References to specific software and solutions in this article are for illustrative purposes only. They do not constitute endorsement or recommendation by the Institute, nor are they intended to represent all options available in the market. Readers are advised to conduct their own assessment to determine suitability.
Across Hong Kong’s small- and medium-sized accounting practices (SMPs), something is changing. Tasks that once consumed hours of professional time each week – sorting receipts, keying in transactions, reconciling figures across incompatible spreadsheets – are increasingly being handed to software that can do them faster and, in many cases, more accurately.
The shift is being driven by a confluence of forces: acute talent shortages, rising client expectations, and a rapid expansion in accessible technology. Together, they are giving practitioners a compelling reason and a practical pathway to free up their teams for the higher-value advisory work that clients need most.
But where should a firm begin, what tools actually deliver, and how do you bring your people along for the ride?
The friction problem
Eugenio Ferrante, Chief Executive Officer of Osome – a cloud-based platform for automated accounting and company administration, and part of Cyberport’s innovation and technology community – sees the challenge. “Right now, in Hong Kong’s vibrant ecosystem, the biggest point of friction isn’t a lack of ambition, it’s a surplus of admin,” he says.
For small and medium enterprises (SMEs) scaling across borders, the pain point shows up as fragmented multi-currency ledgers and tangled tax compliance. For SMPs, it manifests as what Ferrante calls “the margin crush of manual labour,” compounded by a talent market where qualified staff are increasingly difficult to recruit and retain.
Firms find themselves hiring not to expand their advisory capacity but simply to keep pace with the volume of repetitive processing work their client books demand. “SMPs are facing a severe talent shortage,” Ferrante observes. He notes that professionals do not go through the rigour of the CPA exams just to spend their days on data entry – they train to advise, to analyse, and to add value. “Our philosophy is that artificial intelligance (AI) shouldn’t replace the accountant; it should give them a superpower, freeing them to do exactly that.”
It is a sentiment echoed on the technology side of the equation by Leon Fan, Chief Financial Officer of Laiye, a specialist in intelligent automation and robotic process automation (RPA) that is also part of Cyberport, whose tools are designed for precisely the kind of high-volume, repetitive workflows that consume so much capacity in accounting firms.
Fan, who began developing what he calls “financial robots” during his time at a Big Four firm a decade ago, notes that the underlying technology is well proven. What has changed is its accessibility. RPA, once the preserve of large multinationals with dedicated IT budgets, is now within reach of the practices and businesses that arguably need it most.
From empty software to executed work
The first stage of the digital transformation journey for many firms involves moving from manual documentation to cloud-enabled automation – replacing paper-based processes and desktop software with platforms that not only store data in the cloud but actively process it.
Osome, which serves more than 40,000 customers globally across Hong Kong, Singapore, and the United Kingdom, illustrates what this looks like in practice. When a client uploads a document or connects a bank feed, the platform’s AI ingests unstructured data, cross-references it, and categorizes transactions, typically within 24 hours. If supporting documents are missing, the system automatically prompts the client.
Ferrante draws a distinction between this approach and what he describes as the “empty car” problem inherent in legacy accounting software. “Traditional software gives an accounting firm a nice digital dashboard, but the firm still has to supply the human ‘driver’ to manually key in the data,” he explains.
“At Osome, when a customer uploads a document, our AI ingests the unstructured data, cross-references it, and categorizes the transaction instantly. Their staff no longer log in to start typing out individual transactions. They log in to find that the baseline bookkeeping is already done,” Ferrante notes. “We abstract away the manual data entry so the firm can focus entirely on client strategy.”
The practical impact, Ferrante says, is that partner firms reclaim an average of around 40 hours of administrative time per month – effectively an entire working week. “They stop looking in the rearview mirror at last month’s receipts and start looking out the windshield at the client’s future.”
Going deeper with intelligent automation
If cloud-enabled platforms represent the first wave, the next evolution involves deeper process automation through RPA and AI – technology that can execute multi-step financial workflows end to end, with human oversight at critical checkpoints rather than at every stage.
Laiye’s financial robots, for instance, can automate invoice processing, accounts receivable and payable reconciliation, tax filing preparation, and fixed asset management. Fan explains that the system operates on strict, predefined workflows with multiple layers of cross-checking built in.
“At every step, the system can run a checking procedure to ensure each action is accurate and the result is controlled,” Fan says. When the system encounters an anomaly such as a stamp obscuring a digit on an invoice, an image captured in poor lighting, or a figure it cannot read with sufficient confidence, it flags the item and routes it to a human operator for review.
