There is little doubt that the methodologies available today in the world of bookkeeping and accounting is vastly different than it was 40 years ago, prior to the advent of the PC, and in the last 10 years alone, there have been significant steps made in automating the processes.
The start of the automation was probably the bank feeds into the accounting software.
Machine learning automates much of the analysis work, but machines lack the huge human advantage of “common sense” where something is not quite “right”. Analysing and interpreting the figures is also very much a manual process. Where the automation comes in is helping to ensure the underlying data is more up to date, and more consistently coded.
Data extraction tools were the next big area of automation – extracting information from scanned images, photographs or PDF files and converting it into data for direct input into the accounting software. The “fetching” of invoices direct from suppliers is in its infancy now but I expect this to develop and become increasingly commonplace in the next five years or so.
Recent apps in the add-on marketplace link to cloud software and enable automated reviews of all transactions, identifying potential anomalies or errors. “Odd” transactions can be identified, highlight where multiple VAT codes are being used on suppliers/customers, multiple analysis codes per supplier/customer, duplicate contacts and many other items. This will again develop further, enhancing the review process, saving considerable amounts of time along the way.
With the masses of data now available (big data), we are already seeing enhanced reporting and also automated benchmarking of client accounting data against other similar businesses in the same field, and this is also expected to continue to develop and become available in many other products that can aggregate data.
Chatbots are still to become commonplace. Sage has Pegg – which can be used with some of its products. However, other software providers announced chatbots 3 to 4 years ago, but they do not seem to have made much progress?
Payments direct to suppliers from within the accounts software is a welcome addition to the tools available; many consider this to be the “missing piece” of the jigsaw in being to provide a full bookkeeping or outsourced accounting service to clients. Whilst there have been methods of processing payments, they have often involved exporting files and uploading to other software. The payments direct from software is already available in Xero using Credec, and Xero and Transferwise announced at XeroCon that their collaboration would be available in Q1 of 2020.
There are exciting times ahead for those can manage to adopt and adapt to the new technologies, or a potential nightmare for those that want to just bury their heads in the sand and do what they have always done!
Which side of the fence do you prefer?
What is the most exciting and useful automation feature you have come across?
What further automation would you like to see being made available?