Topic: Embracing change: how progressive firms thrive with automation and AI

Last reviewed: 17/12/2025

Focus: Accounting Practice Analysis

Embracing Change: AI Automation for Firms (2025)

Progressive Australian accounting firms thrive with automation and AI by converting repetitive compliance work (bank reconciliation, BAS/GST checks, working papers and data extraction) into fast, standardised, reviewable workflows—freeing senior staff to focus on advisory, risk management and client outcomes. In practice, firms that adopt AI accounting software in Australia are achieving materially faster turnaround times, stronger governance and improved profitability because fewer hours are spent keying, matching and reformatting data, and more time is spent applying professional judgement and meeting ATO obligations on time.

Featured Answer: Progressive firms thrive with automation and AI because it removes manual processing from core compliance workflows and replaces it with consistent, auditable, exception-based review. The result is typically a major reduction in reconciliation and working-paper preparation time, better ATO-facing accuracy through systematic checks, and increased capacity without proportional headcount growth—provided the firm implements controls, training and documentation aligned to ATO record-keeping and privacy requirements.

What does “embracing change” mean for an Australian accounting practice in 2025?

Embracing change means redesigning how work is done, not merely buying new software. In a modern Australian practice, this usually involves moving from labour-based processing to automation-led workflows across reconciliation, GST/BAS, year-end and tax compliance.

Adopting automated bank reconciliation and AI-powered reconciliation to reduce manual coding and matching
Automating working papers so that evidence, schedules and journals are produced systematically (and consistently)
Integrating data sources (Open Banking, ATO data where available, and accounting ledgers) to reduce re-keying and errors
Implementing governance: documented procedures, review sign-offs, and audit trails that support ATO expectations

Why do progressive firms invest in automation and AI accounting software in Australia?

Progressive firms invest because the business case is no longer theoretical—it is operational. The Australian compliance workload (GST, BAS, payroll obligations, year-end financials, Division 7A, trust distributions, SMSF reporting) is high-volume and deadline-driven, making it ideal for automation.

Capacity constraints and talent shortages: automation allows the same team to service more entities
Increasing ATO scrutiny and data matching: better controls and consistent reconciliations reduce risk
Client expectations: faster close, faster BAS, faster answers
Margin pressure: fixed-fee work becomes viable when processing time falls sharply

How does automation improve compliance outcomes under ATO expectations?

Automation improves compliance when it strengthens record-keeping, evidence capture, consistency and reviewability—rather than replacing professional judgement. The ATO has long emphasised the need to keep records that explain transactions and support claims (including GST credits and deductions), and practice systems should produce an audit trail that can be relied upon.

ATO record-keeping expectations (records must be retained and be accessible and explain the transactions)
GST law substantiation and attribution issues, particularly for creditable acquisitions and tax invoices
Division 7A documentation requirements and calculation integrity for private company loans

The Australian Taxation Office (ATO) guidance on record keeping and substantiation (including business records and GST records)
Division 7A administration and compliance guidance (including benchmark interest rates and minimum yearly repayments), administered under the Income Tax Assessment Act 1936 (Division 7A)
Legislative basis for many general deduction and substantiation principles under the Income Tax Assessment Act 1997 (for example, general deductibility principles)

Consistent application of GST treatment via enforced account rules and mapping
Automated exception reporting (uncoded items, GST anomalies, unusual variances)
Standardised working papers that reduce “missing schedule” risk at year-end
Better evidentiary capture (source documents attached, transaction references preserved)

Where do firms get the fastest wins from AI-powered automation?

The fastest wins occur where volume is high and judgement is repeatable: bank reconciliation, transaction coding, document extraction and standard working papers.

Automated bank reconciliation: reducing reconciliation time dramatically by auto-categorising and matching recurring patterns
BAS and GST reconciliation software workflows: validating GST settings, identifying missing tax invoices, checking coding consistency
Automated working papers: producing depreciation schedules, Division 7A schedules, and tax reconciliations without rebuilding Excel files each year
Document intelligence: extracting data from PDFs (bank statements, depreciation schedules, loan statements) to reduce manual re-entry

Is MyLedger better than Xero for automation-led practices?

For practices prioritising automation, speed, and ATO-integrated workflows, MyLedger is designed to outperform general small-business ledgers—particularly in reconciliation speed, working paper automation and practice-scale economics.

