With more data than ever at all of our fingertips, there’s a huge potential for large and small firms alike to take advantage of AI and analytics tools. Yet only 8% of small accounting firms use data analytics for reporting and KPI tracking, and only 25% see data analytics as a longer-term strategy.

That’s a missed opportunity for smaller firms to keep pace with change. Small firms that upskill their employees, hire data analytics experts, and create a solid data foundation will outpace their peers and drive strategic growth.

But if you’re resistant to adopting new tools, you’re not alone. Without a strategic approach, moving too fast with tech adoption can backfire. Below, we’ll walk you through the steps to making data analytics your biggest differentiator.

1. Create a data foundation with easy-to-use tools

In spite of the fact that 73% of accountants report a recent increase in their workload, getting your team on board with new analytics and automation tools can be a struggle. 

There’s often a lot of resistance to adopting new software when accountants think it will be too complex or unhelpful. It’s also easy to get stuck in the same pattern year after year – even when it’s slowly becoming obsolete.

Starting with simple tools like ProCharted can help you create a solid data foundation while helping staff get excited about the idea of adopting new tech. When staff can see the benefits of having client files in one place, it can help create more acceptance of tech adoption. Centralized info will also help you streamline the adoption of data analytics tools down the road.

2. Upskill your employees and hire data analysts

Having accounting staff with the right skills on your team is the next step. If you’re hiring new talent, take heart: many accounting programs are integrating data analytics with more traditional accounting studies. When you’re interviewing, look for new hires with expertise in this area.

If you’re not hiring, upskilling your team is another great approach. You can opt for virtual training, microlearning, or one-on-one learning for budget-friendly ways to boost your team’s data analysis skill set. Seek out courses with certifications like Certified Information Systems Auditor (CISA) and Certified Data Management Professional (CDMP). You can also look into training provided by AICPA or the Institute of Internal Auditors (IIA).

For most smaller firms, The Downtown CPA notes that having just one data analyst on your team is enough; even a signle data analyst can help significantly reduce the workload for the rest of your CPAs. However, larger firms should strive to create a data analytics department with a lead analyst who can direct the team's growth and tech adoption.

3. Experiment with data and automation tools

With the right technology, companies can reduce their margin of error by 75%. How much your tech stack helps will depend on the right tech adoption strategies. It’s crucial to ensure that tech spend makes sense for your firm’s strategic goals, and creates less instead of more work. If you’re just starting out, start with tools to automate a process that your firm does regularly.

You could start with data analysis tools like ACL and IDEA, but you can also experiment with other tools to make data processing simpler such as:

Copilot: The new generative AI tool for Microsoft 365, Copilot has a lot of features for speeding up data analysis and generating new formulas at the same time.

Other AI Tools for Excel: There are also other options for combining Excel with generative AI, web scraping, and SQL to make the most of Excel for data analysis. 

Automation tools: Beyond tools to speed up Excel, you can use automation tools for a performance boost across a variety of business functions.

Data extraction tools: Use data extraction tools to automate data extraction from various sources and prep it for analysis.

If you’re overwhelmed by choice, seek out the opinion of a trusted advisor or your staff to find the tools that would provide the most value. Seeking ongoing staff feedback will help keep the whole team on board as you experiment.

Start small and iterate

One of the best approaches is to start small and iterate as you go. Since many smaller and medium-size firms are still struggling to adapt to new tech, there’s no need to scramble to create an automation-first firm right away.

Instead, start with simple tools like ProCharted and get your team comfortable with new tech adoption. When you have time, move on to the next best tool that can help your firm scale common processes. Once your automation tools start freeing up time, you’ll be surprised at how much your firm can adapt and keep pace with the latest technology.