How accountancy firms are using technology to empower efficiency and security.
British accountancy firms allocate 7-10% of their revenue towards Information Technology (IT) solutions. Here are the headlines about their key requirements and challenges.
Top needs from a technology supplier
Top needs from technology
Top technology purchases
Top blockers to purchase
In summary, accounting firms need technology to maintain a competitive edge, manage costs, and navigate an increasingly complex regulatory landscape. They want technology suppliers that not only offer guidance and support but also provide solutions addressing their cost concerns and security needs, while also helping them overcome access to the right skills.
Effective use of technology is key to empowering business efficiency and security.
Reducing Operating Costs
With pressure to streamline operations, accountancy firms are actively seeking solutions that help reduce their overall cost base. Automation, cloud-based systems, and artificial intelligence (AI) are increasingly adopted to cut manual processes, freeing up staff to focus on higher-value tasks like client advisory services.
Enhanced Security & Compliance
Given their fiduciary responsibilities, accounting firms require robust security measures to protect sensitive client data and ensure compliance with GDPR and other regulatory frameworks. Encryption, multi-factor authentication, and advanced threat detection are now non-negotiable.
Facing challenges head on.
Access to Skills
The biggest challenge accounting firms face when it comes to adopting new technology is a lack of skills. Many firms struggle to find and retain staff with the expertise required to implement and operate sophisticated systems. Bridging the digital skills gap is vital for firms looking to unlock the full potential of their technology investments.
Cost of Implementation
While many firms recognise the value of digital transformation, the upfront costs of implementing new technology can be a significant barrier. This is particularly true for smaller practices, where budgets are more constrained. To overcome this, accountancy firms need their suppliers to offer scalable solutions with flexible pricing models that align with the firm’s size and stage of growth. Additionally, practices are becoming cynical about the level of hidden costs that have become common in recent years. For example, restricted app performance, charges for more storage etc.
Digital transformation, Cybersecurity, Data Protection and AI.
Digital Transformation
Digital transformation continues to dominate the investment landscape for accounting firms. These businesses are embracing cloud-based platforms, AI-driven analytics, and automated reporting tools to enhance efficiency, improve accuracy, and drive innovation. According to a study by Xero, more than 40% of small and medium-sized firms cite digital transformation as a top priority.
Cybersecurity
With cybercrime showing no signs of slowing down, investments in cybersecurity are paramount. Leading firms are deploying a combination of tools, from advanced firewalls to real-time security monitoring, to protect their operations. A 2023 survey by the Institute of Chartered Accountants in England and Wales (ICAEW) revealed that 65% of accounting firms plan to increase spending on cybersecurity over the next 12 months.
Data Protection Solutions
Protecting sensitive data is at the heart of every accounting firm’s operational strategy. Firms are turning to solutions that offer encryption, secure cloud storage, and automated data backup. Tools that ensure compliance with data protection laws are essential for both safeguarding information and avoiding fines.
AI and Machine Learning
Artificial intelligence (AI) and machine learning are revolutionising accounting by automating complex processes such as auditing, tax calculations, and forecasting. These technologies reduce the time spent on manual tasks, enabling firms to focus on advisory and strategic planning services. A Deloitte report showed that 58% of accounting tasks can be automated, with the potential to significantly reduce costs.
The technologies accountancy practices value most.
The most valued technologies in accountancy today are Cloud and Hosting, Fixed Network Connectivity, and Cybersecurity, each playing a critical role in driving operational efficiency and security.
Cloud and Hosting services allow firms to store and access data remotely, enabling greater flexibility, collaboration, and scalability. Accountants rely on cloud-based platforms for real-time financial reporting, seamless client communication, and secure data backup.
Fixed Network Connectivity ensures the reliable and high-speed internet required to support these cloud-based solutions, especially as more firms shift towards remote and hybrid working models. This consistent connectivity is crucial for accessing large data sets, running cloud applications, and maintaining client interactions without disruption.
Cybersecurity remains a top priority as firms are responsible for safeguarding sensitive financial data. From encryption to real-time threat detection, robust cybersecurity measures protect firms against increasing threats of cyberattacks, ransomware, and data breaches. Together, these technologies form the backbone of modern accounting operations, allowing firms to operate securely, efficiently, and with agility.
Transforming Multiple Business Processes At Johnston Carmichael
In the past, the team at Johnston Carmichael made use of a client portal solution that was “very basic, clunky, and not intuitive for users,” according to Yvonne Irwin, the company’s director of client services and projects.
As a result, less than 10% of their client base used the portal—instead, they (and internal team members) used workarounds like email, which “often led to confusion and frustration.”
The team searched the market for a solution that could streamline their processes and improve client relations through automation and other features such as electronic
document approvals, bulk file requests, audit trails, and so on. They eventually settled on Glasscubes, an all-in-one collaboration solution equipped with all these features and more.
Since the launch, the team has seen an increase in the uptake of both clients and staff.
Automating Customer Success At Octane Accountants
“In March of this year, we transitioned from a CRM solution to an automated relationship management platform called Accountancy Manager,” says Dan Hanley, director at Octane Accountants. “It’s helped our firm automate our customer success and account management functions.”
Hanley says the switch provided many benefits for the firm, the stand outs being the customer experience enhancements and central, shared hub dynamic the solution provided.
“Within the accounting industry, there’s forever been a clunky, manual, disconnected feel to agent/customer relations with regard to viewing communication archives, sharing important information, and providing deadline updates,” Hanley explains.
The new solution has “revolutionised” this previously labourious aspect of customer service through its automation features. Hanley notes that this has saved his team and customers lots of time while also keeping them reliably informed of their legislative obligations.
Improving Data Entry And Compliance Monitoring At Page One Formula
Ian Rodda, CFO at Page One Formula, says her team has automated critical processes such as data entry, report preparation, and compliance monitoring. “These areas, which were previously laborious and time-consuming, are now handled efficiently by software.”
The tools this team has implemented to achieve automation include Xero for book-keeping, ADP for payroll automation, and QuickBooks for a number of other financial processes. Rodda says these tools have become “integral” in enhancing the team’s operational efficiency.
“Overall, automation has significantly improved our business operations, leading to faster turnaround times and error reduction,” says Rodda. “This has deepened trust with our clients, fostering stronger relationships and enhancing client satisfaction through prompt and accurate services.”
“One of the biggest challenges our firm has is extracting transaction information from clients,” says Julia Kelly, managing partner of Rigits. “Unfortunately, clients often send information on their timetable, not ours. This results in missed deadlines and incomplete financials.”
To overcome this challenge, the team implemented a tool called Uncat, which automates the collection of transaction information needed from clients and integrates with QuickBooks Online to get instant answers from clients on expenses or income that Kelly’s team doesn’t know how to categorize.
The old process worked like this:
“Most clients wouldn’t answer emails that weren’t urgent or customer-facing, so these kinds of requests were often moved to the bottom of the client’s priority list,” Kelly explains.
Now with Uncat, all transactions that are moved into the Uncategorized register in QuickBooks get automatically synced to Uncat. The client receives a magic link via text (no sign-in required) where they can see the date, amount, and vendor for the transaction in question.
The client can choose which account to move the transaction into and leave a note if needed. Once this is done, the transaction is then synced back to QuickBooks to the proper account with the client notes. “This tool has been a game-changer for our firm and significantly cut back on the amount of emails and reminders needed between our firm and our clients.”
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