This “human-in-the-loop” model is central to how Fan thinks about automation in the accounting context. He is candid that no system achieves 100 percent accuracy, but argues that the combination of procedural control, cross-checking, and human-machine cooperation maintains quality at a consistently high level.
“Through process control, crosschecking, and the interaction between humans and machines, you ensure quality and accuracy remain very high.”
“Through process control, cross-checking, and the interaction between humans and machines, you ensure quality and accuracy remain very high,” he says. Over time, as a firm gains confidence in a particular workflow, typically after two or three months of supervised operation, the process owner may choose to let the system run autonomously, stepping in only when outliers arise.
Fan sees this model reshaping the role of accounting professionals in a fundamental way. Rather than spending the bulk of their time on manual processing, practitioners will increasingly function as supervisors and managers of their digital assistants.
“The workload might shift from 100 percent manual processing to perhaps 80 percent handled by RPA and AI, with the remaining 20 percent devoted to managing those digital tools and focusing on human interaction – the client relationships and business collaboration that machines simply cannot replace,” he says.
The view from inside the firms
For Hong Kong’s SMPs, the promise of technology is compelling. But the reality of implementation involves navigating challenges that no vendor brochure fully captures. Jonathan Wan, Partner of Financial Services at Forvis Mazars Consulting (HK), describes digital transformation as “an ongoing journey rather than a one-off programme.”
The firm has established foundational platforms and shifted its focus toward scaling adoption, embedding digital tools into daily workflows, and extracting more value from data across audit, advisory, and compliance engagements. But Wan is frank about where the difficulty lies.
“One of the most significant challenges has been change management,” he says. “Technology adoption is not purely a technical exercise; it requires shifts in mindset, behaviours, and ways of working. Professionals may initially view new tools as adding complexity rather than reducing it.”
Forvis Mazars addressed this by investing in training, appointing internal champions, and communicating clear use cases that demonstrate how tools make work more effective, not merely different. “People and process changes must move in tandem with technology for transformation to be sustainable,” Wan says.
At BDO, Managing Director Andrew Lam, and an Institute member, points to the firm’s adoption of proprietary audit software used by BDO firms worldwide, developed over the years to incorporate AI and analytics capabilities that enhance both audit quality and efficiency. The platform also enables seamless service for multinational clients across jurisdictions.
Beyond audit, BDO Hong Kong has deployed client management systems, and automation in supporting functions such as human resources and administration – some of it self-developed to suit the firm’s specific requirements. But Lam emphasizes that capability must be matched by discipline.
“While IT tools could enhance efficiency, system and information security is paramount to ensure integrity and security of both clients’ and the firm’s data,” he says. “Staff have very strict guidelines as to the proper use of IT tools for serving clients and in internal functions.”
“This constant flux makes it difficult to know when to commit, when to wait, and how to avoid investing in tools with a short shelf life.”
When Conpak CPA began building its own optical character recognition system in-house, most SMPs were still filing paper returns. Hazel Yim, Director at Conpak and an Institute member, notes that the firm began its digital journey more than a decade ago and achieved a fully paperless environment 10 years ago.
Today, its IT team represents nearly 11 percent of total headcount – an exceptional ratio for an SMP. Cross-industry benchmarks put IT staffing at around one technologist for every 18 to 27 employees.
Yet even at this advanced stage, Yim identifies a persistent tension. “The biggest challenge is balancing optimization with future readiness, ensuring our optimized processes remain flexible enough to support new technologies,” she says.
“A solution that was cutting-edge six months ago can quickly become outdated, superseded by another technology that does the same job better and faster. This constant flux makes it difficult to know when to commit, when to wait, and how to avoid investing in tools with a short shelf life,” Yim explains.
Conpak’s response has been to embed continuous improvement into its operating rhythm. The firm’s managing director chairs an IT meeting every Friday morning with the IT team and all functional team heads, reviewing emerging technologies, resolving pain points, and refining systems in real time.
The firm has also implemented a “no-blame” pilot period, during which staff can test new tools without fear of making errors. “By embedding continuous improvement into everyday workflows rather than treating it as a one-time transformation, we stay future-ready without chasing every trend,” Yim says.
Lowering the entry threshold
For firms weighing the cost of digital adoption, government funding schemes have offered a meaningful way to defray the initial outlay. With SMEs accounting for over 98 percent of Hong Kong’s businesses, the government has built up a substantial portfolio of technology support programmes over the past decade.
