Before the coronavirus (Covid-19) pandemic, digital skills and tools were already becoming crucial to the functioning of finance teams throughout the economy as businesses seek to gain competitive advantages.
The pandemic has accelerated this process for some. For others, the transformation was already underway, as much of the everyday bookkeeping processes are commoditised and automated.
Here we look at four different case studies that show the different ways businesses are harnessing technology.
1. Off-the-shelf delivery
Those already using cloud computing and proprietary automation found it easy to adapt to the emergency stage of the pandemic. Practices were able to move easily to home working and produce high-quality reports and forecasts for their clients. They were even able to move their businesses forward at a time of crisis..
Sharon Pocock is managing director of accountancy firm, Kinder Pocock, which uses Xero. She says: “In working through Covid-19, we just had to work from home, we haven’t had to change anything. We have instant access to clients’ data and we can interpret it. Then we can use tools like (cash flow software) Float and (reporting software) Spotlight to forecast and provide advice and structured plans.
“Using all these digital tools has freed up our time for more meaningful conversations.”
“When we talk to potential clients, they’re surprised at how much we can offer,” notes Pocock. “We’re in a society where everything’s immediate, so in that respect they do expect more. Other clients are bowled over by what we can offer.”
2. Next-level adoption
Baldwins (part of the Cogital Group) is pushing forward into next-level automation, producing large time-saving benefits.
Dave Travis, managing partner for the North East, explains the transformation.
“We’ve digitalised preparation of accounts internally, we’ve digitalised audit and we’ve launched our own portal.
“We’ve had a lot of people joining over the last four months to drive the next stage of digitalisation within the business.
“The overall impact is that we’ve seen a significant reduction in the time spent preparing things and more time spent on adding value,” Travis says. “When we previously might have spent a large chunk of time preparing accounts, our system will use artificial intelligence (AI) on the back of those accounts.
“That means when we speak to clients, not only are we talking about what the accounts say, we are also saying what the accounts suggest could happen in the future and how we can help get round those issues.”
That use of AI has given Travis and his colleagues at Baldwins “the opportunity to develop as advisers, rather than pure accountants”, he says. “At the moment, there’s 20%-30% saving in production time, and that’s giving us time to add value rather than just producing the accounts every year.”
Instead, he says, accountants deliver for their clients and organisations through providing a more strategic service.
The trends, financial data and forecasting is “all produced automatically”, Travis explains, adding that it’s then the accountant’s role to “interpret what’s produced” and how it relates to their client or business.
3. Feeding finance teams real-time data
The pandemic has clearly illustrated the impact of having up to date, accessible financial data. However, many finance teams are not in this position.
Spend management platform Soldo surveyed 100 finance executives across the UK found that 62% of finance teams are not using real-time data.
As a result, the time that it takes for different businesses to track company-wide spending each month varies significantly. For one in five (21%) the task takes less than a day, for half (46%) the task takes between one and four days. Almost a quarter (24%) reported that investigating spending took between one and two weeks, while nine percent reported the task taking longer than two weeks.
“The finance function is under tremendous pressure right now,” Soldo’s chief financial officer Dynshaw Italia says. “Real-time data is critical for decision making as companies need to adapt and react quickly to constantly changing circumstances. It’s concerning to see this audience spending long periods of time investigating spend data manually when new technologies allow for faster decision-making that will clearly put them at a strategic advantage.”
4. Digital upgrade underpins Cogital’s expansion
Digitalisation is at the heart of Cogital Group’s plans for rapid expansion. Formed in 2016, it set an ambitious aim of taking on the Big Four in accountancy and now has revenues of £500m.
A key part of the strategy was to bring credible mid-tier firms – such as Baldwins, Blick Rothenberg and Wilkins Kennedy – into the fold and give them a “digital upgrade”. This was achieved by introducing a range of services, including outsourced accounting, payroll, transaction processing services, tax compliance and more.
Proprietary software played a large part in this, according to Dave Travis, Baldwins’ managing partner for the North East. However, he says the group is also moving forward with bespoke development to gain a further edge.
“We use a variety of products, including in-house products, and some of that is still in development,” Travis explains. “A lot of the things we initially used, like Receipt Bank will be redundant in the future because it’ll be automatically done rather than copying things into the system. We’re making some of the newer products redundant by moving a step further in that way.”
Cogital’s successful digital overhaul of several traditional firms shows that transferring to digital doesn’t have to be a major headache.
“They were largely using CCH systems, which dovetailed with the systems we’ve set up, so a lot was automatically transferred across and there’s very little of transferring paper to digital. It’s more a case of reconfiguring what’s already there.
“We’re still in transition. What we’ve done so far is digitalised audit and preparation of accounts internally. Certainly the plan is to have common systems, so that no matter where you are as a client, you’ll get the same service.”
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David Nunn is Content Manager at AAT.