10 Reasons Why Accounting Will Be Automated: Part 2 - Improved Service for Our Clients

Automation is reshaping businesses by boosting productivity and accuracy, but its true value lies in improving client services. This article explores how firms can turn these internal gains into clear client benefits, particularly through the lens of accounting and finance.

Automation investments among SMEs have skyrocketed by over 1,000% since 2019, with accountants at the forefront, investing heavily in AI, automation, and other technologies.

We'll cover:

• Converting Internal Gains to Client Benefits: How SMEs and accountants are driving the automation revolution.
  

• Planned vs. Selective AI Use: Why a strategic approach to AI and automation implementation yields better outcomes.
  

• Transforming Work Practices: How structured AI use enhances productivity and client service.
  

For accountants, business owners, or anyone interested in technology's potential, this article provides valuable insights into leveraging automation for growth and client satisfaction. Read on to learn how to stay ahead with these advancements.

Translating Internal Gains to Client Benefits

Automation is booming, especially amongst small and medium-sized enterprises (SMEs). SME investment in automation is up over 1000% since 2019.

Accountants (and others in the financial sector) are at the forefront of this trend

• 71% are investing in Artificial Intelligence (AI), and

• 63% are investing in other forms of Automation.

But: How do we know this staggering investment (£60.3 billion in 2024) will pay for itself? What is best practice?

Learnings from AI Roll-out So Far

AI is so new that until recently these answers had to be drawn from lab research. Fortunately, in late July, Microsoft published a summary of research on how AI is being used in the wild: What works, and what doesn't.

Here’s what you need to know:

• AI is Here to Stay: The survey found "widespread use of unsanctioned AI tools amongst employees [with] at least 78% [of respondents using] at least some AI tools not provided by their organisation." As such, it's unrealistic to believe your firm can put AI to one side for now. Instead, it's crucial to seize the initiative and plan how AI should be used in your firm.
  

• Selective AI Adoption: Unplanned AI usage tends to be selective, and thus less effective. About 29% of workers are 'power users,' saving over 30 minutes daily by regularly experimenting with AI. However, the people who would benefit most from AI are often the last to use it. This is because "the largest [positive impact from AI] was on novice and low-skilled workers, with very little effect on experienced or high-skilled workers."
  

• Planned AI Implementation: Structured AI deployment is far more effective, ensuring safe usage and widespread participation. It allows 'power users' to share their best practices, and it allows the team to optimise their combined productivity.
  

• Organisational Transformation: AI has an "even greater impact [when] individuals and organisations recalibrate their work practices [collectively]". This is important because "the presence of AI may have cascading effects, not just affecting productivity on a given task, but also changing which tasks people choose to do." Without a coherent plan to capture and redirect the productivity gains, these gains may get squandered on low-value tasks.

If the goal of automation is to provide a better service to your clients, then its implementation has to be planned so that the incremental gains get passed down the line, ultimately to the client.

When thinking of client benefits, there are three levels we should aim for:

Level 1: Enhanced Financial Management

The obvious client benefit from accounting automation is improved financial management. Faster access to information in more accessible formats, and greater accuracy, allowing senior accountants to provide insights more quickly.

The goal is near real-time reporting, enabling clients to react swiftly to opportunities and threats. Near real-time reporting can result in more comprehensive scenario planning, leading to faster efficiency savings and deeper exploitation of opportunities.

An important aspect is increased accuracy, which is required to build our clients' confidence. When a senior accountant presents compelling financial evidence to support decisions, senior management has the confidence to act decisively.

Level 2: Time for Strategic Initiatives

Traditionally, accounting has been compared to looking into a rear-view mirror. It is accurate for determining where the organisation has been but offers little on the road ahead.

Near real-time reporting combined with intensive scenario planning shifts this picture. With these tools, the finance function is empowered to contribute actively to strategic discussions, "to secure the best immediate outcome while also preparing suitable alternative action plans," and importantly to set realistic goals, targets, and milestones.

The ultimate goal is to move beyond the past and even immediate outcomes and to instead help the business owner look ahead 18-24 months.

• This supports a more comprehensive view of seasonality.

• This allows the business owner to detect and then model emerging trends.

"Modeling" is the important word here. Having a vague idea of the direction of travel is a start but planning is much more effective if specific outcomes are predicted, specific reactions are considered, and the financial impact of each is calculated.

Step 3: Compliance Confidence

Strategic planning goes hand-in-hand with regulatory compliance.

The first step in compliance is understanding what is required. This means establishing policies and procedures to identify and mitigate risks to the organisation.

Automation plays a key role here by standardising and codifying processes, such as onboarding procedures like anti-money laundering (AML) checks. Automated processes boost efficiency and accuracy, easing the workload for both clients and staff while maintaining strong compliance.

Automated compliance checks can help quickly separate routine activities from potential issues, greatly reducing the compliance burden. Since nearly every organisational activity leaves a financial trace, accountants are uniquely positioned to offer compliance services beyond traditional financial regulations.

The General Data Protection Regulation (GDPR) emphasises "Privacy by Design," meaning compliance should be integrated into the core IT systems. A similar approach could easily be applied to financial systems and processes.

Other tax jurisdictions have already started moving in this direction. In Spain, SII AEAT involves the near real-time submission of invoices to the tax authorities. A key objective OF SII AEAT is to control tax fraud.

At the moment, SII only applies to the largest companies; however, Spain is rolling out a B2B e-invoicing mandate to all business taxpayers. Although HMRC is not currently planning an e-invoice requirement, these sorts of developments may be inevitable.

The second compliance level involves planning for future regulatory changes. Simply meeting compliance requirements can often overlook the strategic advantage these regulations can offer as new industry barriers to entry.

Even non-financial regulations leave financial footprints, so detailed financial models can assess the costs and benefits of various compliance strategies allowing for a more nuanced discussion.

An example of this approach arose when the Consumer Contracts Regulations introduced the requirement to offer a full refund to customers who want to cancel within 14 days of an online purchase. Although this refund was a requirement, a number of companies turned it into a competitive advantage by advertising a "money-back guarantee" that went slightly beyond the legal requirements.

The third level of compliance is about shaping future regulations through public consultations and lobbying for changes to proposed laws. This proactive approach is complex, but manageable with robust financial models.

Conclusion for Automated Accounting

Automation is reshaping how firms operate, offering the potential to boost client satisfaction and business growth significantly. By strategically implementing automation, businesses can enhance financial management, free up time for strategic initiatives, and improve compliance. The key is ensuring these internal gains translate into real benefits for clients.

Automation allows for near real-time reporting, empowering clients to react swiftly and plan proactively. It equips accountants to provide strategic insights, turning compliance challenges into competitive advantages.

Now is the time to embrace automation. Assess your current processes and identify where automation can make a difference. Engage your team in planning a structured AI and automation strategy to maximise client benefits.

If you’re ready to explore how automation can enhance your business, contact us today. We’re here to help tailor solutions that meet your specific needs and drive your firm forward.

By Eric Feltin

Patent holder, multi-startup founder, and non-executive director (NED), Eric loves building things. His current passion is automation in the accounting industry. He is founder of Claridian, a company transforming small accounting firms with tailored automation. Boosting productivity. Increasing accuracy and consistency. Freeing up time to focus on strategic client work.