People talking at table
Sam O'Connor
Posted 2 years ago

Building the next generation of tools for accountants

After I qualified in 2011, accounting automation became a concept that I heard more and more about. Since then, I’ve seen and met many predict an end to the profession as we know it. Many view this technological shift as inevitable: accounting must be ripe for automation because it’s just a case of adding some stuff up, right?

There is no doubt that change is already being ushered in by new developments, or that there is more to come. New technology should, I believe, be good for customers and accountancy together, with advances being beneficial to all industry stakeholders.

That being said, I’ve realised that there is no way accounting will be automated in the way that some outsiders anticipate it will be.

The human touch

One segment of the working population that has been consistently underserved by these advances in accounting tech is self-employed people and small business owners. For them, accountants provide something that computers are a long way off from replicating: peace of mind.

By combining their professional knowledge with empathy and understanding, accountants can provide customers with a level of reassurance which technology cannot yet emulate. An accountant can also leverage their experience to help clients navigate issues that current software tools simply can’t conceive of – “artificial” intelligence indeed.

That’s why accountants are the go-to business adviser.

It’s just not adding up

When we were starting Coconut we asked ourselves: if it’s the business support and guidance that clients crave, how can we do more of it?

What we found is that there’s lots of manual preparation and cleaning up work to do. And this is under attack from the outside because clients don’t see the value. It boils down to:

  • Gathering customer data, cleansing and preparing it.
  • Communicating with the client to understand the context of transactions.
  • Making lots of different tools and systems talk to each other.

Automation starts with metadata

We looked for ways of solving this problem and decided to start with the data. We identified that transaction metadata holds the key to automation. Metadata is information that describes the transaction in more detail. As traditional banks don’t pass metadata onto the customer, it’s hard to understand the tax context of a transaction automatically.

So the starting point for Coconut was to create a business current account, giving us transaction data from the source, including the rich metadata.

Changing how customers experience bookkeeping

We also realised that a lot of work is created by putting off the bookkeeping until it absolutely has to be done. We wanted to find a way of interacting with the customer when a transaction happens.

This is really hard to do with traditional banking data, but by building on a smart current account we see the data in real-time, making the process much easier.

The instant interaction changes bookkeeping from something retrospective into something instant because we can:

  • Remind the customer to take a photo of the receipt when it’s in their hand.
  • Use the metadata to make a judgement about what tax category the transaction relates to.
  • Prompt the customer to check, giving them relevant guidance increasing the chances that it’s right.
  • Make sure everything is ready to go, along with notes, for when any review or filing needs to be done.

To make this happen, we have built a proprietary process to understand the tax context of a transaction. We’re finessing this all the time to improve accuracy. And it means within a few seconds the bookkeeping for a transaction is done and stored in a neat system ready to go.

But if the bookkeeping is done, what next?

Our aim is to free accountants up to provide more services their clients value. With very little effort required, both parties can concentrate on the hard stuff, eliminating the mundane and repetitive. The objective is that accountants can provide more of the valuable services or expand their client portfolio.

Listening to the accounting community

We’ve engaged closely with customers from the beginning and it’s meant we’ve created a product that they love. In the same way, partnering with the accounting community on our accountant tools is really important in getting our product right.

Elaine Clark, the founder of, is one of our key advisors. Elaine is supporting with development of tools for independent accountants and networks like hers. We’re also very excited to be working with Tony and the ICPA.

What Coconut does today

The Coconut product today is a current account for sole traders and limited companies that they can open in just a few minutes from their phone, available on iOS and Android.

Coconut gives self-employed business owners guidance about the tax rules, categorises their income and expenses, and gives (sole traders) a forecast of their tax bill. It also has a receipt capture, and an invoicing tool, which will match off invoices automatically to the payments into the account.

How we want to work with accountants

Alongside our customer accounts, we’ve built the Coconut Accountant Portal. This gives accountants a window into the transactions their clients are making on their Coconut accounts, in real-time. You can see transactions, receipts and notes in a really accessible format. You can also download them easily, and soon you’ll be able to edit them as needed. We also want accountants to be able to communicate with the client through the portal to make the bookkeeping process much more efficient.

Get involved?

Our aim is to develop the next generation of tools that really help accountants service their self-employed clients easier, and more profitably. If you’d like to get involved, have a chat or just want more information, please get in touch by going to

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