There was a time, in the not-too-distant past, when accountancy and bookkeeping was a never-ending slog of data entry, with accountants having to wade through big stacks of invoices to manually type everything into the accounting system. It was dull, repetitive and unrewarding work that could take hours.
Now, with the emergence of artificial intelligence and machine learning technology, data can be extracted from a pile of invoices in a matter of minutes.
“With technology like Dext Prepare you can take a picture of an invoice and it will process that information automatically, categorise the transaction and then publish it to your accounting software,” says Paul Lodder, vice-president for accounting product strategy at Dext, an accounting software developer. “AI and machine-learning tech solutions are really cutting out all of these repetitive, mundane tasks and doing it for you.”
Lodder calls this a new era of ‘no hands accounting’. Not only does it free up accountants to focus on higher value work, it also reduces the risk of errors.
“When you’ve got that human element and when you’ve got high volume, mistakes creep in,” he says. “You can easily put numbers in the wrong way around If you’re typing quickly. That doesn’t happen when you use technology, the software is reading and extracting what it’s seeing on a document. It can’t get tired and it won’t get distracted.”
With the emergence of artificial intelligence and machine learning technology, data can be extracted from a pile of invoices in a matter of minutes
While the time saved from automating tasks can be used to increase the volume of work finance teams can handle, it can also help companies improve work/life balance and reduce employee stress.
“If you’ve got more capacity, it doesn’t mean you have to suddenly do more work—we’ve just gone through a horrible couple of years, people are exhausted, so you can use that extra capacity to actually just finish early on a Friday and give the whole finance team an afternoon off because you’ve got everything completed,” says Lodder.
For accountancy and bookkeeping firms, tech can help free up more time for business development and building relationships with clients, while also giving accountants the tools to provide more strategic advice and therefore add more value.
“If you’re using technology to process transactions quicker, you’ve got access to insights much earlier than before, which means you may be able to pick up on opportunities or issues and things that are of a concern, so you can have more valuable conversations,” says Lodder. “That’s important because, if you’re not talking to your customers, if a competitor comes along who shows a bit more interest, they may move. So it doesn’t matter what conversations you’re having, it’s the fact that you’ve got the ability to have more conversations that matters.”
Adopting technology also ensures that data is available in real time rather than having to rely on periodic reporting where numbers are likely to be already out of date.
“If your year end was December, but you don’t do your accounts until March, a lot can happen in those three months and you haven’t got visibility in that period because not everything is being processed,” says Lodder.
By using real-time reporting, numbers will always be current so that businesses can make the right decisions at the right time based on accurate data, he says.
“I want to be able to recognise if a trend is forming and what direction it is going,” Lodder says. “I don’t want to be aware of something three months after the event. So up-to-date numbers mean that you’re more forewarned—it doesn’t matter if you’re a finance team or whether you’re working with clients—you’ve got all of that information to hand at any point in time so that you don’t have to make a snap decision based on not having the full picture.”
For instance, if a company wanted to take out a loan, basing that decision on three-month old data risks saddling the company with debt it can’t afford or debt it doesn’t need.
This technology is also allowing accountants and bookkeepers to expand their virtual finance function offerings. In the past, bookkeeping would typically involve a client having to drop off all of their records at the accountant or bookkeeper’s office. Now everything can be done online, streamlining the workflow process and making it more cost efficient.
“Clients don’t need to drop anything off anymore, they can take photos and email documents directly and with open banking, you can now connect the bank account as well,” says Lodder. “Technology is driving the virtual finance function and accountants are now offering their services not just in one small geographic area, they can expand their client base to anywhere in the world.”
With the accounting sector struggling with recruitment and retention issues, technology is also making it easier for firms to outsource bookkeeping work to service providers in countries where fees are cheaper. At the same time, firms may simply want to outsource bookkeeping to create more capacity for accountants to focus on other work.
“In the UK, you could be paying a qualified accountant to do bookkeeping work who is highly skilled and who would be better off actually doing more of the high value work for clients, and you can outsource that bookkeeping work overseas at a much lower cost,” says Lodder. “The technology means the work continues to be real time and, using software like Dext Precision, you can make sure everything is accurate.”
The trend for using automation to make the finance function more efficient accelerated during the Covid-19 pandemic and shows no sign of slowing down even as people return to the office.
“Technology is an opportunity, it’s not a threat,” says Lodder. “A lot of the processing work that is currently being done manually will be completely automated in the future. That doesn’t mean that people aren’t needed though. Technology can’t do everything, but it can certainly replace a lot of repetitive tasks, and that’s how it creates opportunities. If you don’t embrace it, then you risk getting left behind.”
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