The definitive guide to process automation for accounting firms

Nobody doubts the potential for technology to streamline processes and eliminate mundane tasks. But where do you start? What technology, exactly, is supposed to get you to this efficiency? 

The challenge is how to navigate all the options, simplify your workflows and apply automation. 

In this article, you’ll learn how firms with well-defined processes can automate tasks and streamline their operational efficiency.

What is process automation?

Process automation is the use of technology to streamline the repetitive but necessary functions of your business. The best processes to automate are those that are especially time-consuming, repeated consistently and standardized across your company.

For your accounting firm, that might include:

• Collecting Client Supporting Documents: Hounding busy clients to provide the documents you need to move forward is often one of the most frustrating aspects of an accountant’s job. Automating that process frees up hours spent drafting emails and tracking responses, removing that stress from your workday forever.

• Administrative Tasks: The very nature of accounting firms tends to more data entry and information flow. This means everyday tasks that leave the door open for costly human error.

• Workflow Updates: Re-assigning tasks, notifying team members something is ready for them to begin or review, updating workflow statuses, setting up a recurring job are all examples of workflow updates that no longer need to be completed by a human. 

• Client Reminders: Clients often seem to have better things to do than worry about their upcoming tax deadlines — until the IRS sends out a letter detailing their penalties and interest. You can automate your deadline reminder emails and avoid consistently nagging those chronically late filing clients each quarter.

Accounting process automation can be applied in nearly endless ways, but what does that mean for your firm? Next, let’s take a look at why implementing automation can be such a game-changer for your business.

The importance of process automation for accounting firms

The need to incorporate technology into business functions has come to a head in 2020.

For many, COVID-19 has all but eliminated face-to-face communication. Online interaction with your clients and within your teams is the new normal.

Accounting firms have to be able to keep up with modern demands, and accounting process automation is the key to boosting your firm’s output and capacity.

Automate low-level tasks to focus on providing value

Accounting process automation does more for your business than streamlining mindless and repetitive tasks. Its real power lies in creating more freedom for your staff to focus on delivering meaningful value to your clients. 

You can exponentially increase your firm’s ability to finish projects on time and under budget, as well as create a unified structure for your team to communicate and collaborate on work.

• Improve client relationships: Automation can streamline the process of collecting, organizing and storing the data you need for your engagements. Instead of having to hassle a client for documentation, you can spend time checking in with their needs and developing a more productive relationship.

• Efficiently manage your remote teams: Effective communication boosts team morale and productivity. Now that you no longer have the ability to gather your team together in a conference room, you’ll need to find other ways to monitor progress and coordinate your efforts. Having an automated workflow can eliminate the need for regular meetings or manual status updates.

• Increase your whole team’s capacity: Automating your accounting processes saves your team’s time and energy for what matters most. Even if you only cut down each team member’s 30 minutes (per day), it adds up to over 10 hours per employee each and every month (like getting an extra work day from each member of your team).

Automating your accounting processes instantly frees up time for you to focus on the heart of your business. Next, let’s discuss how you can find where automation belongs in your firm and how you can implement those processes today.

How to automate your accounting processes

To start automating your accounting processes, first define the core functions of your company that you’d like to improve. These are the heart of your business and most likely revolve around your client deliverables. 

A tax firm’s most important core function is to complete and file returns, while auditing firms are most concerned with completing audits.

Second, identify the bottlenecks that limit your output for each core function.

The best way to find these bottlenecks is to outline your current workflow system and look for any problem areas. Assess each step and note how long they take, who needs to be involved and how much of a headache they are for your team.

Make sure to keep your staff involved in this analysis. They’re more involved in the day-to-day activities than you are as a business leader. Identify their sticking points and make sure to focus your automation efforts there.

How to remove the bottlenecks

Once you’ve mapped out your workflow, and determined bottlenecks, the next steps are removing constraints to create efficiency. 

Before you go out looking for new tools, start with your current set of tools and either browse their website or ask support if they can help. 

In many cases, firms are only using a fraction of their tools’ capabilities. For example, if you use Ignition for Sales and Proposals, but are having problems with payments. You can add that functionality from Ignition and solve the problem without adding software. Or if you use Karbo for workflow and collaboration, you can also utilize its time-entry functionality.

If your current set of software doesn’t provide any answers, you can browse popular accounting app marketplaces. These marketplaces provide a list of apps that can be used and break down the functionality of each.

And you can also use a tool such as Zapier to connect many of your existing apps together, using custom-built integrations that don’t require any coding.

The answer you are looking for has most likely already been answered by someone. The best idea, before adding new tools, is to ask for help. For example, Karbon has built out workflow templates with best practices for accounting firm processes. 

A workflow automation example

Let’s run through a quick example, using a bookkeeping firm that provides monthly compilations for its clients.

In this scenario, a core function to target would be the creation and delivery of each client’s monthly financial statements.

With that established, let’s outline the current engagement workflow. Let’s say it looks something like this:

• At month-end, your staff accountant emails the client for their bank statements and supporting documents.

• The client responds a few days later with the information.

• Your staff accountant updates the client’s books and creates the financials.

• Financials are emailed to the department’s supervisor.

• The supervisor reviews the financials.

• Supervisor then sends the financials up to the partner for sign off. 

• The partner emails the financials to the client.

Now, how could automation help this company? To find out, you’d analyze the bottlenecks at each step. 

Perhaps the client takes too long to respond to the staff’s email and multiple follow-ups are required to get a response. Maybe the email from the manager to the partner gets lost in a flood of client communication and sits for days longer than necessary.

You could solve both of these issues by automating the communication between each party using Karbon.

On the first of every month, an automatic request could go out to each client, followed by a schedule of daily reminders until a response is received. And to streamline the review process, you could use a separate notification system for client emails and internal communications.

Start today

The rapid advancement of technology is never going to eliminate the role of the accountant. There’s no need to be afraid of it. Instead, use it to empower your firm, eliminate menial tasks, and focus on the strategic and tactical advice that your clients so desperately need.

The automation of accounting processes has never been more available or more efficient. Now is the time for your business to refine their systems and evolve.

Take a look at the bottlenecks in your internal processes today and start finding ways to put your team’s time and energy to better use.