The Time Has Come For Automated Accounting
December 4, 2023
A family office article in Forbes describes how “2023 will not be about doing things wildly differently but rather, doing things right. By professionalizing (sic) family wealth, embedding long-term compensation benchmarks, retaining the right talent and decentralizing (sic) risk, Family Offices will thrive in yet another era of uncertainty.”
One critical area of work in an office that needs to be done right are the processes and workflows around accounting. Another Forbes contributor points out that “perhaps the most affected industry of the automation boom are accountants themselves. In times past, transaction-level bookkeeping and accounting were high-profile careers completely reliant on human data entry. Current technology is advanced enough to completely dry up the need for people in these tasks. Manual reconciliation and redundant tasks are shifting at a high rate. As transactional accounting is more democratized by low-cost software, companies need a higher level of financial service.”
Better Technology Leads to More Effective People
There’s a tendency to fear that smarter technology will result in replacing experienced people. However, in a family office, the relationship between software and staff is more symbiotic: the right technology platform reduces the menial workload for personnel so that they can instead focus their attention on strategic decision-making and higher value contributions.
The idea is that accountants in a family office can now become a higher level, value-add resource. Their skills can be deployed for analytics and proactive work, rather than reactive, historical data recording. When good, reliable data can be provided to a human at the right time for decision-making, that person and the work they do is exponentially more effective – and more valuable.
In a family office, effective automation involves streamlining accounting processes and standardizing data inputs and workflows. The result is more accurate results in less time. In 2023, this automation needs to be an area of focus: a family office must look at its technology and determine how it can help do more with less. This chart from McKinsey is enlightening:
The McKinsey article goes on to make the point that organizations need to rethink people and processes around the technology. “Today, processes in the finance function are purposefully designed to harness the collective brain power and knowledge of many people. The temptation for managers as they implement an automation program is to follow that same pattern, retrofitting a particular automation tool into the existing process. Moreover, managers often see automation as a technology initiative that can be led by the IT department. As a result, companies end up with a patchwork of incongruous technology tools that automate separate and distinct parts of the process. This approach is fine for capturing the first 5 percent or so of automation’s impact. But unlocking the full potential requires a fundamentally different way of thinking. To capture that potential, managers must be willing to reengineer their processes completely.”
Streamlined Automation for the Family Office
This might sound too difficult for a family office, but it isn’t. You can now buy technology specifically designed for a family office and the way it works. The use of a purpose-built technology platform to automate accounting processes also helps an office improve professional development and be prepared for the future in terms of:
- Time Savings
- Cost Savings
- Greater Accuracy
- Faster Turnaround Time
- Superior Family Experience
- Promoting Upskilling
- Real-Time Decision-Making
- Improved Information Accessibility
All of this gives insight as to why accountants and the real skills and knowledge they have will become even more important to a family office. It means accountants can more easily fulfil the role of trusted advisors (as they should be), with stronger family relationships, sustained involvement, and a personal touch. They should seize the opportunity for more interesting and valuable work that can only benefit both themselves and the office. This collaboration is the path to the family office of the future.
Why the Right Family Office Software is Even More Important in a Sliding Economy
More than a few economists are now predicting a recession in late 2022 or in 2023. Then again, others say a downturn will be averted. Either way, most people think that a family office is well protected and would not be affected much by a recession. History says otherwise.
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Murali Nadarajah, CIO at Eton Solutions, co-authored this article with AtlasFive AI-tool EtonGPT. EtonGPT is the first family office large language model that has been fine-tuned with family office best practices. Built on GPT-4, it operates on a secure, private instance for each client.
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