angle of vendors not wishing to be too helpful to competitors, so it would be great to think that Sage’s Accountants Cloud might also integrate with Xero, but it’s unlikely to happen.
So although workflow is an area where probably the most efficiencies can be made, looking at it in smaller chunks is probably more realistic at the moment. As Alan Woods, Woods Squared suggested: “Look for the quick wins for those tasks that you (or your team) do on a repetitive basis and automate those first.”
The automated practice is still some way off
Given some of this insight, it would seem that a highly automated practice is still some way off. Even some of the vendors who responded noted that it is the direction of travel rather than something achievable right now.
Glen Foster of Xero noted that “automating current paper processes is necessary but also the easier option and available now”. While Andrew Garvey of FreeAgent added a further note of realism: “Maybe a slight alteration to an existing workflow will allow greater possibilities than trying to fit automation across the practice”.