Automatic Bank Feeds 2017 Part 3: The Best Of Both Worlds?
In my first article in this series, I discussed the pros and cons of using automatic bank feeds, and in the second, I examined how you can use your accounting software to reduce or even eliminate the need for automatic bank feeds. In this third article, I want to examine how automatic bank feeds can be used effectively while avoiding the reservations I have previously expressed about using ‘screen-scraping’ software.
Whether I like it or not, automatic bank feeds are now a permanent fixture in the accountancy landscape, certainly for the foreseeable future. Given this, how can such software be used to good, robust and reliable effect?
In other words, is there a ‘best of both worlds’ scenario, where accountants can use automatic bank feeds while adapting existing processes without any professional compromise?
To my mind, the best use of automatic bank feeds is as a check or as a reassurance that your work is accurate and correct – i.e. to populate bank reconciliation. Some may think this to be a duplication of work (i.e. enter and import bank transactions), but bank reconciliation is just that, and automatic bank feeds allow you to obtain transaction data from a bank account quickly and easily. Having said that, I have previously noted that most banks allow you to export such information as a CSV file without the need for automatic bank feeds. So the above suggested use of bank feeds is unnecessary if you’re prepared to put a little bit of work into your existing systems and processes.
You may be using or considering automatic bank feeds due to client expectations and professional peer pressure. While such things should not encourage you to cut corners or avoid necessary work, to be competitive you too may want to advertise the fact that your practice uses automatic bank feeds. Prelude Accounts is currently talking with new potential partners about providing such functionality with safeguards in the context of the arguments presented in these articles and, importantly, avoiding screen-scraping methods.
In any event, you should think carefully about just how much you actually want to automate your role, as you may end up making yourself effectively redundant, at least in your clients’ eyes. It is becoming increasingly apparent that HMRC is looking to deal with businesses and individuals directly, bypassing accountants in the process. Their method of doing so will be through the internet, apps and associated software. A cynic could say that this would precipitate a surge in accounting and reporting errors with a resulting increase in the Exchequer’s revenue, but I couldn’t possibly comment. Whether or not this strategy proves successful, your clients are increasingly going to be asking if they actually need an accountant if everything ends up being either semi or fully automated. Why would anyone be willing to pay accountancy fees if an accountant is no longer needed?
I would therefore urge accountants to be proactive in investigating new technology including cloud accounting solutions, as they will need to see how they fit into this brave new world. To help you, I will continue to voice my opinion and advice through this blog and articles for the ICPA’s Accounting Practice magazine. In this changing landscape of software innovation, consider that the context should not be just how it can make your life easier, but how it can help you to maintain your service as trusted and indispensable to your clients. What do you offer that cannot be replicated by software?
In this series of articles, I have given examples and arguments as to how a forward-thinking accountant can ‘future proof’ their job in light of automatic bank feeds and other software and processes – make sure you note them, and build them into your sales narrative with your clients. If accountants are not careful, they will end up as just software resellers, licensing software to their clients who will then be tempted to cut out the middleman and deal with the software vendors directly. It is therefore important for accountants to work with companies such as Diamond Discovery to modernise accountants’ processes while not eliminating the need for the accountants themselves. Failure to react (positively and prudently) to automatic bank feeds and other new software could leave you behind the times and perceived as archaic as the abacus.