Dear Accountants, I say Let's Automate

In my recent LinkedIn Post I made mention of a few statistics from the Future of Jobs report by the World Economic Forum. One thing that really stood out in the report was how most roles you would typically find being performed by accountants or exist within Accounting Practices will be made redundant by technology (they’re going to be automated, if not already). Amongst these are roles such as Data Entry Clerks, Bookkeepers and Payroll Clerks, Administration Managers, Accountants and Auditors.

And you know what my thoughts are, I say LET’S AUTOMATE.

In this article, I discuss the WHY I think it’s in the best interest of accounting practices to automate and HOW they can go about doing it.

Technology is always evolving, and so is the Profession

Accounting has come a long way since the introduction of the double entry system in the 15th Century, and along the way it created a whole profession, a resilient profession might I add. This is a profession that survived ground-breaking developments that, if anything, made things a lot faster. Think about the impact Calculators had to an accountant’s life, the mighty Excel Spreadsheets, and the introduction of Desktop Accounting packages. One thing that’s certain is that these developments made our lives better in more ways than one.

In each phase, the resistance to change could have only been a natural response. Today, not only do we have accountants finding it hard to move away from their functional desktop solutions which they know and love to cloud solutions, we still have thousands of accountants out there using excel to execute their core services.

My point here is that the profession has survived technology before and will continue to do so for a very long time because what a lot of people tend to overlook is that what technology cannot automate is client relationships. Those who think this industry is at risk because of automation need to think again because we’ve been automating things for years and guess what, the profession is still standing strong.

This is an industry built on trust and personal relationship. Recent research done by IFAC clearly shows that SMEs (60%) would trust an Accountant for business advice before they trust consultants, lawyers, and bankers (all less than 10%).

Now, if I was a lawyer, this is probably a point where I would say I rest my case! But thankfully I am not lawyer, and there’s still lots to talk about lol.

Okay Let's Automate. No Wait, Let's Think About This

Although I think that I made a very good point above, a lot of firms are still worried about the idea of automation tasks and processes. This is mainly because of the business model the profession adopted, and as such firms bill clients based on time spent on their books (i.e. Time-Based Billing).

 Clearly this model can only benefit the accountant and not the client as it provides no incentive for accountants to be efficient. Automating your practice would mean exactly this, you would spend less time on your clients’ books and therefore, ethically speaking and according to your pricing model, cannot bill as much anymore. “This is bad Walter”; one would say. But I say good for the client if that’s how you bill them.

This situation brings us to one of my favourite topics, Pricing. How should accountants’ price for their services? This is a topic I would like to explore with you in a different article but in short, you have two options, Fixed Pricing where you put clients on retainer, and my favourite, Value Based Pricing. Both come with their own intricacies which I promise I will address separately.

Can We Automate Now?

Assuming pricing is a non-issue we’re going ahead with automating our practice, we need to take a step back and assess what we need to automate and why.

In doing this, I think that as a profession we need to take same approach Steve Jobs and Jeff Bezos took with Apple and Amazon respectively. All they wanted to do was provide their users with the best customer experience, and they achieved just that.

How you do this as a practice is by understanding the value and experience required by your clients and that which you would like to provide, and then working backwards in making sure that everything you do internally plays a part in what you’re trying to achieve.

My take is that clients are normally looking for three things from an accountant, and that is:

• Can I trust you?
• Are you capable of producing the required outcome?
• Can you provide a great experience while delivering the above?

If you can answer these three questions, then half the automation battle is won. These three elements are heavily intertwined and therefore you cannot afford to compromise on any otherwise you lose client.

Trust, Capability/Outcome and Experience will the three pillars holding this industry together going forward. This is important because institutions such as banks are trying to provide accounting software and services to their business clients which is the same pool of clients the industry services, but this is a topic for another day.

Noted, Can We Now Automate?

Once you know what your clients value (this is a very interesting topic, but let’s address it in a different article), it is easy to identify if a process or task positively contributes towards achieving the outcome your clients require or towards providing superior customer experience.

The best way for practices to go about the automation process is to answer the following 3 main questions about their businesses:

1. How do you attract and onboard new clients?

• What are, and how do you execute your Marketing and Sales activities?
• What activities take place during your Onboarding Process?

2. How do you provide the service required by your clients?

• How do you collect or receive the client information?
•  How do you capture and process the received information?
• How do you report the processed information?
• How do you deliver the outcome to your clients?

3. How do you create customers for life out of your clients?

•  Are your clients happy with the value & experience received?

Once you’re able to answer the above questions, all your manual processes and tasks will be revealed areas that need automation will be easy to identify. What’s also important is to identify which processes and tasks add value (aligned with the Trust, Capability/Outcome, Experience) to your clients and which ones don’t.

I hope through this article I have successful in not only debunking the idea that technology is here to kill the accounting profession and demonstrating the benefits that technology can bring if embraced by Accounting Practices, but also making you aware of some of the factors to consider when automating your practice. Please note that in this article we briefly to addressed matters to consider when automating from a Customer Value Perspective, there are two other perspectives which I will address separately and that is the Employee Value Perspective and the Business Value Perspective.

Please feel free to comment and share your thoughts on the above, let’s engage.