5 Accounting Automation Questions to Ask Before Implementation

If implementing automation in accounting has topped your to-do list without budging for a few years, you're in good company. When we surveyed finance executives for our 2023 Accounting Talent Market Outlook Survey, over a quarter of the 800 leaders we asked called addressing technology initiatives the most pressing issue they were facing for the year. Keep on reading to learn the answers to the most common accounting automation questions we've seen.

Moving the needle is tough! Maybe talent crunches are tripping you up, or you're facing internal resistance to pulling the trigger. Probably, it just never seems like a good time to introduce a major implementation and the short-term challenges feel so much bigger than the long-term benefits. Spoiler: that's very unlikely.

Listen: CFO Weekly #130: How Technology Influences the Modern CFO

Wherever you are in the automation process, you've almost certainly got at least one big question on your mind, but probably more. And that's good, because leading your team through the major transformation automation represents for the day-to-day work of the finance function isn't something you can just improvise. Luckily, we've got answers to five common accounting automation questions every finance leader should ask before (finally!) crossing this one off their to-do list.

1. What Types of Tasks Will Be Automated?
2. What are the Benefits of Accounting Automation?
3. What are the Risks of Automating Accounting Processes?
4. How Steep is the Learning Curve? How Else Will Automating Accounting Processes Affect the Humans on your Team?
5. Will Your Automated Solution 'Play Nice' With Your Current Technology or ERP Integration?

What Types of Accounting Tasks Will Be Included in the Automation?

The prevailing conversation around automated accounting tasks is frustratingly broad, usually beginning and ending with the declaration leaders really ought to do it, and they should probably get started yesterday. There's a reason for that — what tasks you can and should automate will depend on what you want to get out of it, and slow adoption of robotic process automation (RPA) and optical character recognition (OCR) tools means there aren't many benchmarks out there yet.

Automation for its own sake is about as effective as never doing it at all, and it's important to remember that no matter what the enthusiastic salesperson insists during a demo, it's not a magic bullet. To qualify as a candidate for automation a process needs to:

• Be manual and have a relatively large transaction volume: capturing account information, entering transactions and updating invoice logs

• Be rules-based and outcome limited: Route invoices, issue payroll and account reconciliation

• Be completed, recorded or captured digitally: scan and upload receipts (as opposed to handwritten checks or expense reports)

• Require very little improvement: Artificial intelligence can't earn Six Sigma certification, so you'll have to optimize, then automate

• Produce ROI: Implementing automation takes time, money and resources — make sure the results are impactful, measurable and progressing you toward a goal

Read more: Essential KPIs for Building Strategic Controller Dashboards

What are the Benefits of Accounting Automation?

Automation can be used to alleviate pain points for every stakeholder in the finance function, given that you can name which ones you hope to address by implementing it. For instance, automation has the potential to:

• Reduce errors and their associated rework for greater cost savings for your organization

• Free up your team's time to spend on high value accounting tasks by reducing repetitive, tedious drudgework

• Improve the accounts payable and accounts receivable processes — and overall experience — for you and your customers and vendors

• Keep cash flow visible and improve data quality and retrieval for regulatory and compliance bodies

Before you begin to automate accounting tasks and processes, you should be able to articulate the specific benefits you intend to realize by doing so. Will you automate accounts receivable processes to get paid faster? Record keeping for a faster tax and audit process? Daily drudgework to reduce burnout and improve morale.

Listen: CFO Weekly #63: The Benefits of Automation — When (& When Not) to Automate

What are the Risks of Automating Accounting Processes?

The fact is, automation isn't really an emerging technology anymore. It's here, and leveraging it effectively is going to be standard operating procedure very soon. It's a tool that can and should be used in conjunction with traditional skills and principals to stay abreast of accountancy's current state of play. But it's not perfect, and there are risks you should be aware of and plan for before you start overhauling your company's accounting department:

• Erroneous design or execution – Design flaws at the bot level and human error during operational application can mean that the very errors you implemented automation to reduce can inadvertently be codified into accounting processes and wreak havoc before they're caught. Remember, automating a bad process won't improve it, it will just be fast and bad

• Regulatory noncompliance – What's worse than accidentally turning every day bookkeeping tasks into error-generating cost centers? Accidentally turning them into sanctionable noncompliance and steep fines, in our opinion.

• Incomplete or inaccurate reporting — Bad bots and automated errors can cascade all the way down to reporting and result in unfortunate consequences resulting from decisions made with inaccurate data.

Risks like these and their potential consequences should make it easier to remember that even the most impressive technology has tangible limits, and implementing that technology successfully often depends much more on people than programs.

How Steep is the Learning Curve? How Else Will Automating Accounting Processes Affect the Humans on your Team?

That sentiment makes for an apt segue, actually. Automated accounting processes don't execute in a vacuum or out in the ether. On each end is a person, and that person should know what they're doing. If you're in a leadership position, ensuring that they have what they need to make that possible probably falls to you.

As you're weighing the many, many options and partners on the market, make sure you know what impact your final decision will have on your team. Are there robust onboarding opportunities available at or before rollout? What, if any, upskilling or professional development will take place to best equip them to use the new tools at their disposal most effectively? Automation isn't a piece of accounting software that comes with a paperclip mascot-led tutorial. It's a significant and lasting change to the way accounting is done at the organizational level.

More: Why Professional Development Matters & How to Prioritize it

In turn, being clear-eyed about the impact that technology will have on the people using it — how much of their time and effort will be required to get comfortable in addition to their current workload and responsibilities — will ensure you're best equipped to keep them engaged and protect them from burnout when the light turns green.

Will Your Accounting Automation Solution 'Play Nice' With Your Current Technology or ERP Integration?

When it comes to accounting automation, interoperability in the form of ERP integration can be more elusive than anticipated. You need to know if the tool you choose can — and will — "play nice" with your existing IT infrastructure and organization's core technologies.

If your ERP updates, your servers require routine maintenance or IT platform undergoes a change of its own, it's crucial to know what that means for your automation solution and vice versa. Potential partners should be able to demonstrate past success integrating their technology into the ERP you're using. An implementation roadmap with contingencies built in for potential roadblocks will help you avoid a crisis in the end.

When you're ready to implement accounting automation, you'll have a lot of questions and factors to consider that will mean looking beyond style to find the substance. Be proactive about asking questions that will clarify everything from impact on employees to the solution's cost and tech support after day one.

Automation is one of many tools you can use to realize the full value of your company's accounting department and professional expertise. When you augment both with a virtual accounting talent solution from Personiv, you can stay one step ahead of competitors with a finance function that's future-ready — today. See how we can help make it happen.