Recent changes that reveal the future of accounting
As you know, businesses have recently seen massive shifts in the way they do business. Some of the changes are like a peek into a crystal ball: While the intelligence is enlightening, it also has massive implications that require leaders to act.
Technology is powering finance professionals
Businesses are increasingly adopting the use of artificial intelligence, blockchain technology, and robotic process automation tools to do more.
Source: Gartner via Accounting Today
People in corporate finance have not been — and will not be — replaced by robots. Instead, their most tedious tasks are being replaced. The same way banking associates (tellers) weren’t suddenly jobless when the ATM was adopted, accountants won’t be, either. However, many of their most tedious, mundane duties are being automated away, and that’s something to celebrate.
In fact, experts at Gartner say that, today, a single program can handle up to 30 times the number of tasks a typical human can complete.
Source: Gartner Robotic Process Automation (RPA) Role in Finance Automation
Alarmists would have you believe that this means the future of accounting is less human. Or that a bot can replace 30 humans. The truth is that it can’t. A bot can automate only the repetitive tasks that a human was required to do. Robots don’t threaten the critical thinking that people are (and will always be) hired to do.
Automation frees up people’s time. Accounting professionals, can now apply their creativity to strategic puzzles — not just task administration.
We’re seeing this everywhere today. Take, for example, payroll automation solutions provider Gusto. The company doesn’t advertise to certify accountants as payroll administrators anymore but, instead, “People Advisors”:
Why? Because the portions of payroll administration that can be automated have been. Now, the People Advisors are freed up to do more — and they’re in higher demand because they’re “Wholistic Business Advisors.”
Accounting is being de-siloed and interwoven into operations
Another trend we’re seeing is that CFOs are more and more involved in operational (read: nonfinancial) aspects of running their business. This is one of a few trends accelerated by the ongoing pandemic.
The future of accounting is intertwined with the future of operations — in both planning and execution.
“The CFO is the leader, after all, who most directly contributes to a company’s financial health and organizational resilience day to day,” McKinsey analysts write about the change.
The finance department isn’t just supporting or even influencing operations these days — it’s leading it. McKinsey’s management consultants also report that 44% of the CFOs surveyed say that internal leaders of organizational transformation initiatives (change management) report directly to them, not to the CEO. In fact, the number of overall business functions that report to the CFO has increased by 50% since 2016.
New research from the American Accounting Association (AAA) confirms this. Of companies that do employ a COO, 10% of those COOs are also chief financial officers. The AAA researchers also report that this duality is on the rise.
As a business leader, what you choose to do with this information has ramifications. According to recent research from McKinsey, the adoption of this trend determines which companies prepare for crises, cut costs the fastest, and aggressively switch to offense at the first sign of recovery.
Finance experts are helping optimize all costs in an ongoing capacity. And we expect this trend not only to continue but to increase.
Virtual outsourced accounting teams are replacing in-house and local CPAs
Not long ago, experts at Entrepreneur recommended outsourcing three types of roles:
- • Highly skilled or knowledgeable in one area
- • Highly repetitive
- • Highly specialized
As we’ve seen, the highly repetitive is being automated away, and current events have accelerated that trend. That leaves highly skilled and specialized roles.
Accounting tops the list of business services Inc. experts recommend outsourcing, and business leaders, it seems, are following that advice. According to Deloitte’s 2018 Global Outsourcing Survey, the difference between “currently outsourcing” and “planning to outsource” is the widest in finance. That means more businesses plan to outsource this department more than any others.
Source: Deloitte’s 2018 Global Outsourcing Survey
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