First, I have nothing against accountants and once or twice I have been called one myself. However, in today’s business environment and with the current trends in Finance as described in the article “Introducing The Finance Transformation Nine Box” the need for true accountants has become less and less. The main driver behind this is no doubt technology as companies in their efforts to automate and digitize are aiming at solutions that will enable the customer to do business with them online without any interaction with company staff. The flipside of this is that when all transactions become automated the debit/credit will also be done automatically. Reconciliations will be automated and whenever something doesn’t match (which btw wouldn’t happen often as no human intervention also minimizes the risk of mistakes) a controller can easily review the unmatched transactions and make the needed corrections.
Not only a large company phenomenon
At my previous job as a finance manager in a small company, I had a team of two accountants. We made a clear strategy on how we could optimize all transactional finance tasks that included.
- Better utilization of the system (despite being a very dated accounting system)
- Clearly focusing on the tasks that really mattered while eliminating all waste
- Implementing cloud-based solutions such as Concur for travel expense management and invoice workflows.
The result was quite clear. During my time in the position the company grew 200% and the number of transactions naturally also grew significantly. However, we didn’t hire any additional accountants.
This harmonizes very well with a study done by CFO Research finding that 52% of companies were considering a system upgrade to improve their transactional processes while an almost equal 50% would look to improve their processes.
What the current trend means for accountants
As described in several previous articles the current trend in Finance is to partner with the business to create more value for the company. It is very clear that transactional finance or finance operations are not part of this trend so while optimizing working capital and running lean OtC and PtP processes are certainly still important this is not what is talked about when saying that Finance should create value for the company. The ways Finance will create value are based on bringing analysis to the business and discussing how the business can be improved. I will go much more in-depth on this next week, but there is no doubt that this puts extreme pressure on the traditional accountant. (S)he can try and develop to keep up with the trend by developing better analytical skills and communication skills which are not typically associated with accountants. However, the good old bean counter is certainly a threatened species and there is no one coming to save him/her.
A different kind of education is needed
Traditional education in finance and accounting has focused a lot on the basic skills like debit/credit, variance analysis and how to calculate KPIs. Very little focus, however, has been put on explaining all the information derived from this to people outside of finance. These are the people that run the business on the front line yet many accountants simply don’t know how to talk to them. While even the most distinguished business partner still needs to have a basic understanding of accounting future education in finance and accounting needs to put a lot more emphasis on communication skills, how to make presentations and how to facilitate running a business. Most job ads looking for finance people these days from CFO and down all want these coveted soft skills, however, only a few companies and educations have put in the needed effort to develop these. No matter what happens though, if you are a traditional accountant i.e. a classic bean counter your days are numbered and you need to figure out fast what you will be doing in the future!
What do you think will happen to the accountants in the future? Do they still have a role to play or will they, in fact, be extinct? What can we do to fix accounting education to ensure that a different focus is applied to cater for future needs rather those of an analogue past?