If I say the words “Creative Accounting” most people within the finance profession immediately think of Enron and it’s most certainly associated with something negative. According to Wikipedia, it’s defined as follows.
“ Creative accounting is a euphemism referring to accounting practices that may follow the letter of the rules of standard accounting practices, but deviate from the spirit of those rules”
So, it’s accountants using loopholes in the rules to gain a financial advantage or even worse than this definition simply fraudulent behaviour. If instead, I say the words “Creative Accountant” do you then also associate that with something negative? My guess is that you do but I say it’s time to think differently about this. Accountants need to get creative to keep adding value to the company they work in. This is part of what they must do to stay alive.
Insights and recommendations need a bit of creativity
Accountants are being asked to do more than merely produce the numbers. They are asked to look at the numbers and derive insights for the business in terms of recommendations on actions for how to improve the business. That typically involves looking at a large dataset, structuring the data, identifying main trends and patterns and then finding a way to communicate this to business leaders. And not only that but certainly also to say…
- …this is what happened…
- …here’s why it happened…
- …and this is what I think you should do about it.
To do this well you must have some creativity as you’re combining numbers with business outcomes where you think through various what-if scenarios and try to predict their outcomes before you make your recommendations. It also requires creativity to communicate what’s in the numbers. Speaking Finance to non-finance people can be quite challenging as you need to speak in pictures and stories rather than tables or even graphs.
“Creative” should no longer be banned in accounting
So, the word creative in relation to accountants need a new meaning as accountants becoming creative is crucial to their survival in the profession. If all you can do is produce numbers, reconciliations and static statements then you’re not adding much value and will most likely be automated, offshored or outsourced. The business want’s more from you as it needs all the help it can get in creating more value. Part of that will come via insights derived from the numbers and the accountant is ideally placed for doing that if (s)he can make the important combination of business and finance.
Now we’ve moved away from the doom and gloom of the accounting profession and started to talk about what accountants can do to improve their career and not only stay alive. Anyone who can help a business create more value and become more valuable will always have a job. After all, that’s what most businesses are for right?