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A guide to digital transformation for accountants

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According to Sage’s Practice of Now Report 2019, 85% of accountants feel that the profession needs to speed up its rate of technological adoption in order to remain internationally competitive.

This is yet another sign of the remarkable cultural shift within accountancy that the report has identified. It also highlights that many accountants know there is a deficit in an important business area.

When firms were questioned about why they believe the profession is trailing when it comes to technology adoption, they said that lack of time (13%) and money (38%) to invest in digital transformation were big reasons, while 25% believe a lack of expertise is holding them back.

Starting your digital transformation plan

If your practice is in dire need of modernisation and digitisation, here are some steps that might help kickstart your processes:

  1. Know what you’re aiming for

What is the desired outcome of your digital transformation plan? Cost savings? Greater efficiencies? Better client service? Improving your public image with clients who require a technological approach from their accountancy firm? Maybe it’s a combination of these.

While these reasons might seem obvious, it’s necessary to map them out, in order to clearly understand what you want to achieve. Start by noting five to 10 benefits you believe the implementation plan should bring about. Once you’ve made your list, add details to each, and be as specific as you can. If you’ve listed cost saving, for example, try to add the amounts. If you’re hoping to grow your client sign-up rate, can that growth be expressed as a percentage?

  1. Allocate the implementation plan 

According to the basics of project management, a hierarchical structure is best, with one person at the top of the organisational tree owning the project. This person will have in-depth knowledge of the plan, even if they did not create it (e.g. the plan might be created by one person and assigned to another member of staff).

This person will perform tasks and make decisions regarding budgeting and staffing for implementing the plan. They might create teams to handle specific parts of the implementation, some of which are highlighted below.

The buck stops with them. They will be the point of contact for all queries and will ensure the smoothest possible rollout. The ideal person to perform this function would be someone senior within the practice, who has experience managing transformation.

  1. Keep track of the implementation

Documentation is another important component in project management, to ensure that everyone can see – both at a glance and in detail – when things are due to happen.

It is often necessary to split implementation into several phases, and to create specific plans for certain parts of the rollout.

If your practice is already using project management software, you can use this to successfully deploy the plan. Creating a few Gantt charts will also help you list milestones. Microsoft Excel also has several built-in templates you can use.

  1. Agree on touchpoints and sign-offs

When doing a major upgrade project, people are often eager to start and don’t do enough preparation. Planning ahead can help avoid unnecessary time and money costs later on.

Touchpoints and sign-off processes should be agreed on from the outset. How will you know when you’re halfway through the project? Or even when you’re finished?

Look at the volumes you are working with, and what tools you have to support this. What kind of timeframe are you looking at for completion? Weeks? Months? If you have decided on a gradual rollout that will only affect new clients, it is possible that implementation could take years.

Practice of Now 2019

The latest research reveals evidence of a cultural shift within the industry as it prepares for the coming decade. Recruitment, skills and training, business practices, service offerings and technology are all evolving.

Download the report

What to focus on

These are the main areas that firms focus on when embarking on digital transformation projects.

Client list

The majority of the work within a digital transformation will be determined by your client list. You will need to ensure that they will be compatible with your new way of working. While some clients will be entirely amenable to fitting in with this new way of working, others might not.

Usually a client list can be split into two categories. The first consists of the businesses whose attitudes, experiences, and interests make them perfectly suited to the first phase of your implementation plan. They might already be using cloud-based accounting software, or they might just enjoy exploring the benefits of new technologies.

The second category consists of those who are less amenable to change. These could be the clients who simply hate accounting, or who still use paper-based ledgers and a shoebox of receipts.

It might be helpful to create a series of scripts that can be used when talking to these categories of clients. The script should emphasise the benefits of the digital transformation and provide concrete details regarding its implementation.

Staff training

Skimping on staff training when making transformation plans is a common mistake within businesses. This is because training can consume large amounts of time and money, and people assume that all accounting software is fundamentally the same, especially to those training in accounting.

While there will be staff members who take to the new software with ease, there will also be those who don’t find it quite as simple. Without training, these people may come to dislike the new software. This won’t help the transformation you are hoping to achieve, and in some cases, these staff members might even revert to the old software, which could be catastrophic.

Ensuring all staff are trained is essential. Even staff who might not really need it are likely to discover tricks and tips they would otherwise have missed, and that can make everyone’s lives easier.

Software vendors offer training, as do consultancies. If costs are a concern, you could select one person to be trained in the new software, who can then train everybody else. While this is not ideal, with free resources such as webinars and PDF manuals to supplement the training, it might suffice.

New technology

A digital transformation plan will see new technologies being introduced into the workplace. This could include both software and hardware. A key aspect of cloud-enabled accounting is that mobile devices can be used, opening up the possibility of working wherever there is an internet connection. Staff will need to be made aware of this.

With this new focus on mobile, many firms are able to save on IT costs by having a Bring Your Own Device (BYOD) policy that allows staff to use their own phones and tablets to perform work tasks. This offers staff a greater sense of control and limits the number of devices they need to carry around.

Your BYOD policy should be stipulated in your IT policy, to ensure staff understand the basics of IT security. This includes not sharing passwords and installing anti-virus software on their devices. With the GDPR and POPIA in place, any data breach potentially carries serious penalties. This needs to be communicated to staff individually, and perhaps even written into their employment contracts.

Cultural change

While the above advice is useful, we cannot assume that digital transformation is as simple as implementing new technology. You need to remember why you’ve chosen to make the transformation.

The Practice of Now 2019 report found the 49% of accountants had formally examined their business practices over the last year, and 26% have done this over the last five years. This points to a profession that is building for the future.

A fundamental cultural change in the way your practice operates is what drives any digital transformation and is what will be delivered once the upgrades are completed. While you will still be doing your usual work, such as compliance or auditing, you’ll be adding significant extra potential and capacity to also do other types of work.

This significant cultural change needs to be communicated to your staff, and even to your clients, and basic training will need to be offered. Everyone should know that you now have the potential for new business advisory services, and an even more dynamic and responsive service for clients.

Once a digital transformation is implemented, your practice will be fully prepared for the future.