A digital transformation – the strategic adoption of digital technologies – for accounting firms does more than simply automate processes. It enhances data collection, improves workflows, and enables strategic decision-making.
Digital transformation is the future of accounting. It is a vital step that today’s accounting firms must take to remain compliant, profitable, and successful. There are four ways a digital transformation will enhance the viability of an accounting firm, along with specific tools these companies will need for successful adaptation.
Lastly, accounting professionals must factor in the challenges they may face before getting started with a digital transformation. Doing so will help them avoid an adverse impact, anticipate possible pain points, and reduce downtime and unforeseen delays.
4 Ways Digital Transformation Promotes Accounting Firm Success
More than 1.27 million accountants and auditors are employed in the United States. To stay competitive, accounting firms must adapt to digital transformation.
Unfortunately, many small to medium-sized businesses (including accounting firms) are delaying digital initiatives. Manual workflows and legacy systems are familiar and comfortable. Learning new processes seem too demanding to manage.
There are also data privacy and security issues along with compliance requirements associated with migrating sensitive data to the cloud. However, accounting firms can no longer afford to wait to modernize their processes. Not if they wish to remain successful in a competitive industry like the accounting sector.
To stand out, firms must embrace digital transformation. Here is how digitizing processes enhances an accounting firm’s success:
1. Enhanced Security
When accounting firms use cloud-native solutions that provide a dynamic foundation, these systems come with data security and protection built into them. Developers designed these programs specifically for the compliance needs of the accounting sector.
Continual monitoring, integrated anti-virus, anti-ransomware tools, and automatic software updates are incorporated into the platform. Furthermore, cloud-based data centers protect firms from accidental data loss.
2. Smart Use of Technology
Digital processes enable accounting firms to easily track billable hours, project statuses, and performance metrics. It provides insights by converting raw data into usable segments and improves efficiencies by streamlining operations.
Automating tedious accounting tasks keeps talented professionals focused on meaningful work. Firms can also cut costs and discover new revenue streams.
3. Improved Staff Recruiting and Retention
More than half (62%) of companies (in every sector) work remotely at least occasionally. A digital transformation enables firms to recruit a diverse crew of talented accounting professionals regardless of where they live.
Digitizing processes offers flexibility that promotes a healthy work/life balance. It ensures that employee satisfaction and retention remain high and reduces churn among staff.
4. Satisfied Clients
Clients expect their accountants to be available whenever necessary, especially during tax season. They want accounting firms to offer services across various digital channels that are available on-demand around the clock.
Cloud-based accounting solutions enable firms to provide their clients with mobile apps and web-based client portals. Clients can pay invoices, securely share information and e-sign documents. These convenient services can help keep an accounting firm’s clients satisfied and loyal.
Tools Accounting Firms Need
Cloud technology is the fundamental tool firms will need to transition to digital processes. Cloud migration enables accounting professionals to work and interact virtually in real-time while using the same data. It also allows staff to work remotely, enabling flexibility in a once-rigid industry.
Artificial intelligence (AI), the Internet of Things (IoT), and robotic process automation (RPA) tools are necessary for a successful digital transformation. These technologies decrease staff workloads so they can get more done in less time. It also:
- Results in an increase in job satisfaction
- Provides a better work/life balance
- Enables staff to deliver more value and impact to clients
Challenges Accountants Face from a Digital Transformation
Cultural and practical barriers create challenges for accounting firms to move into a digital transformation. Roughly 60% of those working within the accounting sector are over the age of 40, making it difficult for the older workforce to adapt to technological advancements.
Transitioning to automated processes from manual procedures requires an upfront investment that some firms are not financially prepared to make. Those firms still using manual processes also struggle to attract younger talent, and these are just a few of the difficulties accounting firms combat. Other challenges they face during the digital transformation include:
- Recognizing what processes to update
- Weighing the ROI potential
- Choosing a service provider
- Implementation and downtime
- On-boarding staff and clients
It is difficult to justify using valuable, billable hours for the digital transformation process, especially if it doesn’t directly generate revenue. The problem with placing these upgrades low on the list of priorities is that antiquated systems adversely impact the success of today’s accounting firms.
The initial investment can pay out significantly when implemented correctly. In some cases, it can be the difference between making it through one more tax season or closing down operations due to a lack of technological advancements.
Getting Started with the Digital Transformation
A successful transition to digital processes requires that firms be mindful of the scope of the transformation. They must identify where the starting point is by considering the following questions:
- Where will the firm experience the most impact (positive or negative)?
- What substantial pain points will there be?
- What can be done to reduce downtime or unforeseen delays?
- When would be the best time to make the transformation?
Digital transformation is a journey. It is not a destination. Accounting firms will continually adapt to new technology and adopt additional digital processes as innovations advance.
CPAs and accounting professionals must keep their companies viable and competitive. That means prioritizing a digital transformation.
At Tech Guru, we have the experience accounting firms need to solve technology challenges associated with digital transformation. We provide our clients with the resources to make the change. We are their tech consultants, installation specialists, and service desk professionals all in one.
Is it time for your accounting firm to make the digital transformation? Schedule a call with one of our technology strategists today.