Tech Series: Brendan Woods, CEO of AutoEntry

What is AutoEntry?

Before starting up AutoEntry, Brendan Woods had been working in software for around ten years. He cites how working within hedge fund administration meant that he spent a lot of time with accountants.

From them, he learned that, when working for an accountancy practice, “there was an awful lot of data entry and bank statements […] preparing annual tax returns, and so on, for various clients.”

It was through speaking to these accountants that Woods began to understand some of the common pitfalls that had been largely accepted as part and parcel of the industry.

Woods “couldn’t believe how much manual data entry there was for accountants and, even though these were chartered accountants, they still had to do a lot of this type of work.”

And so AutoEntry was created—designed to help reduce paperwork by automating data entry into accounting software.

“It’s been an exciting journey,” Woods tells Accountancy Age. “We’ve built AutoEntry to automate data entry rapidly and across different document types, such as bank statements, credit card statements, sales invoices, and so on. Basically, the routine types of documents that accountants, bookkeepers and business owners receive, providing an automation solution so that they can focus on the more meaningful parts of the job. ’

“Be that a business owner – so they can focus on their business – or an accountant, so they can focus on the interpretation of the information that comes from papers that would ordinarily need to be typed up—and actually focusing on what meaningful insights can be given to clients from that information, and the actual compliance aspect of getting that information across to the client.”

“They are going to have to change their ways.”

The CEO of AutoEntry highlights how there is “generally a lot of inertia towards change” within accountancy. This is something Accountancy Age has considered before—using the argument that a ‘risk-averse’ industry is perhaps not as inclined to install changes than other industries.

“There are lots of practices that are slow to embrace the opportunities that they have with technology,” he says.

Making Tax Digital (MTD) will be a nationwide example of how well the accounting industry can cope with implementing technological change.

“As we move towards MTD, they are going to have to change their ways, so that they are compliant with the obligations of MTD, in terms of the digitilisation of data and workflow,” Woods continues. “It’s just a case of making sure that they don’t leave it until the last minute, because we’re conscious that there will be a lot of practices under pressure suddenly, so they will need to make a lot of changes.”

How can practices make sure that they are GDPR compliant?

GDPR regulations are of vital importance for industries that handle a lot of personal data; accountancy is no exception.

“If somebody is bringing you bags of paper data, what is your process from the minute that arrives in your posting station?” Woods asks. “How do you store that information? Where do you store it? How are you protecting the storage of that information? How are making sure that it’s not being used for any purpose other than the purpose it was given to you?”

The issue with retaining paper data is not just a matter of inconvenience, but also a matter of security when it comes to GDPR regulations.

Woods says: “Traditionally, there are a lot of practices that are storing years and years’ worth of personal data. They must think about how they are storing it. Could that information be accessed by people who don’t even work in the practice? There’s lots of different things to be considered.

“What we would recommend is for people to consider how to digitise more of this process, so that then they just have to focus on controlling who has access to the information systems used.”

Woods again emphasises that security breaches are “far more of an issue when you have physical paper data lying around.”

Do the current GDPR laws do enough to protect the consumer?

“I would say they do an awful lot more than was ever done before,” Woods replies. “And, in general, we do an awful lot more than ordinarily would have been adhered to in other countries—the US, wherever.”

The concern with GDPR regulations is that, if a business does not fully understand them and comprehensively apply the necessary changes, they run the risk of being in direct violation of these still relatively new laws.

Woods says: “It was put together in a clever way that protects data round the European citizen, as opposed to an application on European companies. It forces companies to protect other European citizens, so it’s more secure.”

Overseen by the Information Commissioner’s Office (ICO), every company has a responsibility to report any breaches in their systems where data has been compromised within 72 hours.

Forcing this responsibility onto the company, rather than an external body investigating individual cases means that “the obligation is put on the processor, handler, or controller of the data,” Brendan Woods explains.

“I think it does an awful lot,” says Woods. “I think part of it is because of the significant finds and recourse that can happen with people that basically aren’t making the effort to protect peoples’ data are very significant.”

He adds: “There has been such a focus on people preparing for it.”

An argument against the efficiency of GDPR regulations is that businesses have not fully implemented the changes. However, as is the case with MTD, businesses and practices were allowed two years before the law came into effect. So why do businesses struggle to update their policies, even when given enough time to do so?

Ticking all the boxes

“Obviously, [AutoEntry is] a software company. All our data is generally all within the software systems anyway, which is great. That means that we can focus on the actual data integrations systems we have—making sure that we have an access policy.

“A lot of it is just retaining the infrastructure, testing it, and making sure that we’re always ticking all the boxes. We make sure that we are providing the best practices for protecting data.”

AutoEntry specifically goes beyond the basic requirements, Woods is keen to inform us.

He says: “Because we’re so paranoid about it, we’ve heavily invested into going towards the accreditations of ISO 27001, ISO 27017, and ISO 27018. So, these are essentially the ‘top of their game’, best practice MAS accreditations.”

These standardisations introduced by the International Organisation of Standardisation (ISO) ascertain that companies achieve the same level of security.

“The ISO 27000 would probably be the primary one which measures the security of administration,” Woods tells Accountancy Age. “That is now something that we have passed the first phase of.”

The CEO adds: “The fact that we have gone through without even one mention of non-compliance or identification of something we needed to do different—we’re very happy with that.”

AI in accountancy

AI is an umbrella term full of ambiguity. Within it, there are numerous different terms and nuances that could influence the financial sector in the near future.

