Technology is transforming the way that accounting firms do business. The emergence of cloud-based computing, the growth of mobile, and advances in intelligent data management mean that accounting firms have a new set of tools available that can automate and streamline tasks. Industry leaders expect the shift to mobile and cloud-based accounting to not only continue, but to accelerate, and for good reason. The results are in and technology has come up trumps. More than ever, it is essential that accounting and bookkeeping firms determine how they will integrate new technologies when planning for the future.
This is especially true in areas such as data entry and payroll processing that were once extremely labour-intensive. While new technologies promise to save accountancy firms time and money in the long-run, the question remains for some whether to outsource labour-heavy tasks or to invest in the technology to automate them.
Outsourcing requires a lot of research to find the right company to work with. Ensuring the quality of their employees in delivering work that you can present to clients with confidence. Ensuring that you aren’t impacted by a disruptive level of staff attrition within the outsourcing company. Ensuring you won’t experience communication issues and that you can establish reliable, escalation procedures and contingency plans, while ensuring you are adhering to complex data protection laws.
Finally, you will need to know that having made the shift to outsourcing and having grown dependent on it, that it continues to be cost effective into the future. Not to suggest that an outsourcing company would be likely to hike rates unjustifiably, but given that most outsourcing companies are based in countries such as India where inflation is typically much higher than the UK, it is inevitable that they will be unable to hold their rates for long.
While outsourcing companies have thrived in the last decade, global tech investors are betting heavily that it will be technology that will take over into the future. Installing a solution on your desktop or via a mobile app requires little or no advance consideration. You’ll know within hours or days if the given product will work for you or not and growth in the adoption of such technologies are proving that they are working. Cloud based Software as a Service or SaaS solutions tick all the boxes of outsourcing and more.
Given the choice of performing data entry manually in-house, outsourcing data entry to a country with lower labour costs or using a tech solution to automate data entry, firms are increasingly opting for the latter two options. Automating data entry offers several benefits in addition to reduced labour costs. It offers better accuracy, scalable productivity, expanded reporting capabilities and greater security. For a firm that is growing quickly, it is essential to ensure that any processing solution you invest in, can also scale with your company and meet your future needs. With the advances of cloud based computing infrastructure, a cloud based solution can quadruple its server processing capacity in seconds where an outsourcing company cannot.
So how much does automation software cost to purchase, set up, and maintain and how does that compare to the labour cost of manually entering data in-house or outsourcing? Until just a few years ago, document capture software was expensive, and often sold with a significant up-front cost followed by extras for additional support and training. However, prices have become more competitive as more software providers emerge in the space. The most cost effective option will usually be those which are SaaS based and don’t ring-fence your usage per client per company - i.e. ones that let you purchase a pool of credits that you can then use across all of your clients. This can save as much as 50% on your bill.
Compared to outsourcing firms, technology solutions offer more operational efficiencies for each pound of investment. For instance, in automating the capture, analysis and posting of routine documents including bills, invoices, receipts, credit notes, sales invoices, and even bank and credit card statements. With regard to invoices, the right solution can capture full line item details including product descriptions, quantity of units and unit price. Certain tools have in built intelligence which remembers how you categorise different parts of a given bill to different expense/nominal accounts. For invoices from foreign suppliers, they can work out the FX rate on the invoice date back to your company’s base currency. They can even match invoices to purchase orders for integrated bookkeeping solutions. Finally, having then posted the data to your accounts software, the solution can act as your online filing cabinet, storing your documents for as long as you need - retrievable at the touch of a button.
Technology solutions have steadily replaced the outdated outsourcing model in recent years. Whether it be for accounts payable, expense management or data processing where manual data entry has traditionally been relied upon, technology solutions are eating up market share. It will increasingly be the only option for those firms looking to capitalise on innovation to support the growth of their business and better serve their customers.