Article credit: Sage 

Artificial intelligence (AI) and automation have taken the accounting profession to a point of pivotal change, and it’s about to transform the way that accountants operate.

AI is already great at automating repetitive accountancy tasks, which improves accuracy and productivity, and helps firms to discover hidden insights and trends that affect their clients’ businesses. It can automatically upload documents, understand entries, and classify them using the right accounting codes.

This has enabled accountants to do more with fewer resources and has freed up time and energy for creativity when it comes to analysing and interpreting data to extract real value for clients.

Many professionals are excited by the benefits that AI can offer. According to our Practice of Now report, the majority of South African respondents (82%) agreed that they need to increase the pace of technology adoption to stay competitive.

Now, as advances in AI and machine learning (ML) pick up the pace, three additional benefits have emerged: invisible accounting, continuous auditing, and dynamic insights.

1. Invisible accounting

At the beginning of 2020, over half (54%) of South African accountants were moving away from traditional service models and were reinventing their core technologies, recruitment approaches, and skillsets to offer customers an end-to-end consulting service.

They were able to do this because AI had eliminated repetitive tasks from the daily workload and increased the amount of readily available data and, therefore, intelligence to understand the current health and direction of their clients’ businesses.

2. Continuous auditing

 Nearly all South African accountants (90%) say that the ongoing effects of technology advancement and digitisation are forcing them to move faster and invest more to keep pace with the market.

Artificial intelligence can help accounting firms to build trust through better financial protection and controls.

As the volume of online transactional data increases, so does the potential for financial fraud, manual accounting errors, and dishonest payments. This has made compliance a lot more complex. But AI can review the data at speed.

It can detect anomalies like duplicate invoices, determine links between seemingly normal (but not) payments, and assign expenses to the correct categories, so the business doesn’t pay out for items it shouldn’t.

Automated anti-fraud and finance management systems help practices to significantly improve compliance procedures. In implementing predictive, strategic services to protect their own and their clients’ finances, they’ll also be able to pick up on potential issues before they arise.

What’s more, AI lets accountants capture business activity in real-time, perform continuous reconciliation, and make adjustments such as accruals throughout the month, which reduces the reporting burden at the end of the financial period.

3. Dynamic insights

 Two-thirds (65%) of South African accountants said that investing in technology had enabled them to provide a faster service, which positively impacts customer relationships, and nearly a third (29%) have invested in emerging technology in varying degrees.

AI’s ability to analyse large quantities of data at speed and at scale allows it to deliver actionable insights in real-time.

In pulling data from customer demographics, past transactional data, and external sources, AI helps accountants to optimise their workflows, make better business decisions, and puts them in a position where they’re looking forwards with clarity, rather than backwards with obscurity.

For example, by using data to perform cash flow forecasting, the business can predict when it will run out of money and act before that happens. And, by uncovering patterns in customer behaviour before they churned, AI can help businesses to understand why customers leave and how they can improve their retention strategies.

This means that accountants can help clients to respond to financial challenges before they become acute, by adjusting spending or processes as required. And, as AI advances, accountants will soon be able to provide predictive consultancy beyond classic financial planning to incorporate other areas of the business.

Same, but different

 The accounting profession is evolving and becoming more sophisticated. While the rules of finance remain the same, the rules of how the work is done are shifting.

AI can speed up the profession from a traditional “bookkeeping” function to delivering dynamic insights that can drive strategic decisions and transform accountants from number-crunchers into true changemakers.

Article credit: Sage 

Article credit: Sage 

Last year, South Africans spent almost R2.9 billion on Black Friday – almost 16% more than in 2017. Even more remarkable is that sales in South Africa were 1952% higher on Black Friday than on any other day.

The American shopping tradition grows year-on-year in South Africa, with this year expected to be the biggest yet. And, since Black Friday falls after payday – on 29 November – consumers will likely have more disposable income.

Here are some more interesting stats from last year:

• Consumers bought an average of 4.5 products,
• The peak shopping time was between 8 am and 11 am, and
• South Africans spent around R1700 each.

So what does this mean for your small business? Yes, it’s an opportunity to increase sales, but small businesses have traditionally struggled to compete with bigger retailers: while large retailers reported record sales last year, small businesses reported a 10% drop in sales revenue and a 2% drop in sales volume, even though they offered more and larger discounts.

Rather than trying to keep up, why not approach Black Friday as an opportunity to grow your customer base and prove your loyalty to your existing customers?

As a small and medium business owner, you can stay competitive this Black Friday by ensuring a seamless customer experience, testing your technology to handle higher online and in-store sales volumes and foot traffic, and letting consumers know about your business and what you offer. Get these elements right and you could boost your customer base significantly, which should be the ultimate goal of Black Friday.

To prepare your business for the big day, ask – and answer – these three questions:

1. Should you try to compete with the behemoths?

Consumer shopping habits have changed. With Black Friday happening a month before Christmas, many consumers buy gifts and holiday supplies in November, which means they have little disposable income to spend on December and January sales.