“I mean, AI itself is as good as it’s been implemented,” Woods says. “As a technology, it’s really about how it’s being used. A question I’m asked all the time is: how will AI implementation in proven software systems impact accountants over time?”

Brendan Woods’ answer to that question is: “I would say that AI is going to improve what software can do. It will improve in terms of how much of a process it can help deliver but, ultimately, it is always going to be delivering solutions that support. I don’t see accountants being mitigated out of the process, because people want to work with people.

“The accountant will also be able to use AI system statistics to surface insights about their client’s business. This system can tell the accountants, for example, if a client is going to run into cashflow problems due to ordering lots of materials and not being paid for another 90 days, and so on.”

AI replacing people when conducting the more menial tasks does not mean that “these things can’t be done by people,” Woods points out. It just means “the reality is that the time would not typically be available for humans to produce all of this information all of the time. With AI-driven systems, this can run in the background the whole time. It can present opportunities; accountants can take these opportunities and present them to clients and explain the various benefits that could come off the back of it.”

“I would say, if you want simple steps to improve, the first thing is to talk to the people with the expertise.”

Accountancy Age asked Woods how he would go about advising accountants who have been more hesitant when implementing technological changes in their practice.

“There’s a very simple solution, and that is the fact that there are any number of software vendors out there—including AutoEntry,” Woods replies. “We all have systems that greatly improve efficiency, but accountants just need to speak with them.

“I would say, if you want simple steps to improve, the first thing is to talk to the people with the expertise.”

He concludes: “Take time  to talk to various solutions advisers out there who are well-recognised and well-reviewed by other practices, and then see what they’re all about.”

Accountants in practice versus technological advancements

Accountants consider themselves a ‘people business’, so it is no surprise that  automation in industry may be met with some scepticism. Nonetheless, effective software can aid in the engagement of a workforce, both internally and with their clients.

He says: “Often, what AutoEntry is finding is that people have more than halved the amount of time on tasks they had to do before they could get to the meaningful parts of their job. Now that first half of just monotonously typing up data is gone—you automate that. They can now work on the interesting things.

“Solutions like AutoEntry are engaging the workforce, by allowing employees to enjoy their job more. Practices are letting software remove routine processes that don’t leverage the skills they spent so long training to develop.”

The biggest pitfalls accountants are falling into when preparing for MTD

“I think the biggest pitfall is that they don’t prepare,” Woods reveals.

He continues: “We’re speaking to lots of clients – as I’m sure you can imagine – and these practices also have large numbers of clients. They may not have segmented the portions of their client base that will be affected by the first stages of the categories of MTD. So what changes are those clients going to have to make?

“I’m sure all of their clients are going to be ringing them in April, saying: ‘Do I have to do anything for this?’ Or maybe even later than April. They’ll say: ‘Why didn’t you tell me? What was I supposed to do? Well, I don’t know, you’re my accountant!’

“So, I do feel sympathy for accountants, because I feel like a lot of the pressure and responsibility will be put on them by the client: ‘Why didn’t you prepare me?’ If the client isn’t prepared, then it is left to the practice to pick up the pieces.

“Accountants have been put in a position where they will need to help and advise their clients to help them prepare. The pitfall of this is that unprepared accountants are having to bear that burden.”

Who is currently running the risk of being the most effected by MTD?

“Those who are going to have the biggest problem with this are the people who didn’t prepare for [MTD],” Woods says.

“The solutions are out there, but practices need to look into it now, for there’s very little time left, and some of these practices will have a lot of clients to deal with. They need to then communicate with their clients about their situation—the impacts, and the solutions for them going forward.

“If you can do it now – in January or February – and have it implemented by March, you’re going to be OK. But, if you leave it much longer to start planning, it’s going to go horribly wrong.”

What technological advances does Brendan Woods foresee as being implemented in industry over the next few years?

Woods immediately qualifies this and replies: “It’s going to be a question of what else can we leverage with digitisation?”

He goes on to say: “So, if you think about it, MTD could probably never be easily solved as something that could be enforced, if it wasn’t a solution that the government and everyone knew how to help alleviate problems in practices and businesses.

“If there was no automation data entry, no interface bookkeeping solutions, they couldn’t have prepared for it.

“Technology advances alongside the need for it. People will ask what clever things they can invest with technology next that could add value for users. And, as we create those software solutions, then the government will say: ‘Oh. This makes it easier for people to do xyz, therefore, we can probably look at how we can further streamline how people interact with HMRC.’”

More specifically to the accounting industry; however, Woods believes that there will be more streamlined open banking.

“You can see that some of the banks are already preparing for it,” he says.

How will this impact accountancy? Woods goes on to explain: “Practices are going to start implementing open banking within their accounting software. They won’t have to go to a separate website for their daily banking—it will be able to be done within their accounting software.”

“That will have huge ramifications,” the CEO concludes. “It will massively improve the workflow of cash payable and pay flow for a business, but it will also have big ramifications for banks, too.”

From AutoEntry’s perspective, Woods states that the open banking industry will not affect them in the short-term, “but it can do later.”

“AutoEntry automates the cash and bills people receive, and so on,” Woods says. “Now, we’ve even gone a step further. We’re doing a lot more to downstream steps for accounting resourcing. We’re now able to capture an accountant’s monthly statements. So, not just the bills, but monthly things. We can reconcile them altogether; we can tell if there are bills missing, and so forth.”

Brendan Woods concludes: “In theory, with open banking down the road, there could most definitely be a payment mechanism built in for those bills.”

It will be interesting to see how this would impact the accounting industry in the coming years.