Where Accountancy Practices Should Start With Automation (Hint: It's Not AI)

Every accounting conference now has the same agenda: AI is coming for your practice.

You hear about machine learning, predictive analytics, and AI-powered chatbots. You leave feeling excited and anxious—worried you're falling behind if you're not implementing AI everywhere.

Here's what those presentations don't tell you: AI is a distraction if you haven't automated the boring stuff first.

Why AI Obsession Is Distracting Most Firms

While accounting firms chase AI implementations they don't actually need, they're ignoring automation opportunities that would save hundreds of hours immediately.

The typical practice evaluates AI tools for document analysis while their bookkeepers manually calculate accruals in Excel at 9 p.m. every month-end.

That's not strategic modernisation. That's technology FOMO.

The firms winning with automation aren't deploying cutting-edge AI. They're the ones who've systematically eliminated their most time-consuming manual processes—starting with the least glamorous ones.

The Hierarchy of Automation Value

Not all automation delivers equal returns. Here's the hierarchy most firms get backwards:

Tier 1: High-Frequency Manual Processes Repetitive tasks that happen for every client every month. Accruals, prepayments, revenue recognition, recurring journal entries. Automate one hour per client per month, and you've created 600 hours per year for a 50-client practice.

Tier 2: Workflow and Task Management Automated task assignment, reminders, file organization. Reduces coordination overhead but doesn't directly reduce hours worked.

Tier 3: Enhanced Analysis and Insights AI-powered commentary, predictive analytics, anomaly detection. Improves service quality but only valuable if you have capacity to deliver advisory—which requires Tier 1 to be solved first.

Most firms try to implement Tier 3 before automating Tier 1. This is backwards.

Start boring. Win big.

Why Month-End Is the Highest-Leverage Place to Begin

If you automate only one thing, make it month-end. Here's why:

Frequency: Happens every month for every client. A 90-minute time saving per client becomes 900 hours per year for 50 clients—five working months of capacity.

Criticality: Month-end determines when management accounts are ready, which determines when client conversations happen, which determines how strategic your practice can be.

Bottleneck effect: Month-end determines how many clients you can serve. Remove this bottleneck and you unlock capacity across your entire practice.

Error concentration: Manual month-end processes are where most accounting errors occur. Automate these and you simultaneously save time and improve accuracy.

Consider the alternatives practices typically automate first: receipt capture apps save maybe 15 minutes per client per month. Client portals improve communication but don't reduce month-end time. AI email drafting saves minutes per email.

All useful. None deliver the leverage of month-end automation.

Tasks That Should Never Be Manual Anymore

Accruals

Every expense incurred but not yet invoiced needs an accrual journal. Insurance covering multiple months. Services received but not billed. Annual subscriptions expensed monthly.

Manual: Maintain spreadsheets, calculate monthly amounts, post journal entries into Xero each month-end.

Automated: Accruals post automatically based on contract terms you define once. Your team reviews for accuracy, not creates from scratch.

Time saved: 20-45 minutes per client per month.

Prepayments

Any payment made in advance needs allocation across the periods it covers. Annual software subscriptions. Quarterly insurance premiums. Prepaid rent.

Manual: Track in Excel, calculate allocations, create and post journals, update spreadsheet monthly.

Automated: Prepayment rules allocate expenses automatically. Journals post into Xero without human intervention.

Time saved: 15-30 minutes per client per month.

Revenue Recognition

For businesses with subscriptions, multi-month contracts, or advance payments, revenue needs recognition in the correct period.

Manual: Review contracts, calculate recognised vs deferred revenue, create manual journals, reconcile balances monthly.

Automated: Revenue recognition rules automatically allocate income across contract periods. Recognition journals post continuously.

Time saved: 30-60 minutes per client per month for subscription businesses.

Add these up: 1-2 hours saved per client per month. For 50 clients, that's 600-1,200 hours per year. That's transformation, not incremental improvement.

How Automation Changes Capacity and Pricing Power

Let's do the math for a typical 50-client practice:

Before automation:

• Month-end: 90 minutes per client = 75 hours per month

• Annual time: 900 hours (5.5 working months)

• Constraint: Can't add clients without hiring

After automation:

• Month-end: 20 minutes per client = 17 hours per month

• Annual time: 200 hours (1.2 working months)

• Time freed: 700 hours per year

• Constraint: Removed—can serve 2-3x more clients

  
  

That 700 hours is capacity for growth, advisory services, or work-life balance.

The pricing shift: Automation doesn't mean lower prices. When you're the firm delivering management accounts on day 1 with time for strategic discussion, while competitors are still processing journals on day 4, you can charge more—even though your costs are lower.

A Simple Automation Starter Checklist

Week 1: Audit Current State

• Track time spent on month-end for 10 clients

• Document manual journal entries posted every month

• Calculate monthly time cost of accruals, prepayments, revenue recognition

Week 2: Prioritize

• Which tasks happen for every client every month?

• Which consume the most total time?

• Which are error-prone or require specific expertise?

Week 3: Implement Month-End Automation

• Set up Xero automation for accruals on 10 pilot clients

• Configure prepayment rules for recurring expenses

• Implement revenue recognition for subscription clients

• Train team on reviewing automated journals

Week 4: Measure and Scale

• Compare month-end time before and after

• Document error reduction

• Roll out to remaining clients

• Calculate annual capacity gained

  
  

This isn't multi-year transformation. It's a one-month project with immediate, measurable results.

Start With What's Boring, Not What's Buzzy

AI will eventually transform accounting. But today, the highest-value automation opportunity is eliminating the manual journal entries your team posts every month.

Accruals. Prepayments. Revenue recognition. Not exciting. Not conference keynote material. But automating them will save your practice hundreds of hours this year, reduce errors, and unlock capacity for work that requires human expertise.

While other practices evaluate AI tools they don't need yet, you can be the practice that's automated month-end, serves clients faster, and has time to think strategically about where AI might actually add value next.

The future of accounting isn't faster AI—it's smarter automation of the work that should have been automated years ago.

Ready to automate month-end and unlock real capacity? Spread.Finance brings accruals, prepayments, and revenue recognition automation directly into Xero—making accountants' lives easier by reducing manual journal entries and improving month-end accuracy.