Share this content
man looking at desk monitor with electronic images

How Your Firm Can Identify Automation Opportunities

Jun 26th 2018
Share this content

Automation is the delegation of the human control function to a machine and in accounting, automation is the delegation of human control function software.

With this definition in mind, let us look at how to identify automation opportunities in your accounting practice.

It's Not Just About the Software

One of the myths around automation in accounting is that automation originates from the software. Yes, automation does get facilitated by software. But it does not necessarily always originate from the software. It is more about your work processes, both internal and external and combining those with the software defines the levels of automation at your end.

Review your work processes to identify the process steps handled by humans. Then find out whether such steps involve data/information or physical things e.g. paper. If it involves data/information, you have opportunities to automate further. 

If Your Staff Enter Data, You Have Automation Opportunities

Cloud, internet technologies, and the accounting software have evolved tremendously over the years.  Efficiency gains possible now were hard to even imagine a decade ago. “Computerization” or “digitization” of your accounting processes may have made you feel like the firm of the future. But that is just not enough anymore.

If your staff enters data in any process steps, you have automation opportunities. To find these automation opportunities, figure out the following:

1.         Does my staff take information from a source document in paper / electronic (pdf/email) form and enter it into a software?

2.         Is my staff entering data to enrich/add to the part of the transaction data already created, either by some other staff of the firm or by someone else (client, a vendor of the client, customer of the client, bank, etc.)?

3.         Is my staff downloading the data from somewhere to restructure/reformat it, and then importing into a software?

If you answered yes to any/some/all of the above, you have opportunities to automate. In all the three cases above, you will need to look for utilities/software that can:

1.         Receive source data in an electronic, secure form to automatically populate it within your accounting software

2.         Apply predefined computation rules to the data so received – to append more relevant data fields.

3.         Connect/integrate the software that produces the source data with your accounting software. When doing so, there should be no need to manually export data from one system and import into another.

Look Inside and Outside Your Office

You will/can automate most of your internal work processes. But there are a lot of external processes that you can automate. For example automation of transactional data exchanges:

  • vendors/customers/clients
  • bankers
  • IRS/State departments.
  • Social media
  • client communications

Prioritize your automation plan for external interactions that are more regular/frequent.

To automate internal processes, imagine that every process has vendor-customer ends. E.g. Output produced in a step by person A is the input for person B completing the next step. Person A is the vendor and person B is the customer.

All such hand-offs between person A and B are potential candidates for automation. In some cases, it will be simpler with very minimal processing rules being applicabl or it may be more complex E.g. financial approval authority/rights. System access rights for “posting” the transaction to the database for printing checks etc.

Many accounting software now allow add-on “apps” that can enable you to automate more. There are professional accounting platforms like Accounting Power that have inbuilt process flow automation as well as third-party tools integrated right within the process flows.

Depending on your needs, and appetite, you can start with automation in a small way. To leverage automation more, automate and integrate your process flows into the accounting software itself.

Automation of Client Service Communications

Cloud has made “collaboratively working with clients” a must. Collaboration enhances your value as an accountant. It helps you be a business advisor. It is because cloud collaboration enables you to interact in real time with your clients. E.g. interact with the business owners while they are making business decisions, not after.

When that happens, business owners start thinking of you as an extended part of their business. They rely on you more and more for navigation of their business challenges. Over a period of time they will pay you much higher fees compared to the lower end transactional fees.

This is a huge opportunity when you automate the client service communications for regular, financial/businesses transactions. Automation of sending financial reports, analytics reports etc. – after the transactions have already been done – may be somewhat useful for your firm to reduce time and cost of doing that reporting.

But, your clients will value more – and pay you more – if you can automate collaborative decision making. E.g. you enter/process bills accurately, leverage the payment terms to the best advantage of your client and seek digital/online/real-time approval from clients to pay those bills. The client “retains” control of his/her finances. Yet the entire flab in the back-and-forth manual process gets cut down to a minimum.

Automating collaborative work-flows via automation of client communications is not a separate process. It must be ingrained in the accounting process flows. As a professional accountant, you need to use professional, automated accounting solutions that put you in control.

Replies (3)

Please login or register to join the discussion.

By stephendavison
Jun 28th 2018 05:09 EDT

Hello Hitendra,

Interesting post.

Many people face difficulties while identifying automation opportunities in their accounting practice. This article helps them a lot to identify and grow automation opportunities.

I agree with your words Hitendra.

Thanks (1)
Replying to stephendavison:
Hitendra Patil
By Hitendra Patil
Jun 29th 2018 09:47 EDT

Glad you found value in the post, Stephen! Thanks for sharing your experience here. I observed that it is perceived that automation starts with technology. It is not true. It is the processes in accounting firms' offices that generate the real opportunities for automation, which technology can then facilitate.

Thanks (0)
By Alizeh741
Mar 7th 2019 04:54 EST

Hey sir,nice blog.Too much informative..Cleared many myths about automation process.I agree with accounting part too.Waiting for your informative blogs

Thanks (0)