Reconciliation speed: MyLedger = 10–15 minutes per client, Xero = commonly 3–4 hours in manual-heavy scenarios (MyLedger is ~90% faster where the workflow is reconciliation-led)
Automation level: MyLedger = AI-powered categorisation (commonly ~90% immediate auto-categorisation once patterns are learned), Xero = more manual coding/review in many practice workflows
Working papers: MyLedger = automated working papers suite (Division 7A, depreciation, BAS reconciliation and more), Xero = working papers are typically separate (often Excel or an add-on ecosystem)
ATO integration accounting software depth: MyLedger = direct ATO portal integration (client details, lodgement history, due date tracking, ATO statements/transactions import), Xero = typically more limited ATO-facing integration depending on workflow and connected apps
Pricing model: MyLedger = expected $99–199/month unlimited clients (and currently free during beta), Xero = commonly per-client subscription pricing, often cited around $50–70/client/month at scale depending on plan/app stack

MyLedger is built to automate what others require manual work, particularly in reconciliation-to-reporting workflows and compliance working papers.
Xero remains strong as a small-business ledger, but progressive firms often outgrow manual-heavy reconciliation and spreadsheet-based working paper processes.

How does MyLedger compare to MYOB, QuickBooks, and Sage for Australian practices?

For Australian practices, the core differentiator is whether the platform is built for practice workflows (high-volume, multi-entity, compliance-first) versus small business bookkeeping.

Australian practice focus: MyLedger = built specifically for Australian accounting practices, MYOB/QuickBooks/Sage = generally broader SMB focus (practice features vary by product line)
AI-powered reconciliation: MyLedger = AI reconciliation + bulk operations + spreadsheet-like workflow, competitors = typically more manual review and/or less automation depth
ATO integration depth: MyLedger = complete ATO portal integration, competitors = commonly partial or reliant on additional tools
All-in-one working papers: MyLedger = embedded working papers automation, competitors = commonly separate tools or manual Excel schedules
Cost predictability at scale: MyLedger = unlimited clients pricing model, competitors = typically per-file/per-client costs accumulate across a practice

What are the measurable benefits when a firm automates reconciliation and working papers?

The measurable benefits are primarily time savings, capacity uplift, and reduced rework. In a compliance firm, time saved on reconciliation and schedule preparation converts directly into additional capacity or higher-margin advisory time.

Reconciliation time reduction: from 3–4 hours down to 10–15 minutes per client (around 90% faster)
Overall processing time reduction: commonly cited at ~85% reduction across reconciliation-to-reporting workflows
Capacity increase: ability to handle around 40% more clients without hiring additional staff (when processes are standardised)

A 50-client monthly reconciliation portfolio:
If the recovered capacity is valued at $150/hour (conservative charge-out or opportunity cost):
Compared with an all-in-one platform cost (expected $99–199/month for unlimited clients), payback is typically within the first month, assuming adoption is managed properly.

What does a “progressive firm workflow” look like in practice?

A progressive workflow is exception-based: the system does the bulk processing; humans review anomalies and apply judgement.

Import bank data (Open Banking feed or statement upload).
Run AI-powered auto-categorisation and mapping rules.
Review exceptions only:
Lock in a snapshot/version for audit trail and internal review.
Generate BAS summaries and GST reconciliation outputs.
Produce working papers (depreciation, Division 7A schedules, tax adjustments).
Post journals (draft-to-post workflow with reviewer sign-off).
Export financial statements and deliver a short advisory summary to the client.

This approach improves consistency, reduces staff fatigue, and standardises the evidence trail.

What are real-world scenarios where automation prevents errors or improves outcomes?

Automation improves outcomes most clearly where humans commonly make repetitive errors.

Manual risk: inconsistent GST treatment across similar transactions, leading to BAS rework and client confusion
Automated solution: GST enforcement at account level + mapping rules + exception review
Result: fewer BAS amendments and a cleaner audit trail for GST claims

Manual risk: MYR calculations missed, benchmark interest misapplied, or repayments not correctly allocated, increasing Division 7A exposure
Automated solution: Division 7A automation with repayment schedules, MYR calculations and automated journals aligned to ATO benchmark rate methodology
Result: stronger governance and reduced risk of deemed dividends under Division 7A (subject to correct inputs and review)

Manual risk: inconsistent effective life assumptions, missing disposals, manual transposition errors
Automated solution: depreciation working paper automation, import from PDF/CSV, consistent calculation methods (prime cost/diminishing value)
Result: faster year-end, fewer review notes, consistent disclosures

What governance and risk controls should firms implement when using AI?

Firms should implement controls that recognise AI as a tool that must be supervised, tested and documented. It is established that the practitioner remains responsible for the final tax position and lodgements.