You might feel like you have to go toe-to-toe with the big retailers by offering the same – or bigger – discounts. The reality is that you likely don’t have the same inventory levels, buying power, and budgets as larger retailers. But with some smart marketing tactics and by focusing on the customer experience above all else, you can secure a customer for life, which is worth far more than a once-off Black Friday sale.

2. Can your technology cope?

Every year, videos of in-store Black Friday chaos do the rounds. To avoid the pushing, shoving, and altercations, many consumers choose to shop online from the quiet of their living rooms… until a website crashes or they miss out on deals because of limited online stock and long virtual queues.

While large businesses can invest in back-up technology and server capacity and hire more customer support personnel, many small businesses don’t have the flexibility to scale their technology on demand.

But there are other things you can do to manage and stagger the increased traffic to your site or store, to ensure the shopping experience is as smooth as possible. Here are a few ideas:

• Encourage your customers to create wish-lists before Black Friday. When something on their list goes on sale, send them an email or notification, with a direct link to the product.
• Schedule deals throughout the day rather than putting all your sale items up at once. Remember the peak shopping times of 8 am to 11 am.
• Use countdown clocks to show how many units of an item are still available. This creates a sense of urgency and encourages people to purchase faster.
• Run load tests on your site beforehand and identify pages that can be compressed to reduce loading times.
• Automate as much as possible, from invoice generation to payment and delivery, so you’ll have more time to focus on your customers.

3. How will you handle impatient customers?

Amid the excitement of bagging a great deal, people can become impatient and irrational on Black Friday. Most people have an idea of what they want, which means they expect a seamless process that allows them to find it, pay for it, and move on to the next item on their list. Nothing should hamper this: not your technology, processes, or customer service.

When customers have a good overall experience, they’ll tell their friends and family – and word-of-mouth marketing is a great way to cut through the Black Friday noise caused by every business punting every offer. Get the experience wrong, though, and consumers will not hesitate to name, shame, and drive business away.

Avoid this by making dealing with you as pleasant as possible. Offer exclusive deals to your loyal customers and make sure that your delivery partner can keep up with the increased demand. Simplify your processes and try to put a personal touch on the day. You might not be rewarded immediately, but customers will remember the gesture and give you repeat business throughout the year – and that’s the best Black Friday deal your business could hope for.

Get Sage 200 Evolution today. With a real-time overview of your inventory and sales, as well as insights into your past performance and future forecasts, you can save time and money, and handle whatever Black Friday throws at you.

Article credit: Sage 

Improve your accounting practice and business offerings with 3 accounting industry insights.

In the latest version of The Practice of Now survey, respondents were asked what pain–points their businesses experienced with their accountants, and what they expected. We candidly asked if they felt that their accounting needs were being met, and if not, how they could be improved.   

The 2020 edition includes a new element – a qualitative survey from Coleman Parkes, which conducted thorough interviews with users of accounting services. These interviews comprised small and medium-sized businesses in Australia, Canada, France, South Africa, Spain, the UK, and the United States.   

Here, we will delve into some of the answers, and the areas that respondents felt the less–progressive accountants were struggling with – digitalisation, assisting businesses with compliance and making their services attractive to future generations. These insights can be used to improve your practice and business offerings. 

Accounting Practice Improvement 1: Constant digitalisation 

 According to the main Practice of Now research, 82% of responders agree that their expectations of bookkeepers and accountants have grown to include advisory services around finance and accounting technologies. In South Africa, 82% of accountants agreed that firms need to increase the pace of technology adoption to stay competitive. 

 Globally, 83% of accountants stated that digitalisation and continuous emergence of new technologies have meant that, to be able to keep up with the market, they have had to invest more – and rapidly at that. But they’re also reaping immense benefits. South African accountants that have updated their technology in the past five years report improved productivity and efficiency (68%), and 69% said their firm is ready for the next wave of digital technologies, like AI and robotic process automation.  

 In Australia, the C-suite executives of a medium-sized energy business noted the benefits clearly: “Technology has enabled us to make real-time decisions.” With technology being this critical to clients, it cannot be discounted by accountants.  

“Technology has positively affected our relationship,” said the CFO of a small US-based construction business. 

“Our accountant has been adapting to technology and they have definitely elevated the quality of their work by utilising the technology properly.” 

A financial controller from a medium-sized retail business in Canada said that their accountant, whom they’ve been using for more than 30 years, has progressively adopted emerging technologies, and that is one of the reasons why they have stayed with their accountant as long as they have.  

 Some of the technology their accountant has been helping them with include automation, cloud, and cybersecurity.  

 What became clear from the survey was that businesses measure their accountants by how willing they are to embrace and implement technology. A director in a small analytics business in South Africa warned: “My accountant hasn’t adopted any technologies, which is why she is being replaced with somebody who can. My accountant is not embracing technology, but my industry is.” 

 An individual with income tax responsibilities in the UK believes that their accountant should be IT literate. “This is the modern world. Everything is computerised now.”  

