Published by Smithink
Written by David Smith on 8 February 2019
There has been a mountain of press, blogs and videos predicting that the accounting profession is going to be replaced by silent machines sitting in data centres. Artificial intelligence, big data, data analytics, machine learning etc are all going to play their part. I have read a ton of material and in doing so it became clear to me that few people have any idea what these technologies will actually be doing and how these changes will come about.
It is also clear to me that the accounting profession is not going to disappear anytime soon. Anyone who thinks they can automate machines to deal with the complexities of Australian tax legislation has rocks in their head (maybe in 2030 that might be a different discussion but not now). That said, it is also clear that fundamental changes are afoot as these new technologies take hold. The question is – what will those technologies being doing and how will their implementation come about?
One thing is also clear to me in my 45+ years in the profession. When you look at how work is done in an accounting firm there is a lot of repetition. Standard workpapers, standard processes, document templates, and consistent outputs are all examples of this repetition. Of course, it’s also not that simple as many firms struggle to achieve consistency and compliance with their processes and standards. But it is here in this “engine room” of an accounting firm that we can see the opportunity for robotic process automation to play its part in slowly but surely taking these standards and fully automating the process.
Many of you would know of ATO Paperbuster (now part of the CCH iFirm Suite). It was an early example of RPA – taking ATO correspondence and automating the filing and generation of related client correspondence. Now with information being directly accessible from the ATO portal and open application programming interfaces (APIs) by the tax software suppliers such as Xero the process can be taken a lot further with automated checking with the tax application, more sophisticated rules-based document generation dealing with varying circumstances, automated filing and communication with the client based on their platform of choice.
But let’s get down further into the guts of an accounting firm. A lot of time and cost is spent on workpaper preparation. How can this be automated? Slowly but surely small business software suppliers such as MYOB and Xero have been working to generate workpapers from the small business ledger. But that’s only part of the story. Workpapers need supporting documentation. Being able to batch import predefined sets of client ledger reports is an important automation tool.
And let’s not forget email. The scourge of the 21st century (although better than the 1980s when life was spent with a telephone glued to the side of one’s head)! Many emails are for pretty trivial stuff – what’s my TFN? I need a copy of my accounts. Here’s the information you’ve asked for. When will my work be finished? Can I make an appointment? It is perhaps here that we will see the biggest impact of RPA in the short term. Imagine a system that can read these emails and determine what is needed, automate the reply, attach required information and file everything away. In the short term you may want to review what the machine is doing but over time, as confidence in the tech grows, you may let it do its thing in the background while you get on with more important tasks.
These processes could have their own alarm systems built in, too. Imagine if in reading emails, the machine can interpret whether a client is unhappy with your service and then automatically bring it to the attention of the practice’s client owner to address. A quick response in such circumstances would impress the client and reduce the risk of client loss. Now that’s tech really working for you.
How far could this go – this “spooky” reading of documents and dealing with discovered issues automatically? Perhaps the system could determine that required supporting documentation is missing for a workpaper. It might find that information in the client’s cloud storage. Having found the required documents, they might be automatically imported, named and filed following practice standards, and crosslinked to the workpaper with financial amounts compared and verified. It is not a great leap to see this happening.
Does this exist today? Perhaps surprisingly to some, it does. Tech start-up www.fyidocs.com has developed a cloud-based document management system specifically for accountants that incorporates robotic process automation and can perform the email and other automations outlined above. This is the sort of tech you need to keep your eye on.
Document management is key. To deliver real breakthroughs, process automation technology must be deeply integrated with your documents, so that they can be interpreted and acted upon. Make sure you keep this in mind when you’re considering your next document management system.
Many fear that technologies such as robotic process automation will be the end of the profession as less labour is needed for many tasks. But the reality is that attracting and retaining talent today has never been harder, partly because kids are not attracted to the repetitive nature of work in an accounting firm. So in the end, RPA will actually be liberating – freeing time to improve client engagement and analysis and attracting new people to the profession who are not interested in processing data.
It’s a brave new world – start your journey today!