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Financial Automation

3 Major Impacts of Financial Automation Now and in the Future


What bearing does the present and future of financial automation have on the CPA profession specifically?

Jan 15th 2020
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This week Invoiced, an accounts receivable automation platform, published new research on where the accounting and finance profession stands on the path to adopting financial automation technology. Below are a few notes of guidance for CPAs based on the findings.

1. Clients will expect CPAs to deliver more strategic, consultative service

Because clients recognize that automation can offload menial tasks and theoretically reduce billable hours, it follows that they’ll expect their CPAs to allocate some portion of that time to providing a more strategic and consultative level of service. The alternative of course is simply charging less for the same work.

One can get a few cues on how the role of the public accountant will likely change by observing how the travel agency industry has been affected by digitization. In that business we see travel agents (the ones who remain) providing more personalized service, faster service and leveraging newly reclaimed capacity to serve more clients in better ways.

So how will the fundamental nature of being a CPA need to evolve? The most successful CPAs will push themselves to minimize time spent on basic bookkeeping and data entry, and dial up time spent on data analysis and developing more operational recommendations for clients.

2. There will be more pressure on CPAs to be tech “choreographers”

Almost every CPA at some point has provided counsel or direct implementation and management assistance with some form of accounting technology on behalf of clients. As the recent research shows, the profession recognizes the ability to integrate with other systems as the top criteria to consider (51 percent) when implementing financial automation technology.

More than ever, businesses expect systems to be tightly synchronized, reducing data entry effort/error and enabling one hand of the business to know what the other hand is doing. As more systems become key ingredients of client engagements, CPAs will be expected to orchestrate how they all work together to deliver results, insights and efficiencies for clients.

You may be asking yourself, “wait, I’m supposed to become a CTO overnight?” Not necessarily. While many technologies have become more sophisticated and powerful, software vendors are increasingly investing in user experience to make their products more intuitive, making them easier for businesses to use and easier for the software vendor to support.

Many of the latest cloud technologies now let you sign up for a free trial account instantly and connect with other systems in just a few clicks. This means innovative CPAs can test and learn with very little direct cost, and they don’t need to wait for an acute need from a client. The most progressive CPAs are already getting their hands dirty in this way.

3. The challenges and opportunities for CPAs are inextricably linked

Taking a step back, it can easily seem like these top takeaways spell nothing but challenge and more work for CPAs. Do more with less. Be not only my CFO but my CTO. And charge me less for it. But there are also some significant opportunities wrapped up in these evolving client expectations:

  • Differentiation: If you develop an ability to lead your clients through inevitable digital transformation, by extension you’ll have a powerful point of differentiation among your peers and competitors. Accumulating the expertise needed to effectively advise and serve clients with automation will surely set you apart from the pack, but there’s a limited window of opportunity.
  • Indispensability: If you can play the role of automation expert for your clients, not only will you be enhancing your relationship with them, but you’ll also be making it all the more difficult for them to live without you. And the longer you keep and grow client relationships, the healthier your own business will be.
  • Income: This isn’t always the case, but quite a few vendors offer referral and reseller programs for CPAs. While it’s essential to connect the right clients with the right technology assortments, the right referral and reseller arrangements can create sometimes lucrative passive income streams for your practice. (Disclosure: We at Invoiced offer CPAs referral and reseller programs for our A/R automation cloud.)

More on the Study

The Financial Automation Imperative study was fielded in November and December 2019 and published in January 2020. The study is based on online survey responses from 459 U.S. finance and accounting professionals. Primarily, it found:

●      Cash flow related automation technologies (Accounts Receivable and Accounts Payable) have the highest adoption levels at 49 percent and 47 percent respectively.

●      The ability to integrate with other systems is cited as the most important decision driver when considering purchasing financial automation technology.

●      Reporting/forecasting and accounts receivable are the top automation priorities with 45 percent and 44 percent of respondents respectively indicating those categories as high or very high priority.

The full report can be downloaded for free here.

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