Tax and Accounting Practices Need to Consider a Journey of Technology Transformation to Avoid Falling Behind

By Neil Parsons, Managing Director, Wolters Kluwer Tax & Accounting UK

Accountancy practices across the UK and beyond are keen to create more efficient processes. Technology is driving and enabling a lot of this change, along with the increase in data processing power and widespread moves towards cloud-based solutions. More than ever, practices looking to help drive process improvements by removing human labour from manual, repetitive processes in order to enhance compliance, and reduce risk.

To accomplish this, many tax and accountancy practices are looking at emerging technologies that have the potential to drastically automate and alter business performance, including Robotic Process Automation (RPA), Machine Learning (ML), Natural Language Processing (NLP), Cognitive Automation/Artificial Intelligence (AI), and Blockchain.

In this article, we will specifically explore Intelligent Automation (RPA & AI) and will discuss what practices looking to get automation into their technology transformation journeys should consider, together with the end benefits they can expect.

What Does Accountancy Automation Potential Look Like?

Robotic Process Automation (RPA) stands out as software technology that automates repetitive and standardised business processes. RPA involves deploying software robots, also known as bots, to perform tasks traditionally carried out by humans. RPA operates by mimicking human interactions with software interfaces, and it can execute actions such as data entry, data extraction, and transaction processing.

While some practices have been wary of introducing RPA due to a fear that AI will make humans redundant, the truth is that AI will assist practices by taking away manually repetitive tasks, allowing accountants to focus on more value-added activities like advisory services.

For example, FD Intelligence reports that, on a recent project, it was able to save one client 11,200 hours a year. That’s 466 days – the equivalent of two full-time employees if those employees worked 24/7 and 365 days a year. The company reported 4,000

hours saved on supplier statement reconciliations, 5,000 hours saved per year on daily bank statement reconciliations, and 2,200 hours saved per year on daily revenue uploads.

Despite many large enterprises paving the way with RPA, it’s not just large firms that will benefit. In Gartner’s Worldwide RPA Software Spending report, it was found that and-user spend on intelligent automation is set to increase by 17.5%, by 2024, and the increased visibility and availability of automation tools is making them more accessible to small and medium firms. Gartner also predicts that by 2024, organisations may be able to lower operational costs by 30% by introducing intelligent automation.

The success of RPA relies on applying it to the best business use cases. These processes are often relatively repetitive in nature, with several manual elements that may span multiple systems. For instance, data entry, invoice processing, and order fulfilment can be easily automated as they involve rule-based actions that require minimal decision-making.

Here are a few examples of where RPA & AI can be successfully implemented in tax and accountancy business processes:

Tax Compliance and HMRC Submission: automation can assist in preparing and submitting tax forms accurately and on time, while also tracking changes in tax regulations and ensuring compliance.

Payroll Processing: automation is being used successfully to calculate employee wages, taxes, and deductions, handling these calculations accurately and efficiently. Automated systems can also generate pay stubs and direct deposits, reducing the need for manual data entry.

Client Onboarding: automation can simplify the process of gathering client information, verifying identities for anti-money laundering compliance, and creating engagement letters. Chatbots and digital forms can help to collect the necessary onboarding details from clients.

Billing, Invoice Processing, and Reconciliations: automation can generate and send invoices, track payments, and reconcile accounts, reducing the chance of errors and speeding up the billing process.

Financial Reporting: automated systems can compile and analyse financial data from various sources, enabling the creation of accurate and comprehensive financial reports. This can save time and improve data accuracy.

Employee Onboarding and Offboarding: automation can help manage the administrative tasks associated with employee onboarding and offboarding, such as setting up accounts, granting access to systems, and processing necessary documentation.

To maximise the benefits of automation, practices should follow best practices consistently. This means starting with accurate, clean data, and considering a staged approach to the implementation of automation. Start with a few processes and gradually expand automation efforts. This approach can allow for steady learning and optimisation, while also minimising potential disruptions.

Is accounting automation right for your firm?

Accounting automation isn’t going to make advisors obsolete anytime soon. However, the accountant of the future will need to have a blended set of accountancy and technology skills to make the most of technologies like RPA, and to harness the power of data to provide better and additional services.

By leveraging automation and keeping humans in the loop, practices are in a great position to minimise administrative tasks and engage more meaningfully with clients. This can lead to improved client relationships, a better understanding of their needs, and increased business opportunities. The time and resources saved through automation can also be directed toward recruiting new talent, expanding service offerings, and exploring new markets. Some firms may use the time savings to focus on other strategic initiatives, such as branding, marketing, and innovative service development.

Here’s to the Future

Over the past two decades, the transformational impact of technology evolution has been huge, and we’re now moving into a period where automation technologies are beginning to demonstrate an exponential rate of improvement. The corporate demand within practices to identify process improvements and really drive operational quality with automation is becoming critical, especially against the backdrop of many businesses striving to do more with less.

Overall, we’re set to see automation dramatically enhance operational efficiency without proportionally increasing resources, making for happier clients and employees, as well as sustainable growth.

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