The digital landscape is changing at unprecedented pace. Alongside the ubiquitous rise in cloud computing, mobile devices, social media, and big data analytics, the recent developments in AI are transforming the whole spectrum of automated accounting capabilities from bookkeeping, to tax preparation, audit support, fraud detection - and everything in between. So it’s perhaps not surprising that the vast majority of accounting firms are already someway along the path to digital transformation.
Nowadays, failure to embrace digitalisation puts firms at a disadvantage, leading to reduced efficiency, lower levels of client and employee satisfaction, and challenges with recruitment and retention of team members. To stay relevant and competitive, a digital strategy is now a business imperative.
Yet the reality for many is that they are barely scratching the surface of what digital has to offer. As a result, firms are missing out on significant opportunities to dig deeper and dramatically improve the way they operate and support their clients.
The key to unlocking the full potential of transformation, is to understand your firm’s level of digital maturity, and always strive for the next.
So what does a ‘transformed’ firm currently look like, and how can it be achieved?
The digital transformation ‘blueprint’
In digitally innovative accounting firms, you would be pushed to find paper - anywhere. All files, correspondence and notifications are digital. Unnecessary manual data entry is banished, with receipts, invoices and other financial files all automatically fetched and categorised from platforms into accounting software. Records are retrieved, sent, reviewed and signed electronically. Accounting workflows are seamless because backend processes are too: holidays, sick days, flexible-working arrangements and time-tracking are recorded, processed and approved, and workflows are updated instantly for embedded efficiencies.
Meetings increasingly take place virtually. And digitally savvy, often geographically dispersed, fee-earners have become proactive advisors, offering virtual FD services and checking in with clients to advise in real-time. Everyone in the firm has excellent working knowledge of the business software and apps in use, and there is a practice-wide desire to embrace the latest technical advances the world has to offer - to ensure the evolving needs of clients and stakeholders are continuously met.
Common transformation pitfalls
If the blueprint is your firm’s goal, but your digitalisation efforts have so far failed to deliver as anticipated, the chances are, it’s a result of one or more of these common pitfalls:
- Not investing in researching and implementing the right-fit digital solutions
- Trying to replicate traditional processes using digital tools
- Too much focus on compliance as the driver
- Perceived (and often actual!) low return on investment
- Poor stakeholder engagement of internal staff, clients, or both
- No time to train staff and/or clients
- Not enough focus on measurement and meaningful KPIs
- Low visibility of digital change and the associated benefits
- Lack of senior accountability
Senior accountability - and bandwidth - is key to driving change
Firms that are serious about optimising their digital strategy are now specifically recruiting for a cloud accounting specialist, cloud champion, tech advisory manager, digital solutions expert - or even digital partner.
Crucially, these professionals need to combine accounting knowledge and skills with tried and tested digital improvement strategies. Just as importantly, they need the seniority and/or influence to drive significant change to be effective and accelerate the realisation of benefits. They also need the bandwidth.
However, this often requires a shift in perspective regarding the importance of fee-earning.
It could be that this person is 100% non-chargeable, to focus on digital strategy. Although maintaining a small portfolio of clients, helps keep a finger on the pulse of opportunities to improve, and get feedback on new solutions and processes from a user group. Whatever the split of this person’s time, ultimately they need the seniority to affect change, both internally, and externally with clients.
Getting clients onboard
There are numerous advantages for clients who embrace their accountant’s digital know-how. And it pays dividends to invest time in showing clients how digitalisation will result in greater efficiency, accuracy and insights, for their business, leading to better decision-making and financial outcomes.
Beyond education, it’s also worth taking the opportunity to explain how you will help clients achieve the benefits by:
- Delivering training and support: showing them how to use software and processes saves so much time and heartache in the long-term.
- Providing incentives: offering additional - or premium - services to those who use technology.
- Making it easy: recommending user-friendly software and being on-call to support through the entirety of their adoption process.
- Leading by example: ensuring everyone in the firm is familiar with software and processes to demonstrate the firm truly believes that the technology is worth investing in.
The power to change everything through automation
Often digitalisation starts with automating the accounting firm’s most time-consuming tasks such as bookkeeping, accounting, invoicing and client communication.
Of course, the opportunity doesn’t end there. As well as automated accounting and pre-accounting software, best-of-breed automation is also available to digitalise every function the firm needs to operate, including:
- Document management software
- Communication tools
- Time and expense tracking software
- Virtual meeting software
- Finance systems
- IT automation systems
- HR systems
- Sales automation software
- Marketing automation platforms
- Customer service automation systems
The tools that make up the firm’s tech stack will likely change over the course of time. So easy integration between the chosen solutions is vital, and should be a requirement for any new technology deployed by a firm.
Digital maturity = braver decision-making
Sometimes, the strategy deployed does not result in successful/fast enough digital adoption. The firm then has difficult decisions to make about whether it needs to further change its systems, processes and team training - or direct employees/clients to an accounting firm that is at an earlier stage of digital transformation. After a certain point on the digital journey, often the only way forward is to make braver decisions and answer the big questions, like, is it time to:
- Make the transformation lead fully non-chargeable to focus their time on digital strategy?
- Only onboard clients if they are prepared to embrace your systems and processes?
- Specialise in a few select systems or brands?
- Deploy a new talent strategy?
- Update the pricing model to reflect service changes?
- Reposition as a digital business with a digital service offering?
The way in which a firm is able to approach these big decisions depends on its level of digital maturity and whether the partners can trust what their data is telling them about team and client performance at any given time. In most cases, the deeper the digitalisation, the better the insight and the braver the decision-making process.
High-quality, complete and real-time data sets are now achievable for most clients, with very limited manual lifting. Automated data processing and checking are saving practices up to a staggering 40% of the time previously spent manually retrieving, reconciling and reporting on clients’ data. Mistakes are also much easier to detect and correct when data is collected, extracted, processed and reconciled automatically.
This automation all adds up to improved recoverability, as well as ‘more hours in the day’, every day, to dedicate to other things. As a result, firms are now finding they have decisions to make regarding what to do with the time they have back. For example, offer more value to clients, or nurture a healthier and happier team by alleviating stressful deadlines, and/or manage the age-old problem of overwork? With the UK shining a spotlight on mental health and wellbeing in the workplace, increasingly firms are realising that putting ‘people before (more) profit’ is not only the right thing to do, but also leads to better long-term business outcomes.
As a decision-maker in your firm, you may choose not to reinvest the time saved and the ROI generated from adopting digital solutions, back into the business. You may want to give the time back to your team. Digitalisation does not mean doing more work. Instead, it enables you to accomplish the same tasks in a more efficient, expedient and productive way.
Ultimately, digital transformation never stops as there will always be opportunity to refine automation to get deeper and faster insights, and take it to the next level. The key is not to resist the changes it brings, but embrace them. As my colleague, Tax Expert Paul Aplin OBE puts it:
“We’re on the cusp of a revolution with the advances in generative AI. The speed of change - and its scale - is staggering. Roles are changing, and changing quickly. And the harsh reality is that if people don’t embrace these changes, they risk being out of a job.”
