Automation: The Biggest Game Changer for Accounting Firms
And a business model must-have
The accounting landscape continues to transform as automation becomes a business model must-have. And no amount of denial is going to change this.
While some may view this shift with apprehension, it's becoming increasingly clear that embracing automation is not just beneficial, but essential for the future success of firms. In other words, it’s time to get on board or be left behind at the station!
Insights from another influencer
Automation is a regular topic of conversation between me and Donny Shimamoto, CPA, CITP, CGMA and managing director of Intraprise TechKnowlogies LLC. Donny is a unique blend of accountant and technologist with a background in software development dating back to the 1990s. He's the go-to expert for accounting leaders looking to innovate but unsure about what technology to adopt.
“I help people make better decisions about technology,” Donny said.
Donny's attitude is that only by leveraging automation can firms eliminate mundane, transactional tasks — and by default, improve workflow efficiency and enhance service value.
In other words, it’s not just about technology. It’s not just about the bots. “It’s about getting rid of lower-end services,” said Shimamoto.
He went on to explain that "the biggest challenge for firms is that everyone is telling them to switch to advisory, but they don’t have time. You find time by automating this transactional processing and data entry work that’s non-value-added.”
Bots are just the beginning. In addition to helping mitigate repetitive, time-sucking compliance tasks, automation (applied effectively) blows the door open to new opportunities wide open. For example, enhancing data and analytics capabilities — skills that have been underutilized in the past.
And while automation is key to elevating processes that get firms to higher advisory work, the historical issues remain the same: 1) time constraints and 2) the desire to hang on to compliance work.
Addressing concerns of compliance work fans
There are still a fair share of accountants who genuinely enjoy compliance work. They find satisfaction in bookkeeping and working with numbers. While advisory services may be the industry's future, it's undeniable that successful firms still need both technical experts and big-picture thinkers.
So then, why should these compliance-focused professionals consider automation?
Donny believes it’s “because compliance is becoming de-commoditized. And when something is commoditized, you compete on price. If price is coming down, you need to make the delivery of that service increasingly efficient. You can’t do that manually.”
This is where compliance and the power of automation intersect. Or at least should…
The transformative power of automation
If you've ever found yourself staring at an Excel spreadsheet, second-guessing your data entry, or spending days tracking down a single error, it's time to consider automation. Similarly, if you've had to expand your team just to handle increased data entry from new clients, automation is the answer to reducing overhead while taking on more work.
The benefits of automation extend far beyond these scenarios, however.
Automation technology cross-references data from multiple sources, ensuring consistency and accuracy.
It analyzes current data against historical reports, flagging any discrepancies or unusual patterns. It streamlines payment confirmations, balance recalculations and even assists in providing financial advice to clients.
And complements and enhances your analytical skills, enabling you to deliver more insightful guidance to your clients.
Automation is letting accountants focus on where they can really make a difference.
The 411 on automation, AI, and machine learning
There's a lot of technical jargon surrounding concepts like automation, artificial intelligence (AI) and machine learning (ML). Let's break these down to help you discuss each more confidently within your firm.
Automation involves using technology to perform tasks typically done by humans. It's not about replacing people with machines, but rather about completing work more quickly and accurately. It’s about elevating humans, not eliminating them.
This approach reduces staff burnout and allows for scaling without necessarily increasing headcount. Most importantly, it frees up time and provides the data to support advisory-focused client interactions.
AI is a broad term encompassing various technologies — including machine learning, deep learning, natural language processing and speech recognition. While these are all examples of AI, it's important to note that AI is not synonymous with machine learning. AI represents a layer of intelligence that enables automation to handle complex tasks.
Machine Learning is a subset of AI that works with structured data (like spreadsheets, databases or tax forms) to create mathematical models for making predictions and decisions. The personalized recommendations you receive on platforms like Netflix or Spotify are real-world applications of ML.
The combination of automation and ML is what's enabling firms to significantly boost their speed and accuracy, fundamentally changing how we conduct business.
What’s the next big evolution?
Automating compliance tasks is just the tip of the iceberg. The goal is to apply AI and ML to advanced advisory services, such as guiding restaurant clients on optimal online ordering and delivery strategies based on comprehensive data analysis. These examples highlight why automation is so crucial. And trust that we can't reach this next level of advisory services without automation at the core.
As we navigate this technological revolution, it's clear that automation isn't just a trend; it's a game-changer that's reshaping the future of accounting. By embracing these advancements, firms can position themselves at the forefront of innovation, offering enhanced value to clients and staying competitive in an ever-evolving industry.