Finance might be one of the most complex professions to work for; with ever-changing landscapes, regulations, accounting standards to ever-increasing data, expenses and forex fluctuations. Thus, it has become extremely necessary for top financial and accounting firms to stay vigilant and keep up with the changes.
One of the key changes one can implement is automation. This change will help to streamline and enhance the efficiencies of various processes by leveraging new technology made accessible to us through digitization. One of the major building blocks of any firm is accounting and like other branches, it can also draw huge benefits from robotic automation.
Albeit, the techniques used in accounting procedures have remained constant over a few years. The efficiency of these procedures can be increased by introducing automated cloud accounting software.
“It is time for businesses to move on and adopt new and innovative tech disruptions if they want to survive and make a successful future.”
Time to Discard Old Practices
Let’s go through a list of factors that are archaic and redundant but are still being practiced by conventional accounting in businesses.
1. Fraught With Human-Errors: Traditional accounting practices demand a lot of data entry, which increases the chances of data entry errors and requires personnel to go over them twice or thrice to ensure accuracy.
2. Mundane and Monotonous Work: Traditional accounting practices require a lot of patience and time to perform work which is repeated and redundant. These naturally require long work weeks, diminish the output and additionally results in higher incurred expenses.
3. Keeping Records is Cumbersome: For any business, keeping all records pertaining to finance and accounts is mandatory. Now, to store them in a systematic manner, over the years, requires manpower and consumes time. This surely burdens the businesses economically.
4. Limited Accessibility: The approach to these records is confined only to those professionals who specifically worked on these documents. This becomes a big hurdle for the business as a new person will take time to go through it.
5. Lacks Customer Friendliness: It obviously cannot be beneficial for customers as all the functions move so slowly.
Why Automate?
To overcome these shortfalls, businesses are now adopting modern technologies.
Using cloud accounting software, accounting organizations are automating these tasks with minimum human involvement.
- Journal entries,
- Reconciliations and
- Preparing financial statements and documents
The biggest advantage of adopting business accounting software is that it essentially provides accounting personnel to stay on top of these procedures.
Historically, accountants' time was taken up by compliance work which made it harder to view financial and operational data in real-time.
But with automation, the scenario has changed drastically and now they get more time to:
- Analyze,
- Stay in sync with changing regulations and
- Make strategic decisions.
Hence, they can play a more productive role in the company.
Robotic Process Automation – An introduction!
Robotic process automation (RPA) is the application of the software that imitates human engagement with basic systems, web and desktop applications to carry out processes. It automates processes by accessing user interfaces without underlying programs.
Due to its low cost, if this automation technology is well implemented, it will provide a significant return on investment.
Being an automation option, RPA could be compared to Enterprise Resource Planning System (ERP) upgrades, switching on ERP modules and specialized accounting software (for example- reconciliation and consolidation).
RPA can be used strategically as part of a holistic process improvement program or tactically to automated redundant as-its procedures.
Due to its user-friendly interface, it can be taught using minimal training and proper communication.
Using automated cloud accounting software, we can harness a plethora of advantages and streamline our process.
Advantages of Cloud Accounting Software
Advantage #1: Accuracy of data: With the disappearance of manual entry, automated tools provide more reliable and error-free data.
Advantage #2: Increased efficiency: Accounting teams can improve their project management style to focus more on analysis and global strategy, which could be based on the results of automated procedures.
Advantage #3: Transparency: Automated procedures leveraging on business cloud accounting software can provide their users with transparently stored data, making it easy to access for everyone involved.
Advantage #4: Better Client Collaboration: Auditing procedures require a lot of data to be imported from clients to book-keepers and accountants. Automated cloud-based tools provide a reliable solution for more comprehensive and faster sharing of data to streamline processes at both ends.
Advantage #5: Rapid implementation: With the availability of user-friendly cloud-based automation software, the implementations of these tools require basic training and are easier to learn.
Benefits to Accounting Functions from Automation
The Accounting functions which can certainly benefit from automation and capitalize on new opportunities are as follows:
Benefit #1: Financial Reporting: Financial reporting might be the field that would benefit most from the automation of accounting software.
Automation of financial reporting will expedite audits, build solid financial statements across different countries, accounting for changes in reporting standards (IFRS, US GAAP, among others).
Preparation of consolidated annual reports and financial statements has also become easier, providing correct data to analyze multiple-entity performance during a cycle.
Benefit #2: Standardization and Reconciliation: Automation can help in easily customizing content, prepare user and client-friendly reports and build an efficient format that can help in maintaining a superior standard of reports over a long period of time.
Benefit #3: Finance Business Process: Workflow and division of tasks are much easier using cloud-based automation tools, ensuring personnel having clear-cut tasks for them while being in contact and noticing what the rest of the team is doing.
