Is business process automation software eliminating the opportunity for new accounting professionals to learn the necessary skills for a successful career?
Technology and automation have exploded in recent years. A McKinsey survey reports that executives have accelerated the digitalization of their company and internal operations by three to four years. What would have taken years happened in a few months (thanks largely to Covid).
At the recent AICPA Engage 22 conference, you didn’t have to look hard to see how pervasive automation has become in accounting firms. $9 billion has been invested by three of the Big 4 into AI and technology. Safe to say: automation in accounting and advisory services is here.
With all change, some skepticism is inevitable. One such skepticism for automation is questioning the loss of learning opportunities. Certain mundane, manual, repetitive tasks on accounting projects may be cumbersome and slow down topline growth at a firm (due to decreased capacity), but that repetition is what teaches a new associate the mechanics of how things get done.
When an advisory firm is considering implementing business process automation software in any service line, learning opportunities and skill development should be taken into account.
Learning by Doing
Many elementary math teachers prohibit the use of calculators with their students. Students learn by doing. Despite extensive research documenting the benefits of calculator use, the skeptics worry the crutch of a calculator will impair learning and result in mathematical illiteracy. In reality, calculators can be incredibly powerful educational tools that empower students to reach a higher, deeper level of mathematical understanding. Eliminating time spent learning tedious “paper-and-pencil” math, students can instead “spend more time developing mathematical understanding, reasoning, number sense, and applications.”
At Finagraph, we have come across professionals at accounting firms who are hesitant to adopt automation for a similar reason to these math teachers. Their explanation is that automation takes away from young associates’ training building financial models and reports from scratch, as these tasks are believed to be critical to the development process.
While we don’t disagree with this sentiment, and further, we believe it can be valuable for an associate to perform a task once or twice, rejecting automation wholeheartedly for this reason can have a detrimental effect on the firm. For professionals who find themselves wrestling with the automation vs. “learn by doing” approach, we put together some ideas to consider.
Focus on the Important Skills
When choosing between automation of a task or keeping it manual, it’s important to ask exactly what skills new professionals will learn by performing the task the manual way. It’s also important to identify the most valuable skills a new professional needs to learn to either (#1) be qualified to get promoted from one level to the next in your firm (for example, from associate to manager), or (#2) add value to the client. If the tasks in question don’t build skills that fit into (#1) or (#2), then there’s a good chance that automation should be considered for the task.
A good example is extracting and formatting reports from an accounting system like QuickBooks. Let’s view this from the perspective of two service offerings to clients: financial due diligence and client accounting services.
In financial due diligence, the team may need to extract and format reports from an accounting system to obtain the right information to start their work. Because of the volume of data and reports required, this may take hours for the team to complete. For this reason, associates typically handle this job since they (i) have the lowest cost rate to the firm for the hours spent, and (ii) they are lowest on the totem pole! Using our framework above, this task doesn’t develop a skill that will help the associate grow to the next level (#1) nor add value to the client (#2). The client is paying for advice and insights on the data, not the hours spent pulling it out of the accounting system. The conclusion: automate it!
In client accounting services (CAS), the team is typically required to run reports out of the accounting system to send to clients at month-end. Month-end is always crunch time since this needs to be performed every month for nearly every client. For that reason, many months require an “all-hands-on-deck” approach to hit deadlines. While it’s helpful for associates to understand how to run these reports on their own, doing so over and over again (especially in a time crunch) will not help their advancement in the firm (#1) and running the reports alone certainly does not add value to the client (#2). The conclusion: automate it!
Like the CAS example above, there are times when performing a task a few times is valuable. Formatting data in Excel is repetitive and tedious, but building reports and analysis from scratch helps new professionals understand the fundamentals and how data comes together. Getting familiar with how data, formulas, and Excel work is an incredibly important skill for an accounting professional. Learning by doing in this case has a valuable pay off.
That being said, even in those cases where the learning by doing can develop meaningful skills in new team members, it doesn’t mean that those tasks need to always be done manually. NASA astronauts use calculators. Once a team member has had the opportunity to complete the repetitive task a few times, automation can be introduced at that point to allow time for the next level of skill and analysis development. Tools like Strongbox that automate the pulling of financial data from accounting systems and produce ready-to-use Excel workbooks can be a valuable solution.
Business Process Automation is Here to Stay
With firms investing so heavily in automation with time and resources, it’s safe to say that automation is the future norm in accounting. Not having it puts firms at a competitive disadvantage. Automating a process has many benefits, including increased efficiency and reduced manual labor. Thus, less time is spent on fact-finding or copy and pasting into Excel, and more time is spent engaging in insightful and detailed analysis.
Business process automation benefits for accounting and advisory firms include:
Ability to scale quickly
Improved employee engagement
Reduced opportunity for human errors
Retention of top talent
Increased team output
Higher margins
Like the calculator, business process automation software can elevate and enhance learning rather than replacing it. Your team is happier, more engaged, and more productive because they can instead focus their time on meaningful work, including new skill development and advanced learning opportunities.
Best of Both Worlds
Every practice is different and has its own unique set of challenges, but when it comes to the question of automation vs. learn by doing, most firms would benefit from a hybrid approach. Automation can save time, reduce errors, keep employees engaged, and improve margins. When combined with a trained professional who has had a few laps around the manual block, the result is powerful. Firms using Strongbox have seen this firsthand. Contact our team today to learn how the Strongbox financial data gathering and processing automation can work with your firm’s business processes to accelerate your growth.