The Modern Accountant | ⏱ From 4 Hours to 20 Minutes: The Power of Payment Automation

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From 4 Hours to 20 Minutes: The Power of Payment Automation

What does best-in-class operational efficiency actually look like? For Bookkeeping Partner of the Year (2024), Accountability Edinburgh, it meant transforming payroll and supplier payments through smart integrations — cutting processing time from 4 hours to just 20 minutes.

From eliminating human error to building stronger client trust, this is a real-world example of how the right tools can elevate your CFO offering. Whether you’re already working with multiple clients or just starting out, this is a playbook worth watching.

Sector Spotlight 🌟

AI IN ACCOUNTING

AI's Rise Reshapes UK Accounting as Graduate Jobs Decline Amid Tech Advancements

UK's top accountancy firms are rethinking graduate hiring due to the rise of GenAI and offshoring. Deloitte, EY, KPMG, and PwC have reduced graduate intakes to manage costs and maintain partner returns amidst a quiet consulting market. KPMG's intake dropped by 29%, illustrating the sector's uncertainty. Meanwhile, AI tools are replacing duties traditionally performed by new graduates, tackling tasks like research and document summarisation.

Amidst these cutbacks, AI is also unveiling fresh avenues in AI assurance services. These services are becoming crucial, confirming AI models' performance and ethical compliance. As the UK positions itself as a global AI hub, even the government estimates AI could boost the economy by £200 billion. Yet, public trust in AI remains tentative, with only 42% of the public expressing trust. The accounting sector now faces a balancing act: harness AI's potential without eroding public confidence or future talent development.

TAX LIABILITIES ANALYSIS

Tax Gap Decreases to 5.3% of Liabilities for 2023/24

HMRC's recent update reveals a modest decline in the tax gap for the fiscal year 2023/24, dropping to 5.3% from 5.6% in 2022/23. Despite this improvement, it's intriguing that earlier estimates placed the tax gap at a mere 4.8%. This raises questions about the reliability of such forecasts. The persistence of the tax gap at around 5.6% in recent years suggests that closing it may remain a challenging endeavour, despite governmental aspirations to recover an additional £7.5bn through fiscal measures.

Notably, the corporation tax gap, which had surged to 17.6% in 2021/22, has eased to 15.8%, predominantly driven by small businesses. This pattern illustrates the complexity of targeting tax compliance across different economic segments. HMRC recognises criminal behaviour, including evasion and attacks, as key contributors, accounting for 28% of the gap. Interestingly, while non-payment's share decreased from 14% to 12% within a year, small businesses continue to account for a growing portion of the tax discrepancy, indicating areas where HMRC might need to concentrate its efforts.

CFO EVOLUTION

Changing Pathways as the CFO Role Has Evolved Over Two Decades

Catherine Birkett, from GoCardless, discusses the evolution of the CFO role over two decades, noting its expanded scope and the growing importance of data literacy. Today's CFOs, she observes, require a strong background in financial planning and analysis and often come from diverse fields such as M&A or corporate finance, rather than traditional accountancy paths. The ability to interpret vast data is crucial, alongside the need for regulatory compliance and ESG understanding, making the role more challenging yet rewarding.

Despite these changes, Birkett maintains that an accountancy qualification remains valuable, providing a solid understanding of financial fundamentals. She also highlights the consistent challenge of forecasting, emphasising the need for flexible tools like spreadsheets in dynamic environments. Moreover, she describes the modern CFO as a "co-pilot" supporting the CEO, responsible for strategic direction and risk assessment. Birkett anticipates AI's role in shaping future CFO duties, likely enhancing efficiency but still requiring human insight to interpret data trends.

FINANCIAL ETHICS

Whistleblowing as a Mandatory Ethical Duty for Accountants in Professional Practice

Whistleblowing in the accounting sector is not merely a commendable practice but a professional obligation. Accountants must understand the gravity of reporting non-compliance with laws and regulations (NOCLAR). The ICAEW Code of Ethics mandates accountants to act with integrity and disclose any wrongdoing in the public interest, even though it may clash with confidentiality duties.

Recent initiatives underline the vital nature of whistleblowing. The UK aims to follow in the footsteps of the US, rewarding whistleblowers a portion of financial recoveries. Despite this, the accounting field still lacks active whistleblowers, a situation that may shift with SEC-style rewards. Accountants must support ethical cultures by encouraging transparency and addressing NOCLAR robustly. Embracing this duty not only upholds professional integrity but can avert significant financial downfalls.