 Key takeaway 

 There is a definite need for accounting professionals to keep abreast of technologies within their accounting practice. Reach out to industry bodies that you are affiliated with as they regularly release reports detailing not only what is available, but also what is in the pipeline. 

 Most importantly, keep an open mind about adopting technology sooner rather than later. Implementing new technologies in your own practice first will give you a good idea of what exactly it is that you can offer your clients.  

Accounting Practice Improvement 2: Stay up to speed with changing regulations 

 In the Practice of Now survey, 79% of accountants agreed that regulation from industry, government, and international bodies are changing working practices.  

 Globally, the legal requirements that customers need to handle – and that accountants are expected to assist with – are expanding exponentially. COVID-19 has highlighted this when businesses needed help from their accountants to apply for government assistance schemes.  

 A financial controller of a medium-sized retail business in South Africa said that the skills and talents that they valued most in their account were regulatory compliance.  

“Hiring an accountant today is about more than just accounting,” said the CEO of a medium-sized security business in France.

“My accountant gives me information about the law in France so that I can take charge of the new laws and change accordingly.” 

This doesn’t only apply to compliance with accounting legislation. The owner of a small technology business in Spain said: “I know they’ve been doing a lot about GDPR. And sometimes I needed legal advice. When I discussed it with them, they recommended a lawyer.”  

 Businesses across the board felt that having their accountants assist them with changing regulations was one of the ways they expected them to accompany them on their business journeys. 

“Because the company is growing,” said the CIO of a medium-sized French business,

“It means that they are doing more in terms of work because we have more things to do. This includes payroll and covering all the government regulations like VAT.” 

The executive of a medium-sized energy business in Australia said that their current accountancy firm has a knowledgeable team, all of whom are experts in taxation, corporate finance, and compliance. “We can rely on their team,” they said. “These are the main factors that keep us loyal.”  

Key takeaway 

Staying up to speed with ever-changing regulations is a challenge, particularly because clients expect immediate in-depth and broad knowledge of changes. Any industry body of which you are a member will certainly be tracking these changes, but it also pays to regularly visit government websites. 

 Your software vendor can also offer support. Often when new legislation requires additional functionality to be added to the software, the support documentation will explain this need, and also the law that requires it.  

 Accounting Practice Improvement 3: Include future generations 

 If you want to grow your practice in terms of compliance offerings or improve your digitalisation for the benefit of clients, where should you start?  

 While it is possible to start training in these areas, a better solution – one that should underpin any plan to improve your practice – is to embrace the new generation.  

 In this year’s Practice of Now survey, 84% of respondents agreed that the biggest impact on their working practices and culture came from engaging with employees from younger generations, who bring with them unique expectations and attitudes. Practices are forced to change when they employ the younger generation, whether it is to keep them or to attract them.  

 In South Africa, respondents plan to rely on their reputation as a good employer (48%) and their reputation for industry excellence (39%) to attract the best talent. They also hope to stand out by offering competitive compensation (36%), flexible working practices (35%), senior-level diversity (31%), an attractive company culture (24%), and potential for rapid development (23%). 

 Millennials and Gen-Zers (those whose adulthood started in the 21st century) bring with them an ability to embrace change, a strength which many of the older generations lack. 

 Be it implementing cloud-based technology, finding technical solutions, digitalising workflows, or finding new business in alternative spaces, millennials are a crucial asset to traditional firms that are looking to grow and compete in the digital landscape. Their ability to learn the compliance landscape as it exists today, without being held back by habits from yesteryear, certainly counts as an advantage. 

 Key takeaway 

How do you go about attracting younger talent to your practice?  

1. Fish in the right pool. The Practice of Now survey asked over 1,000 US respondents where they look for new talent for their firms. Nearly 40% said they looked to social media platforms such as LinkedIn and Facebook. This far outweighed traditional channels like college recruitment efforts, which only 15% of respondents used. Younger people live their lives on social media, and as such, they expect you to be there too.  
2. Hire from outside accounting backgrounds. Nearly 90% of respondents claimed that they would be amenable to hiring from areas like project management, customer services, training, and other backgrounds. To find the younger generation who would meet your needs, it could be time to recruit youngsters who don’t necessarily hold an accounting qualification. 
3. Be flexible. When asked the main reason that new staff join their practice, rather than their competitors’, 38% of respondents claimed it was flexible working practices. PwC’s Millennials at Work research, which talked to over 4,000 graduates, reported that flexible working conditions were second only to training and development in terms of most-valued benefits from an employer. Flexibility trumped cash bonuses, healthcare, and pensions.  

 Conclusion 

While the challenges brought by 2020 have been difficult, they have also presented numerous opportunities. These opportunities would be wasted if accounting professionals didn’t use the lessons therein to grow stronger, more competitive practices. The Practice of Now 2020 results show that converting the needed emergency response into new service offerings could become more necessity than nicety if practices want to grow in the years to come.