Was it really only a year ago that we all had to go remote, practically overnight? As tragic as the COVID-19 pandemic has been — and continues to be — for many of our friends and families, a possible silver lining is that the sudden shift to remote work accelerated the pace of accounting automation. Automation is no longer just something nice to have, but has become essential to strategy. Let’s take a look at how the pandemic moved accounting automation into the future.
Still doing accounting by hand
Despite news stories with provocative titles about robots coming for Phil in accounting, prior to the pandemic, most companies were still relying heavily on manual processes. That’s according to a global survey of finance professionals performed by Deloitte and the IMA between November 6, 2019 and January 6, 2020. At that time, 75.7% of respondents said accounting was still largely or at least partially manual. Only 1.4% said their accounting was fully digital.
In those pre-pandemic days, a bigger priority for respondents was developing their IT infrastructure and implementing cloud-based budgeting, forecasting, and reporting tools. That makes sense: without a stable and accurate data infrastructure, implementing robotic process automation (RPA) and AI to automate accounting is frustrating at best, and presents too much of a barrier for many.
The pandemic forced us to change fast
Then the pandemic hit, and everything changed. We moved years ahead into the future in just a few weeks. A new study by McKinsey claims that we are now past the technology tipping point. Worldwide lockdowns and the sudden shift to remote and touchless operations forced digitization in internal operations, supply chains, and customer interactions faster than anyone thought possible, as the graphic below shows. Before the crisis, the executives surveyed thought it would take on average more than a year, or 454 days, to implement remote work. Instead, they got it done in just 10.5 days, a factor of 43X.
Going remote required investments in data security and migration to the cloud, which were both seen as bottlenecks prior to the pandemic, but, as the McKinsey report says, “the survey data suggest that the COVID-19 crisis is a tipping point of historic proportions—and that more changes will be required as the economic and human situation evolves.” Those investments mean that remote work is likely here to stay.
The pandemic didn’t just send everyone home to work, which was a major change on its own. Everyone went into panic mode from the sudden and drastic changes to the economy. Cities, states, and whole countries went into lockdown. Entire industries shut down. Business leaders needed better information, and they couldn’t wait until the month-end close to figure out what to do.
As Tom Kelly, Senior Director of Product Management at Netsuite said in an article on FEI Daily, “The pandemic has made access to real-time information non-negotiable.” Access to real-time, reliable, error-free data is essential not only for the decision-makers in the C-suite, but to enable accounting teams to collaborate when they’re not in the same building.
Automating at scale means reimagining accounting and business
But to achieve anything like real-time information, automation on a much larger scale needs to happen. By mid-2020, when Deloitte repeated its fifth annual survey on automation, many companies were beginning to make that move. In the previous survey, 58% of corporate executives were just beginning the process of automating processes, but by mid-2020, that figure jumped to 73%. Companies were no longer seeing automation as something to simply replace headcount, but as something that adds to the bottom line by enabling companies to perform tasks such as automated debt collection that were not economically feasible previously.
Automation doesn’t just remove error-prone, manual tasks from the accounting workflow. It has the potential to entirely transform businesses as we move into the future. According to the authors of the Deloitte survey, companies with 50 or more automations “are more likely to reimagine what they do, not just redesign tasks or re‐engineer processes. They are re‐envisioning how work can be done, which allows them to expand their ambition, and evolve from taking small steps to achieving radical change.” Automation won’t just change the tasks we accountants do — it will also change how our businesses operate and, possibly, what they sell.
Instead of a piecemeal approach of automating a step or two here and there, automating at scale requires breaking down the silos between the parts of an organization. This means accountants working on automation initiatives will be parts of teams from different parts of an organization, not just accounting. These people may have radically different ideas on how to get the work done. This may also require restructuring your accounting team to get the maximum benefit from RPA.
It won’t be enough to retrain your team to use the new tech, though that will also have to happen. The tasks taken over by RPA may be spread across multiple team members, so you may need to completely redesign how accounting gets done. In addition, you’ll need people whose role is specifically to manage those bots. Those bots won’t build themselves, so you’ll need to hire or retrain team members who will be responsible for configuring bots, integrating them into the workflow, and overseeing their output.
Accountants and robots working together
The pandemic rocketed automation across all business sectors into the future, moving us several years ahead in just a short time. Companies that already had automation in place and that had already moved to a cloud-based ERP fared better than those who did not. The pandemic also elevated the role of accounting and finance within organizations to play a strategic role.
While robots won’t take your job, your job as an accountant will change. Automating accounting means a future of tech supporting and empowering humans so we can both do what we do best. Bots are great for repetitive, rote tasks, but they’re not so great at strategy and creative thinking. And that’s where we can shine. Finally, automation means we will get to do the coolest job in the company.