Benefit #4: Financial Modelling and Analysis: With automation, excel-sheets have seen a significant cut in errors, which helps management to make the correct decisions by letting them analyze information that is reliable.
Benefit #5: Tax procedures: In Tax procedures, RPA (Robotic Process Automation) is used to create automation, configured to repetitive processes such as submitting filings to tax authority web portals, which as said earlier, frees up the tax team to perform higher quality work such as research and planning.
“Accounting firms, even if small in size, can capitalize on this disruptive technology and streamline their business as much as possible.”
However, careful planning is needed to incorporate automation in the already existing business model. This can be done in the following ways:
- Carefully planning the procedures that could benefit from automation and not disturb the procedures that are perfectly optimized. Once these processes are selected, then choose the best cloud accounting software that will fit perfectly with the business unit and its existing IT setup.
- After the planning, the next step is to involve all personnel and ensure they understand the new flow of processes and documentation. This step is critical to the efficiency of the whole operation because, if the new flow of order remains unclear, then delays would be caused and information could also be lost as a result.
Automation processes have their own hiccups as well; therefore, it is crucial to ensure that these points are addressed well before the implementation of accounting software is being planned.
Some of the problems that accounting firms have encountered during their successful implementation of automation based cloud tools are as follows:
- Uncertainty in the workplace
Automation by some organizations was regarded as a process to streamline their expenses. This perception often creates a sense of uncertainty around the workforce as they feel apprehensive about losing their job etc.
- Data privacy & regulations
The problem with the digitization of accounting is that very crucial documents and management reports can be accessed unfairly by people involved in wrongdoings online. With bodies like the European Union already planning changes in regulations, the storage of data becomes a key criterion for firms who want to use automation tools to judge firms providing these services.
- Training issues
As more and more sophisticated automation software are coming up, firms become short-staffed in having experienced personnel who can train other personnel to undergo a successful implementation phase. Thus, improper training always leads to not fulfilling the potential final outcome and falling short in meeting the future targets set based on this change.
- Reliability of cloud-based automation tools
As disruption within the tech space is so prominent, one can never be fully sure that the software that is the best accounting tool now will be the best in the future. Thus, thorough key research needs to be done by businesses beforehand so as to keep a competitive edge over other peers and not let it slip.
“But we should not be worried about these obstacles, as, with proper planning, it is possible to go through a smooth transition.”
Some of the factors that help in the implementation of the best accounting software are as follows:
Factor #1: Better training programs
Hiring experienced or already possessing a change management team in the firm would really harness the full potential of the automation procedure: pre, during and post-implementation. It would be beneficial to include accounting experts who are well versed in automation processes and realize how to steer the ship.
Factor #2: Proper due-diligence
Accounting firms need to perform thorough research about their needs, automation tools available and finding the best accounting software that will create a synergy with the existing procedure.
Factor #3: Data handling capabilities
Having personnel that has experience handling chunks of data and have the knowledge of data regulations and privacy protection would always be beneficial.
“Financial services firms should consider investing in automated cloud accounting software that will not only streamline their processes but also produce a quicker output and finally speed-up their businesses.”
The Final Word
As change is the law of nature, it is imperative for accounting companies to go with the flow and embrace the new, innovative tech disruptions.
The future of accounting will undoubtedly be shaped up by artificial intelligence and machine learning; therefore, being in sync with automation is not an option but a necessity for accountancy firms.
In Robert Half’s “Jobs and AI Anxiety Report,” RPA has been described as a way for businesses to automate tedious or repetitive processes to save time and money and increase employee productivity. Data from this survey shows that 79% of managers in the United States employ automation right now or expect to do so within the next few years.
Thus, it is clear that the firms that opt to upgrade themselves and their personnel with the best accounting software at the earliest will be the ones who will reap the highest benefits.
‘A futuristic approach, teamed with intelligent and strategic planning, will lead to definitive success for businesses in general and accounting firms in particular.”
Artificial intelligence and human intelligence can come together to make the best of it; it will promote insightful practices, add value and increase efficiency. It is a partnership that will usher in a new and progressive period for accounting firms, bringing about rich dividends in the future.
People working in the finance and accounting industry, need to upgrade themselves by acquiring new skills that match with the latest tech developments in accounting software.
The industry and the professionals are all ready to embrace the change that is coming their way due to robotic automation and artificial intelligence.
Tech disruptions always keep changing. Thus, it is essential for a firm to be an industry leader when it comes to implementing changes and additions. ‘First mover advantage’ is a big factor, especially in the financial services industry and to maintain that innovation is key.
“Using new technology to perform operations, always demands new and innovative solutions to come out as a byproduct.”
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