The Digital Transformation Support Pilot Programme (DTSPP), for instance, helps SMEs in selected sectors adopt digital solutions, with plans to expand with an additional HK$300 million incorporating AI and cybersecurity. Combined with injections into the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund), the 2024 Policy Address and the 2025-26 Budget have allocated a total of HK$2.5 billion to SME support schemes.
Jason Yau, Partner and Head of Technology at RSM in Hong Kong, and a member of the Institute’s Practice Management and Digitalization Support Group, describes such schemes as vital to lowering the barriers that hold many firms back. “Cost remains the biggest barrier for many firms, and these funding schemes lower technology’s entry threshold, allowing SMPs to experiment with new tools without bearing the full investment cost upfront,” he says.
Wan at Forvis Mazars agrees, noting that government funding can provide useful support, “particularly for well-defined digital initiatives such as system upgrades, cybersecurity enhancements, or productivity tools.” From a broader industry perspective, he adds, “these schemes are most effective when firms have clear transformation objectives and realistic implementation plans.”
While programmes such as the DTSPP and BUD Fund are not accountancy-specific, they signal the government’s continued commitment to subsidizing digital adoption – and professional services firms should watch for schemes that may be tailored to their sector in the future.
Yau, however, stresses that funding alone is not enough. He sees government programmes as catalysts rather than complete solutions. “Government support provides a springboard, but firms must carry the transformation forward with their own vision and commitment,” he says. “Long-term success depends on sustained investment and cultural change within firms.”
Starting the journey
For firms that have yet to take the first step, the advice from those further along the path is to start small, start with a real pain point, and do not try to do everything at once.
“Digital transformation does not require a ‘big bang’ approach,” says Wan. “Start with specific pain points – manual processes, data silos, or client communication inefficiencies – and adopt technology that addresses those areas directly.”
Wan adds that SMPs should remain pragmatic, focusing on solutions that are “scalable, secure, and aligned with regulatory expectations” rather than pursuing technology for its own sake. “Digital transformation is increasingly becoming a baseline capability rather than a differentiator, and starting early – at a pace that suits the firm – will pay dividends in resilience, talent retention, and client service,” he adds.
“Test it, see whether it delivers a meaningful return on investment, and then expand from there.”
Fan at Laiye offers similar advice. “Choose the scenario where you face the greatest pain, and where you can achieve the biggest improvement with the least cost and fastest speed,” he says. “Test it, see whether it delivers a meaningful return on investment, and then expand from there. That is the pattern we see across almost every firm adopting new technology successfully.”
Ferrante at Osome puts it more bluntly. “Stop buying empty software. Do not just digitize a bad, manual process. Putting a faster treadmill on a bad workflow doesn’t mean you’re going anywhere,” he says. “Get that quick win. Delight your internal team by showing them a better way to work. Once you build that momentum and culture of innovation, the rest follows naturally.”
What distinguishes Hong Kong’s digital adoption story, Ferrante observes, is that it is being propelled by competitive necessity as much as by policy support. Government schemes have lowered the cost of entry, but the deeper motivation is commercial. “Hong Kong is such a hyper-competitive, globalized hub that SMPs are realizing digital transformation is a commercial imperative to attract the best talent and the best clients,” he says. “They are choosing to adapt, not because they have to, but because they want to win.”
Fan frames the stakes even more sharply. Cloud-based accounting services powered by AI are already beginning to handle work that SME clients once outsourced to small practices. Firms that do not adopt similar efficiencies risk finding their value proposition eroded – not by a competitor down the street, but by a platform on a screen.
The counter-strategy, Fan argues, is for practitioners to harness the same technologies to lower their own costs, improve service quality, and double down on the human dimension of client relationships that no algorithm can replicate. “When you can provide better service than others under the same fee conditions, people have no reason to leave you for a cold, unfeeling machine,” he says.
The accounting firms that thrive over the coming decade, in other words, will be those that use technology not to replace judgement but to make room for it. “The future of automation isn’t about removing humans; it’s about giving them the insights they need to be heroes for their clients,” says Ferrante.
The Institute, with support from its Digital Transformation Task Force, has launched the Digital Transformation Roadmap and Digital Transformation Hub to help Hong Kong SMPs and SMEs thrive in a digitized business landscape. Visit the dedicated webpage to learn more about this initiative.
