The digital revolution is creating waves in the accounting sector. However, many accountants are daunted by the potential impact of new cloud-based technology and automation on existing systems and processes.
While digital transformation is necessary to keep up with market demands, the sheer volume of available tools, apps and software – and how you fit them together in a robust and logical ecosystem of technology – presents numerous challenges.
Becoming a ‘digital’, data-driven firm isn’t a quick and easy process. The integration of different accounting systems and apps can’t be done off the cuff – it needs to be planned very carefully, with input from all key stakeholders. This not only means seeking input from your existing clients and prospects, but also from staff within the firm.
Once implemented, the new system can take care of all the repetitive, but critical administrative work. Traditional accounting tasks like invoicing and number-crunching will no longer need to be managed manually, freeing up accountants to take on more advisory and consultancy work.
Larger and more specialist accounting firms with enterprise-level clients will have already incorporated this sort of consultancy into their service offerings. However, with the right use of technology and the right ‘digital’ mindset, smaller firms can now do this too. Not only does this benefit clients (who get more out of their relationships with accountants) but it also supports the business growth aspirations of these accounting firms.
Let’s take a closer look at the importance of technology integration and how it can help firms build and retain loyal customer relationships, as well as aspire towards winning larger clients, and therefore stimulate increases in revenue.
Build better client relationships
Accountants need to take the time to assess their needs and then use that information to determine which individual apps and systems will work best with each other – with the overarching aim of painting a better picture of financial health. If there is a sense of disjointedness in an accountant’s overall tech stack, it will impact on performance and, by extension, client relationships.
Integrating apps with core management systems allows accountants to deliver live, meaningful financial data to clients from across a broad range of key areas. It’s important to understand that there are a huge number of apps out there, specialising in everything from inventory management to expense management to customer relationship management (CRM).
When you can compare and contrast data from a number of different sources, hidden issues are easier to uncover – and it’s often the case that the data itself can point to possible solutions. Of course, this isn’t to say that the accountant plays no part; rather, the accountant becomes responsible for translating this data into meaningful actions that will benefit the client.
This, in turn, is the approach accountants will need to take to build better client relationships and continue to add value. Technology is increasingly enabling traditional, time-consuming tasks to be streamlined and automated, and we are seeing the accounting profession transitioning towards strategic financial consulting for businesses.
This consultative element of the profession isn’t necessarily new – but it is something that a) accounting firms will now have more time to develop and b) is something that today’s clients are demanding more of.
Greater business growth
Scalability is another important concern when it comes to choosing accounting systems. Cloud-based technology is the best route to take: it helps to mitigate upfront and hidden costs, as upgrades, integrations, and maintenance can be handled by the service provider on an ongoing basis, and your cloud setup can grow alongside your business.
The efficiency gains that a firm can make as a result of building a tightly integrated technology stack can’t be understated. Many accounting actions completed manually can take twice as long as those completed using automation.
Time-sapping tasks can be a huge issue, especially as many accountants work on either a time-based or fixed-fee billing system. Why spend time on these tasks, when time could be spent on more valuable (and potentially more profitable) advisory work?
Another benefit of automating tasks using technology is that it helps to reduce the number of mistakes. The fact is that manual processes lead to human errors – and that leads to more valuable time being spent on fixing them. This problem is compounded by the fact that accountants all too often work with outdated insights, with a lack of visibility into a client’s complete financial situation.
This is where seamless integration is so important: to guarantee complete visibility, different systems containing different data points must be kept in sync, in real time. For example, expense management platform Soldo has recently launched a new integration with Xero that pushes enriched transaction information (including receipts and expense categories) into Xero, while also automatically synchronising all transactions to the Xero bank statement via an automatic bank feed. This allows Xero to automatically match the bank statement to the enriched data coming from Soldo, and makes expense reconciliation as simple as a click.
The human touch
Ultimately, apps and systems can perform data management tasks more effectively, but they can’t (at least not yet) offer the deep level of analysis and strategic thinking that a human can. Understanding this difference is central to understanding the best way for accountants to work in tandem with technology. Let’s also not forget that a more efficient use of automation will also help accountants to counter the inevitable downward pressure in compliance fees.
As firms adjust to the demands of a digitally enhanced world of work, they need to remember that digital tools cannot replace human relationships. Cloud-based technology and automation are crucial to remain a relevant and lucrative business, but they are not yet able to replace or replicate the human touch.
About Will Farnell
Founder of Farnell Clarke Ltd a fast growing practice based in Norwich. One of the UK's first all cloud firms delivering services in the cloud since 2008. Winner of UK Most Innovative Practice 2016 at the British Accoutnancy Awards and Winner of Best Independent Practice - East of England in 2015 and 2016.
Will is the author of 'The Digital Firm' plublished in 2018, a blue print for digital transformation. A regular speaker at industry events on cloud accounting, the digital practice and the future of the accounting profession in the UK.