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Ask the Experts: Does automation stack up financially?

Christopher Overton

Many SMEs are fearful of automation, envisioning high costs and lots of tech replacing human workers. But as chartered tax adviser Christopher Overton explains, neither of those are necessarily true.

Automation has firmly entrenched itself as a business trend of our time and more and more SMEs — from coffee shops to business services firms and manufacturing operations — are realising that there are aspects of almost any business that can be automated to drive efficiencies and profit.

For some business owners, particularly true of SMEs and family businesses, automation isn’t on the agenda because it is not largely understood.

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Most of my client base is in South Australia, an economy synonymous with family businesses and other SMEs, and I find myself discussing automation with clients on an almost daily basis. While some are eager to understand how technology can benefit their business, others require more handholding… and convincing!

Start with why

The first misperception to address, especially with older business owners, is that automation is not about replacing people with machines. It’s about making people more productive.

If you can turn a payroll function from an eight-hour job to one hour by using software properly, that’s seven hours of time that an admin person can dedicate to a more productive pursuit: such as business forecasting, using dashboards also generated by accounting software, or chasing new sales leads.

Automation can make a business more competitive, sustainable, scalable, profitable and, where applicable, more attractive and valuable for sale.

Understand how

Understanding how automation can benefit your business is the first important step to take. I find that many business owners are unaware of automation services that are readily available to them and that can be implemented with minimal fuss.

Quality management systems based on ISO9001 standards often incorporate software solutions like SharePoint and Smartsheet, which are easy-to-use technologies with database back-ends that can automate a wide range of business systems and processes.

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Others include Hubdoc and Receipt Bank, which extract and record the key information from your receipts and invoices using optical character recognition, removing the need for manual data entry and processing.

Float is a cash flow forecasting tool that combines your bills, invoices and other actuals with the budgets you set, so that you can instantly see a snapshot of your cash flow at any given time.

The first step in the process of understanding how automation can add value to your business is to identify those tasks within the business that are the most time-consuming and repetitive. Ask staff to list the things they hate doing on a regular basis in the business.

For example, many hospitality, retail or trade businesses have a staff roster that requires ongoing management. In businesses with sizeable staff numbers spread across several locations, managing a roster manually can be a nightmare, and if the staff member responsible for managing the roster is unable to perform his or her task one day, the business could grind to a halt.

With easy-to-use software like Deputy or T Sheets, businesses can manage schedules on one simple but very effective platform that has a host of other benefits to improve business efficiencies.

Identify the tasks that are the hardest, most time-consuming, most important to the business, will have the highest return on investment — so start with these. Google how automation products are being used in your industry and you’ll soon realise how pervasive they are.

Get staff involved

If your plan is not to replace staff with automated systems but to use automation to enhance their performance, then make sure staff know this is the case.
Getting staff involved in finding and implementing solutions is highly recommended, as it will educate them and secure their buy-in.

Automation can be a touchy subject. Think about how staff might perceive it and manage the process collaboratively and transparently.

Work to a plan

Once you have identified areas of the business that could be automated, draft an automation plan.

The most logical first step in creating an automation plan is for the business to approach its accountant or business adviser to see if they have any templates they can use or advice to help expedite the process.

It’s usually not a good idea to automate more than one thing at a time, as it can be disruptive and risky. Automate one process at a time and allow time for the business to get used to a new way of doing things.

Your plan should not just be about the implementation of the automated solution, but how it affects:

  1. Staff: If you are going to be freeing up time for staff, make sure you replace time saved with other responsibilities, and that you have updated job descriptions to cover you from a performance management perspective. If you have staff who are interested in tech and automation, get them involved!
  2. Customers: If an automated process is going to replace interaction between you or your staff with customers or other stakeholders, your plan should contain a solution to maintain the quality of interpersonal relationships between the business and its clients.
  3. Profitability: Work with your accountant to quantify the return on investment. It’s always useful to attach value to such initiatives, as it guides the implementation of other solutions.

Automation solutions are being made increasingly easier for businesses to adopt, because automation has become a competitive industry in its own right. Look at automation not as a nice-to-have extra, but as a means to stimulate growth in its own right.

Christopher Overton is a chartered tax adviser and director of Bartley Partners Accounting.

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Ask the Experts: Does automation stack up financially?
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