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Are automation tools fulfilling their promise?

Richard Sergeant explores whether accountants in practice are seeing the full benefit of automation and to what extent they are on the journey to fully automating tasks.

18th Mar 2020
Director Principle Point
Columnist
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The flow of data from one system to another is one of the heralded benefits of having more cloud-enabled software. A question, however, still remains over whether this drive, and the automation of processes that follows, is actually making set work, like year end accounts, any easier.

How close are we to the fully automated dream?

It’s not just technology 

Many firms have successfully embraced automation through joining up receipt and invoice capture with accounting software and bank feeds. This basic level of automation, for many, is viewed as a no-brainer and the most obvious starting place to help the data in. 

However, automation is not as simple as mapping out a process and stitching it together with software. Instead, we are often talking about is improving the data processing of a particular part of a service, rather than automation.  

For JSA director of accounting services Chris James, data collection is a challenge, but it’s what happens next in the bookkeeping process that is the hard part. “Getting things right at the front end – including all the client and staff training – is important, but then you also have to do the right integrations to actually save time.”

As Just Add Tech MD Jon Jenkins points out, automation is not always successful. “Some processes are easier to automate than others, and some even create more work. We found that Xero Workpapers created more work when putting together year end packs, [and] we stopped using it.”

Are the solutions out there?

Nonetheless, Jenkins remains positive about other products currently available: “Using Taxfiler for stat accounts and corporation tax is a winner compared to Iris or Digita.” 

For each firm, however, the value of each automation service will vary considerably. According to Jeffreys Henry partner Bhimal Hira, when it comes to the technology available for larger firms or more complex clients, “Automation for audit and tax planning is far behind what is available for other areas. Little is readily available for firms with sophisticated clients”, or for large and complex firms. “It’s a hindrance as nothing is viable other than the typical legacy systems”.

In Hira’s case, the answer was to piece together an increasingly complex ‘stack’ of technology. “For our AIM-listed clients, we've been crafting and developing our own tech approach which currently involves up to ten connected systems. This covers client communication, file sharing, collaboration, workflow and job planning, and then into the actual audit software.”

While it is possible to create increasingly sophisticated automation, development and implementation can be as equally complex. Without proper application, these systems can end up creating a technical overhead for the firm.

Quality of data

John Toon, manager at Beever and Struthers, takes a pragmatic view towards the value of inbound data and its various controls: “In theory automation makes year end much easier. But the old adage – garbage in garbage out – still applies. So for the clients with good bookkeepers, or those who take our training, there are fewer problems and getting compliance done is easy. For those that just wing it, old problems arise. But, with tools like Xavier Analytics, you can pre-screen client data before getting up to your neck in it.”

Counting Clouds Cambridgeshire MD Caroline Harridence concurs with Toon. “If the set up is right, then it works well. But we need to have some control over the bookkeeping or some form of checking. Now that we have a quality gateway, the year end process is much quicker than without automation.” 

Even with the availability of systems to help with quality control,  the implication is that there is still some way to go before the data collection part is robust and accurate enough to fully live up to the envisaged rewards. 

Real value

For Jenkins, the rewards are based around efficiency and capacity. “What I really want to see is tech and automation being used to save time, and provide better solutions and service. For me, it is about doing more of the same, [but] faster, cheaper and scooping up more clients.”

According to Woods Squared director Alan Woods, “The challenge is to provide the 'value' to the customer [using] the time saved from automation. I'm not talking about the elusive, all-encompassing advisory work but tax planning advice and [spotting] opportunities that make a difference.”

Hira explained that implementing automation tools can revise business approach and service regarding audit. “Automation should help us gain access more regularly to the complete data set, which should not only help provide a steer to the business through the year and speed up the final audit, but also help in areas like preventing fraud. We’re getting a build-up of the picture through the year, not just at the end”.

The neverending cycle of implementation

With the flood of software in the market, firms increasingly require stronger tech capabilities and implementation processes to benefit from new automation technologies being developed.

Stitching together multiple systems, and being aware of other implications, such as GDPR, is not always easy. Even with API’s enabling the various ecosystems to function in new and interesting ways, the fundamental issue of helping clients with basic financial administration is still core to quality.

Consequently, the next goal for automation is likely to focus on streamlining the number of softwares and apps, whilst reducing the cost and complexity of these technologies.

It would appear that the road to fully-automated set processes is not a streamlined one, but an unavoidably long, complicated process. And in the words of Jenkins: “Automation is not a prerequisite for good service.” However, through repeated testing and implementation, it might just get us there a bit faster.

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