How accountants are getting to grips with drones

Drone technology is fast becoming a valuable tool for clients and their professional advisers – including accountants.

Originally a military device, the demand for commercial drones is growing, too. And the big four accountants are eyeing the opportunities.

“Their adoption in construction, asset monitoring and maintenance, security and agriculture is becoming increasingly more commonplace,” says Joanne Murray, drones assurance specialist at PwC.

Why drones are taking off in business

As drone technology progresses, so commercial applications are advancing beyond basic photography and surveillance.

“We’ve had clients using drones to survey building sites, but also to showcase architecture projects and to trail the delivery of emergency pharmaceutical products.” Says Keir Wright-Whyte, director at accountancy and business advisory firm Accounts and Legal.

Drones offer an increasing powerful perspective to business, due to the different sensors they now carry, and the data they are able to capture as a result.

“From thermal cameras that can help analyse energy efficiency in buildings to cameras that produce images suitable for engineering-grade inspection, using a drone to capture important data is often much quicker and more accurate than traditional methods.”

Using a drone has clear health and safety benefits too, especially where access is needed to remote or inaccessible locations. “For example, oil and gas companies can now safely and quickly inspect an off-shore rig without the need to close down the platform, raise scaffolding and put staff in dangerous positions,” says Murray.

Drones will continue to grow in significance, as new uses emerge. Some are obvious, like

drone-delivery services in retailing, or  bringing wireless internet access to the remote corners of the world. Others are less obvious. For example, Wright-Whyte points out businesses are testing drones for air taxis.

Increased productivity and efficiencies

According to a report from PwC, progressively wider use of the technology could boost productivity and add £42bn to the British economy by 2030.

The report predicts there will be more than 76,000 drones in commercial and public use across UK skies by the end of the next decade. And while many of the existing jobs will become redundant, new highly-skilled posts will be created, with 628,000 people working in the drone economy in the long run.

PwC also says UK businesses could achieve net cost savings of up to £16bn by 2030 through the use of drones, with the technology, media and telecoms sector potentially saving the most (£4.8bn).

“Gathering data quickly and accurately, drones can create a ‘golden record’ in real time, which can make a crucial difference in managing costs, in addition to controlling risks and increasing safety,” says Murray.

Accountants leverage the power of drones

PwC’s UK team of drone specialists was established in January this year, to help clients take advantage of the technology in areas such as asset maintenance and monitoring, capital projects and construction monitoring, and strategic planning.

The team applies data analytics and machine learning techniques to the raw data collected by drones. This is then integrated with existing management information systems to provide comprehensive insights back to clients, for example those with real estate portfolios, landscapes for development or large structures requiring maintenance monitoring.

“Drones can be an excellent contract and project management tool,” says Murray. “The data can be used to measure progress of an infrastructure project – the insight gained can highlight areas for improvement or give commercial assurance over progress being delivered on an investment for reporting in the financial statements.”

How drones could help audit

Last year EY announced they were beginning to introduce drones for automated unit and warehouse stock counts in the automotive and retail sectors.

While other firms are yet to move beyond the testing stage and take their audit drones to the sky, the potential of using the technology to enhance the quality of audits is clear.

Murray says: “The clearest benefits are to the audit of tangible assets, particularly those that are over large or dispersed sites, where the auditor can gain assurance over the existence and valuation of assets in a way not previously obtainable, or in locations that would previously be difficult to access: power stations, bridges, wind turbines and telecommunication towers, where drones can easily capture details of assets’ condition and degree of use.”

Wright-Whyte can see drones being used to audit coal stocks at power stations. “Historically, building a topographical map of coal stocks has been a hugely labour-intensive endeavour. But a drone can easily survey the site and take samples for calorific value analysis.”

He adds: “Safety analysis and environmental audits will also be increasingly performed by drones rather than boots on the ground.”

Drone regulation in the UK

Wright-Whyte points out that accounting firms who use drones need to comply with data protection laws and GDPR. The same goes for their drone-flying clients.

There are other regulatory issues to consider, too.

It is now illegal for drones to fly above 400ft and within 1km of airport boundaries. Pilots must also keep to a distance of 50m from people and private property and be able to maintain sight of the drone at all times. Those flouting the rules face an unlimited fine, up to five years in prison, or both.

From 30 November 2019, drones weighing 250g or more will have to be registered with the Civil Aviation Authority, and drone pilots will be required to take an online safety test.

“Picking up a drone and flying it about isn’t so straightforward. Lots of new regulations have been brought in since the popularity of drones increased,” confirms Wright-Whyte.

Further information

Visit Civil Aviation Authority for further guidance for commercial drone operators.

Iwona Tokc-Wilde is a business journalist

Iwona Tokc-Wilde is a business journalist.