How Automation is Transforming the Accounting Industry

In recent years, automation has begun to revolutionise nearly every industry - and accounting is no exception. As businesses grapple with increasing volumes of financial data, regulatory complexity, and demand for real-time insights, automation is reshaping how accounting functions operate.

From streamlining transactional tasks to enhancing decision-making with predictive analytics, automation is not merely a technological upgrade - it's a fundamental transformation of accounting practice. 

The Shift from Manual to Automated Accounting 

Traditionally, accounting has been rooted in manual data entry, spreadsheet manipulation, and paper-based documentation. These processes are time-consuming, error-prone, and limit the ability of finance teams to focus on strategic work. Automation changes this paradigm by allowing machines and software to handle repetitive, rules-based tasks with greater speed and accuracy. 

Cloud-based platforms, artificial intelligence (AI), robotic process automation (RPA), and machine learning are the key drivers behind this shift. Tasks such as invoice processing, bank reconciliations, payroll, and expense reporting are increasingly being automated. These tools can ingest data from multiple sources, perform reconciliations, and generate journal entries – with limited human intervention. 

Key Areas Being Transformed by Automation 

1. Bookkeeping and Transaction Processing 

One of the most significant areas of transformation is day-to-day bookkeeping. Automation tools can capture data from invoices, bank feeds, receipts, and integrate directly with accounting software like Xero, QuickBooks, or MYOB. This reduces the need for manual data entry and minimises human error. In some cases, businesses can process thousands of transactions automatically, freeing up bookkeepers to focus on analysis rather than input. 

2. Accounts Payable and Receivable 

Automation is streamlining both sides of the ledger. For accounts payable, intelligent OCR (optical character recognition) systems can scan and categorise invoices, route them for approval, and automatically schedule payments. For accounts receivable, tools can generate and send invoices, track outstanding payments, and trigger reminders. These systems help shorten the cash conversion cycle and improve working capital management. 

3. Financial Reporting 

Closing the books used to be a laborious monthly ritual. Now, automation allows for continuous close processes where data is updated in near real-time. Dashboards provide instant visibility into KPIs, enabling faster and better-informed decisions. Automated reporting tools can also pull from multiple data sources - ERP systems, CRMs, bank accounts - and compile them into pre-formatted reports, reducing the burden on finance teams. 

4. AI-Powered Forecasting and Budgeting 

With the rise of AI and predictive analytics, forecasting has become more accurate and dynamic. Rather than relying solely on historical trends and static spreadsheets, businesses can now model multiple scenarios in real-time, incorporating variables like market changes, customer behaviour, and macroeconomic indicators. This enables more agile planning and strategic decision-making.

Implications for Accountants and Businesses 

Adoption of automation tools is accelerating in New Zealand. According to Xero’s 2024 Small Business Insights report, over 70% of New Zealand SMEs are now using cloud-based accounting tools — a marked increase from just over 50% five years ago. This trend reflects a growing recognition of the value automation brings, not just in efficiency but in enabling real-time insights and strategic decision-making. 

• Evolving Role of Accountants 
  Automation is not eliminating accountants - it’s evolving their role. As mundane tasks are automated, accountants are moving up the value chain to become strategic advisors. Their focus is shifting from data entry to data interpretation. The modern accountant is expected to possess analytical skills, business acumen, and the ability to communicate insights clearly to stakeholders. 
  
  For example, a management accountant today might spend less time compiling financial reports and more time explaining the financial impact of new product lines or pricing strategies. Similarly, auditors are moving towards continuous auditing, where they assess transactions in real-time using automated tools rather than retrospective sampling. 
  
  
• Increased Efficiency and Accuracy 
  Businesses that embrace automation report significant time and cost savings. For instance, automating accounts payable can reduce processing time by 70% or more. Similarly, automated bank reconciliations can save hours of manual work each week. The reduction in human error not only improves accuracy but also reduces the cost of correcting mistakes later on. 
  
  Moreover, automation enables businesses to scale more easily. As transaction volumes grow, automated systems can handle the increased workload without requiring proportional increases in headcount. 
  
  
• Real-Time Financial Decision Making 
  One of the most powerful advantages of automation is real-time data access. Businesses can make informed decisions based on current financial data rather than waiting weeks for month-end reports. This is particularly valuable in fast-moving industries where quick pivots can mean the difference between profit and loss. 
  
  Finance teams can also identify anomalies, trends, and risks earlier. For example, a dip in gross margin or a spike in overdue receivables can be flagged by the system automatically, prompting faster investigation and corrective action. 
  
  
• Risk and Compliance Management 
  Automation strengthens internal controls by enforcing consistent workflows and approval processes. It reduces the likelihood of fraud or oversight by providing clear audit trails and reducing opportunities for manipulation. With integrated systems, compliance becomes embedded in the process - reducing the risk of penalties and reputational damage. 

Challenges and Considerations 

While the benefits of automation are substantial, implementation requires careful planning.

Key challenges include: 

• Change Management: Employees may resist automation due to fears of job loss or disruption. Successful adoption requires clear communication, training, and involvement of staff in the transition process. 
• Integration with Legacy Systems: Many businesses operate with a mix of old and new systems. Ensuring seamless integration and data consistency is essential for successful automation. 
• Data Quality: Automation relies on clean, structured data. Poor data hygiene can lead to inaccurate results and undermine confidence in automated outputs. 
• Cybersecurity: As accounting systems move online and integrate with various platforms, protecting sensitive financial data from cyber threats becomes paramount. 

The Future of Automated Accounting 

The future of accounting is not just automated but intelligent. Emerging technologies such as generative AI, are poised to further transform the industry. For instance, conversational AI can assist in financial analysis and report writing. 

Smaller businesses, once limited by cost and access to expertise, can now leverage automation to compete with larger players. Meanwhile, accounting firms are expanding their advisory services, offering clients deeper insights backed by robust data. 

As the pace of change accelerates, continuous learning and digital literacy will be essential for accounting professionals. Those who adapt will find themselves at the forefront of a more strategic, value-driven profession. 

Final Thought

Automation is no longer a futuristic concept - it’s a current reality transforming the accounting industry. From increased efficiency to enhanced strategic insight, the benefits are clear. Businesses that embrace this transformation will not only improve their financial operations but gain a competitive edge.

For accountants, automation is not the end of the profession but the beginning of a more empowered and impactful role, the outcome being -  better service delivery for clients. 

In this new landscape, the mantra is simple: automate the routine, elevate the human. 

Our behind the scene AI-powered innovations could make your life easier, contact the Andersen team today to learn more about our services.

Author - Darren Roche