Continuing your practice automation journey (an intro to automation, part 4)

by
Keir Thomas-Bryant
September 6, 2022
A stack of notecards on a desk, with the top one reading "Automate what you can"

Welcome to this fourth instalment in our five-part series looking at introducing automation to an accountancy practice.

In the first instalment, we looked at the little-seen benefits of automation for accountants and finance professionals. In the second instalment, we looked at how one person can be an effective advocate for automation within their practice. In the third instalment, we looked at pragmatic steps to be taken when implementing automation in a practice.

In this fourth instalment, we look at how the automation journey can be continued beyond the basics. How much of the work you do as an accountant can be automated? 

Here’s what we discuss:

Automating accounts payable

We’ve come a long way since the days when digitising your accounting simply meant an electronic version of your ledgers.

Making use of automated features within your accounting software is one of the lowest-hanging fruits when it comes to accounting.

What's the technology?

Modern cloud accounting software lets you connect to your bank, so that there’s a constant feed of transactions. This means  always having accurate, up-to-the-minute data.

These transactions can then be reconciled against your accounts payable, so that you always have an equally up-to-date view of the cash flow.

Even better, you can automate this using bank rules—criteria you define and that are applied to incoming bank transactions. For example, a rule might say that £300 received from a certain bank account number should always match an invoice for £300 sent to a business you know to use that account.

Rules can be reused across businesses and, if you’re an accountant, across many different clients.

What’s it used for?

  • Dramatically speeding up periodic bank reconciliation.
  • Always ensuring there’s knowledge of the true cash flow situation.

Smart assistants/chatbots

Given that perhaps 50% of queries directed to accountants from clients are on the same topics, efforts have been made to add-in some automation.

Enter the world of the chatbot, perhaps more accurately described as the smart assistant.

What's the technology?

Smart assistants aim to let people use natural language queries to achieve something. When they work well, it should be just like asking a human to do something, or to answer a question.

There are many different kinds of smart assistant. At the more sophisticated end of the spectrum are tools on our mobile phones, such as Apple’s Siri or Google Assistant.

Google’s experiment LaMDA (Language Model for Dialogue Applications) is an example of what we’ll be using in just a few years’ time, and was recently mired in controversy when one of Google’s own engineers suggested LaMDA might’ve achieved sentience (It hasn’t—it’s just very, very good at pretending to be human).

Several experiments have taken place using smart assistants in the world of accounting. Sage offers a smart assistant across some of its products, like Sage Intacct. Initially named Pegg, this allows users to easily input queries such as checking their ledger balance, making a note of purchases, and so on.

In the US, AskyMyUncleSam allowed people to type tax queries into a chatbot window and get instant replies.

Arguably the most use of chatbots/smart assistants has been in marketing, where they can be used as the first line for client engagement. Several services allow you to easily create chatbots for use on websites, within chat windows, or to be deployed within instant messaging services such as Facebook Messenger.

It's still early days for chatbots/smart assistants in the world of accounting, but this remains a very promising and interesting area that could be revolutionary.

What’s it used for?

  • First line of response for client engagement on websites and social media.
  • Easy access to accounting details without a knowledge of how accounting software works, or even the technicalities of accounting, such as what ledgers are.

Automating bill collection

Getting money from clients can be a pain.

Client payments are typically due once certain dates have passed (e.g. compliance work done prior to 31 January) and are usually for smaller fixed amounts that the client is aware of ahead of time.

If all the details are known ahead of time, and the time/date can be predicted, this is something ripe for automating.

What's the technology?

You will already be aware of the tool we’re talking about: Direct Debit.

For example, if you charge £250 for preparing a basic Self Assessment tax return, then requiring the client to sign-up for a Direct Debit for that amount, to be taken on 1 February each year, is hard to argue with.

Similarly, quarterly fees for preparing VAT returns can be scheduled in an identical way.

If you’ve looked into this in the past then you may have been put off by the extensive rules and regulations required to get the all-important AUDDIS (Automated Direct Debit Instruction Service) status with your bank.

However, online services like GoCardless make it significantly easier to manage. Yes, there’s a charge, but this will be far less than wasted time chasing payments—and you can protect your cash flow at the same time.

Such services even feature widgets you can implement on your website that collect the required details and mandate as part of your client onboarding process.

You’ll still need to be aware of some rules, such as the requirement to notify customers before each Direct Debit is taken. But, again, this can be automated via automatic bill delivery.  

What’s it used for?

  • Promptly collecting regular payments—even if the amount of the payment varies.
  • Keeping cash flow in your practice humming along without the need to check things too often.

Automating everything else!

Many accountants use Visual Basic for Applications (VBA) within Microsoft Excel. Sometimes referred to as macros, these snippets of code are typically used to manage data—moving it from one place to another, for example.

Less well known is something that’s effectively Microsoft’s cloud-enabled version of VBA—Microsoft Power Automate.

Put simply, if data exists online then you can probably automate the processing of it in some fashion using Power Automate.

What's the technology?

Power Automate lets you “streamline repetitive tasks and paperless processes” (to quote Microsoft). In other words, it’s again about managing data but on a much wider stage compared to VBA. This includes data within files and pretty much anywhere data can be found online. Power Automate also works anywhere Microsoft technology is found, including Office 365 applications in the cloud.

The technology’s original name was Microsoft Flow, and this indicates how you create the automation. It’s all about getting one thing to happen after something else, and this is typically done by clicking and dragging actions into something akin to a flowchart. Apps and data sources are connected together so the output of one flows into the next.

If this all sounds too complicated, then comparing it to the similar service called If This Then That (IFTTT) might help explain the fundamental principle—you configure it to do one or more things once something else occurs.

What’s it used for?

  • Scheduling tasks, such as the creation of regular reports that grab the latest data from various places.
  • Processing files when they appear at a given location (e.g. OneDrive/Dropbox folder, or email)—such as getting a notification, or even extracting data from the document and inserting it elsewhere.

Conclusion: Automating as much as possible in a practice

While the suggestions mentioned above deliver a competitive advantage to accountants and the practices they work in, progressive accountants are already looking at even more ways to introduce automation by using tools like practice management software, or customer relationship management (CRM) tools.

In other words, automation is an ongoing journey. As machine learning and artificial intelligence progress, there’s likely to be decades more of improvements to the way we all work. To remain competitive is to keep abreast of such developments.

In the fifth and final instalment of this series, we’ll look at how automation can be sold to clients in order to dramatically improve their accounting admin—and the work you do for them.

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