Bots are game changers for accounting firms

The accounting profession today is on the brink of another radical change in technology adaptation, thanks to COVID-19. Many of us have written at length about the impact COVID-19 had on practice management, staff communications, billing models and more. What we hope doesn’t happen as we return to the office is also a return to the way things were. Despite the many, many downsides of COVID-19 — and trust me, I know this has been a tough year — one of the biggest silver linings has been that it has forced CPAs and accountants into being true advisors to their clients.

The state of the accounting profession today

During a recent panel discussion with a few colleagues and industry friends, one CPA firm partner joked that if your cell phone battery didn’t need charging at least once a day during the height of PPP and CARES Act guidance, then you weren’t being an advisor. Where we are now is a crossroads: On the one hand, we have the opportunity to finally get out of the weeds and do what we do best, which is to advise. On the other hand, we have the daily manual tasks, data entry and busy work that we can still bill by the hour. One is unfamiliar and a bit scary and full of potential. The other is a known process. It’s safe, but it’s a dead end.

Ten years ago, when I was talking about radical firms, we knew that technology was the way forward. My firm has been fully remote and paperless for years now, and the advances in artificial intelligence (AI) and machine learning (ML) just keep getting better. The pandemic forced every CPA firm to critically evaluate its tech stack in the same way that radical firms have been doing for years now. The difference is, there was no roadmap for radical firms back then. There was no roadmap for dealing with the multitude of changes from the CARES Act and PPP. There is a roadmap to the future of accounting, thanks to advances in AI and ML.

Bots are powering next-gen clients — and accountants

Bots are the game changer. Bots are changing the way that CPA firms manage their workload, bill for projects and offer value to clients. They let us get out of our own way, get out of the manual tasks and data entry, and get back to advising. That’s what we were educated to do anyway, right? We learned about debits and credits and reconciliations and tax laws so that we could take that knowledge and put it to actual use, not to sit in a corner and do calculations and input numbers into Excel, QuickBooks or whatever else your firm uses!

The next generation of clients, and the next generation of accountants, are demanding a switch to advisory models too. Our clients hopefully saw a different side of us during the pandemic: a CPA who worked to understand the laws and regulations to help them apply the specifics to their company, so they didn’t go out of business. Important stuff, right? The next-gen accountants saw that their firms really could go digital and work from home (duh). Technology like bots, AI and ML allows us to look at new opportunities. It’s what our next generation professionals find exciting about our profession. To recruit and retain staff, we need to introduce technology to our team.

Technologists aren’t required

Bots can be scary if you don’t know about them. There is this mysterious aura that people seem to have about new technology, that it’s unattainable, hard to learn and/or hard to scale. In the “old days,” it was true that a CPA practically had to be a technologist to understand how to use some of the tech stacks available at the time. It was intimidating and set a poor precedent for the future. I’ve also seen firsthand the effect that mismanaged expectations can have on implementing new technology. Let me tell you — if you’re expecting something to work 95 or 100 percent the first time, you’ll be disappointed. Technology just doesn’t work like that. You need to find a solution that works for 80 or 90 percent of what you need it to do, and then figure out how to tailor the rest to your situation.

The tech has come so far now that if you can shop on Amazon, you can work with bots. You can train them to do repetitive tasks, look for outliers in the data and reconcile multiple pieces of back-office accounting and bookkeeping. There is no human error. You can take your firm from a bill-by-the-hour, commoditized service provider that delivers tax returns, audits and other compliance to a business advisory partner that bills for value and delivers an experience unlike any other. Guess what? Bots help you do that.

Time is a finite resource

Let’s also consider that there are only so many hours in the day, or in a year. In a typical year, you get about 2,000 billable hours per person; that’s it. How much of that time is spent on data entry and manual, repetitive processes? Time is a finite resource. With bots, you can cut that amount of time almost in half and free up literally half of your year to provide more personalized, consultative service to your clients. Everyone wants to be innovative. But if you don’t have the capacity, it’s hard to be innovative. Imagine being able to love on your clients more and demonstrating how important they are on a regular basis. Get the grunt work out of your firm, and I promise you can make that happen.

I have talked to small CPA firms that have used bots to level the playing field and compete with Top 50 Firms and win work away from the bigger guys. I have also talked to Top 100 Firms that are now considering being the outsourced accounting department for their clients without adding staff. They found a totally new revenue stream because of the added capacity and value they gave to their existing clients.

You don’t have to be a technologist to understand bots. You don’t have to spend a ton of time learning them. Bots fit great with any size firm and any size client, and they allow us to make these radical changes that we’ve been talking about for years. Technology is no longer a differentiator — proactive advisory services are. And the right tech stack gets you there.