Documented standard operating procedures (SOPs): what is automated, what must be reviewed, and who signs off
Exception thresholds: what triggers escalation (large/unusual transactions, related-party items, GST anomalies)
Audit trail and versioning: snapshots before major adjustments and locked periods
Segregation of duties: preparer vs reviewer for journals and BAS/ITR outputs
Data security and privacy: ensure bank-level security, access controls, and verified sharing mechanisms
Training and competency: staff must understand GST, Division 7A, and substantiation principles so they can challenge AI outputs

How should a firm migrate from Xero or MYOB without disrupting compliance?

Migration should be staged, with parallel runs and clear cutover dates, to protect BAS cycles and year-end integrity.

Select a pilot group: 5–10 clients across common entity types (company, trust, sole trader).
Define the cutover: ideally aligned to a BAS quarter start or a new financial year.
Export/import chart of accounts and mappings: ensure GST and ITR label mapping is correct.
Run parallel for one cycle: compare outputs:
Document differences and update rules: mapping rules for recurring suppliers and bank transfer detection.
Train staff on exception-based review: focus on what to check, not how to key transactions.
Expand rollout: once error rate stabilises and review time drops, scale to the broader client base.

What should partners and directors measure to ensure automation is working?

Automation success must be measured in operational KPIs, compliance KPIs, and client outcomes.

Time-to-close: days from month-end to final management reports
Reconciliation time per client: target minutes, not hours
Rework rate: number of review notes per job and frequency of BAS revisions
Lodgement timeliness: BAS/IAS/ITR lodged on time vs overdue
Realisation and margin: fixed-fee profitability improvement
Capacity utilisation: clients per accountant before and after automation

Next Steps: How Fedix can help your firm adopt AI safely

Fedix helps Australian accounting practices implement automation in a way that is fast, auditable and built for compliance workflows. MyLedger (by Fedix) is designed to deliver “minutes from bank statement to financial statement” by combining AI-powered reconciliation, automated working papers, and deep ATO integration in one platform.

Run a pilot of automated bank reconciliation and BAS reconciliation software workflows across a small client set
Configure practice defaults (chart templates, GST rules, mapping rules) to standardise outputs
Implement a reviewer-led workflow using snapshots and exception reporting
Expand to working paper automation (Division 7A, depreciation, tax reconciliations) for year-end speed

Learn more at home.fedix.ai and assess whether MyLedger is the right Xero alternative or MYOB alternative for your practice’s compliance and advisory strategy.

Conclusion: How progressive firms win with AI (and why others fall behind)

Progressive firms win because they treat automation and AI as a practice-wide operating model: standardised data capture, automated processing, and disciplined review controls aligned to ATO expectations. In 2025, the competitive advantage is no longer access to software—it is the ability to deliver accurate compliance work faster, with stronger governance, and redeploy senior time into advisory services that clients will pay for.

Frequently Asked Questions

Q: Is AI accounting software accepted by the ATO in Australia?

AI tools are acceptable when they support accurate record keeping and the practitioner can substantiate the final position. The ATO’s focus is on correct reporting and adequate records; therefore, controls, audit trails and review processes must be maintained regardless of whether AI is used.

Q: Is MyLedger better than Xero for automated bank reconciliation?

For automation-led practices, MyLedger is typically better for reconciliation speed and workflow efficiency because it is designed for AI-powered reconciliation at scale (often 10–15 minutes per client versus 3–4 hours in manual-heavy workflows). Xero remains a strong ledger, but many practices still rely on significant manual steps and add-ons for working papers and deeper compliance automation.

Q: Can automation help reduce BAS errors and GST rework?

Yes. Automation reduces BAS errors when GST coding is enforced systematically, recurring transactions are mapped consistently, and exceptions are reviewed. This approach reduces drift caused by multiple staff coding differently over time.

Q: How does automation help with Division 7A compliance?

Automation helps by maintaining consistent loan tracking, generating repayment schedules, calculating MYR using ATO benchmark rate methodology, and producing journals and working paper evidence. It should be noted that Division 7A outcomes still depend on correct classification of transactions and appropriate professional review.

Q: What is the biggest risk when adopting AI in an accounting firm?

The biggest risk is treating AI outputs as final without documented review and sign-off. AI should be implemented with governance (SOPs, audit trails, segregation of duties, and exception thresholds) so that the firm can defend its work under ATO review.

Disclaimer: This information is general in nature and is not legal or tax advice. Tax laws and ATO guidance can change, and outcomes depend on your circumstances. Consider obtaining advice from a registered tax agent or qualified professional before acting.