For many, the word automation simply means using software. A common misperception among accountants is that using platforms that digitize your invoicing and bookkeeping, like Bill.com or QuickBooks, means you’ve automated your accounting office. That’s not entirely true.
Take bill paying, for instance: You still sign in, select the vendor, choose the payment amount, and transfer the payment. Over and over, manually. Or payroll: How many payroll systems still require you to log in and manually click a button to push the payroll summaries into accounting? Not to mention the fact that you are beholden to their summary postings designs, which are cash-based and limited in scope. That just means more manual work for the bookkeeper.
Automating these data workflows doesn’t exist today in a common interface — yet it is what’s needed because finding people to do the manual work is nearly impossible. In fact, recent studies have demonstrated that many accounting professionals have left the profession and the pipeline of accountants is decreasing. On top of this, the
At the same time, your clients’ businesses are increasingly getting more complex. Businesses are transitioning faster to e-commerce, adopting an influx of new sales apps and payment methods that are further complicating the work of accountants. The "buy now, pay later" market is just one example, which is expected to grow by more than 22% annually from now until 2028, according to
In 2022, the profession must expand on the definition of accounting automation; it must mean using artificial intelligence, simple rules-based systems, and managing by exception so accountants and bookkeepers can get a single flow of all the data they need to do their job on budget and on time. Automating data workflows into accounting systems can save a minimum of 20 hours per month per client, enabling accounting firms and independent accountants to refocus on growth while increasing profit margins.
But it's not just the accounting firms that need to change. The software vendors are often the cause of great frustration among the usually voiceless accounting professionals. New software tools adopted by businesses are sold based on features attractive to the businesses, not the accountant. Actual accounting automation is either not available in these apps or is just an afterthought. Sales, payment and payroll software vendors need to have a common automation framework that will work across all accounting platforms. That does not yet exist.
Many of us in the industry imagine a world where systems interact and pass the proper data flawlessly. While the perfect solution does not yet exist, there are steps you can take to move in the direction of proper automation:
- Make sure all the tools you use are cloud-based apps that inherently have automation capabilities and will allow future integrations with other automation platforms.
- When choosing cloud-based tools, be sure they have an API, or application programming interface, which allows developers to write automation that can share all data needed for financials.
- Although this is very hard, you must standardize on a set of cloud apps for all your clients. You cannot grow if you have to learn four payroll systems and train your team on all of them. The same goes for sales and payment systems. The most profitable accounting firms stick to their required software stack.
- Have your team keep track of all processes where they enter manual data into accounting and look for tools to automate. Even better, keep track of hours spent on manual data entry by client and by process. This will help you eventually automate these processes.
Accounting automation isn’t simply software or a “bolt-on” solution; it’s a growth strategy for accounting firms and independent bookkeepers. Those who embrace this definition will lead the profession forward in 2022.
