Will accountants become extinct? (Not if we can help it)
- The rise in technology amongst financial services
- Accounting firms must evolve
- Use of soft skills
- The accounting firm of the future
According to the latest 2020 World Economic Forum Future of Jobs report, the third-fastest job decreasing in demand are accountants, bookkeepers and payroll clerks.
With the imminent increase in the use of artificial intelligence, several professions are at risk of becoming irrelevant in the next few years.
We touched on the need for upskilling and job automation back in May of this year. How now job titles have changed, and our roles have evolved.
Concerning these changes, business owners and practice managers alike are asking how they can support their accountants and intertwine them with these technological advancements.
The rise in accounting technology
The most significant technological development that accountants have seen in the last decade has been the emergence of the cloud.
Thanks to the cloud, we have seen the rise of artificial intelligence, big data analytics, machine learning, robotic process automation, and various other digital accounting technologies that have allowed us to automate our workflows far more.
All surveyed companies, according to the WEF report, 17% see cloud computing as the prime technology to adopt by 2025.
These patterns of technological adoption vary according to industry. Artificial intelligence is finding the broadest adaptation among several sectors, most notably Financial Services.
The future of accounting is not just about technology, but it is being driven by it.
These new technologies are set to drive future growth across finance and accounting, plus increase the demand for new job roles and skill sets.
Such positive effects do come with a caveat though - technological adoption will impact some workers by displacing some tasks performed by humans with machines and automation.
Although this sounds alarming, it should not. When great technology and a dynamic and robust workforce combine, they underpin what it takes to be a successful business in today's world.
Accounting firms must evolve
It is evident that technology is changing accounting in business. You only have to acknowledge the growth in cloud accounting software providers.
Companies like Xero and QuickBooks have now made their software accessible from anywhere on any internet-connected device.
What they do better than accounting platforms of yonder, is they have become more easily understood. So, resistant users can quickly become acquainted and view cloud software as useful rather than feared.
What scares those in their current professions is media stories concerning robots, AI and machine learning are thrown around claiming the prophetic extinction of accountants.
Combined with the WEF report that the third-fastest job decreasing in demand are accountants, bookkeepers and payroll clerks; you can easily understand why.
However, for all the hyperbole about automation and cloud technology, accounting professionals can still offer so much more and remain relevant.
Accountants are trained professionals. Not only do they ensure tasks are done correctly, but they advise clients and reassure them with a peace of mind that they're not making errors that could lead to a large tax bill or fines, or even worse.
No matter how much automation is involved, there will always require a human element to oversee how a business is run and what practices their clients can adopt to do better.
Adding this type of value to accounting client services has become much more appreciated. Billing time for accountants is not only ensuring company compliance is met.
Now, more billing is charged for advisory work that has become far more profitable and easier to grow an accounting practice.
Muck like the solicitors and lawyers, where interpretation is required to clarify legalities, much the same rests with accountants.
Not only knowing about tax laws but becoming experts on newly arrived practices like Making Tax Digital or the several UK government business loans schemes that have cropped up in the wake of the coronavirus pandemic.
Far from being irrelevant, accountants need to shift their emphasis from competing tasks to embracing more soft skills to evolve their job roles.
What are soft skills?
Soft skills are related to how employees work, including interacting with customers, colleagues and how they approach situations and solve them.
Unlike 'hard skills' that require learning and years of study, soft skills are harder to teach in a traditional sense as there is little room to measure what constitutes success.
Employers search for those with soft skills because nearly every job requires some interaction with a colleague and customer and will require thinking more critically and dynamically.
Soft skills then are vital in customer-facing jobs. These employees are in direct contact with clients. They require several skills, including the ability to listen, analyse and engage with clients to offer a better service than their competitors do.
Even the same WEF report notes that soft skills are rising in demand, with the top 5 are:
- critical thinking and analysis
- working with people
And when you think about it, it makes complete sense. Because even by 2025 machines and robots are not able yet to do the following top skills required by humans:
- Analytical thinking and innovation
- Active learning and learning strategies
- Complex problem-solving
- Critical thinking and analysis
- Creativity, originality and initiative
The accounting firm of the future
Although automation is critical for a firm's profitability, it should not be the primary driver.
In June 2020, the fintech startup ScaleFactor that raised $100 Million, and was to provide more automated accounting services had to shut down.
ScaleFactor's mission was to remove the challenges to financial clarity that business owners face. They wished to empower business owners to run their own financial back offices without the use of a regular accounting professional.
ScaleFactor's CEO had a painful admission for those seeking the 'automation-only' route:
"But our growth was not without growing pains and important learnings. The most important of these was that technology alone is not enough to make business owners feel financially confident. Customers want a combination of software and human support within an overall solution. Human support wants to be the hero in the customer relationship."
Accountancy is an evolving discipline then.
Businesses are seeking a better relationship with their accountants. They wish to understand more and prefer to collaborate with them rather than be abandoned by them.
That does not mean that accountants should rest on their laurels, though.
Typically, accountants generated value by ensuring all business finances were accurate and compliant when it came to submitting their accounts.
Now there are new client metrics that matter. The same data can be utilised to determine customer satisfaction, churn rates, lifetime value of a customer, time-tracking tasks and other business-critical KPIs; all measurable in a modern business intelligence dashboard.
These client metrics require the critical thinking and innovative strategies that form part of the modern accountant's soft skills repertoires.
Accounting with transform, not become extinct
Technology alone is not enough alone to make businesses feel financially confident. Customers want a combination of human support and software within a solution.
Still, fundamentally, business owners need a technology champion—someone that understands the technology stack and how to integrate them.
By understanding what data a business captures, accountants are better able to decipher concerns and identify business opportunities.
By combining excellent software skills, business-critical thinking and years of accounting experience will make accountancy an invaluable profession for years to come.
Harnessing technology and automation tools like Uku, whilst keeping the human element at the core of client services will add more value (and thus more profit) to accounting services.
The future of accounting is not about becoming extinct; it is about transformation.
Thank you to Ryan Lazanis at FutureFirm for his assessment and input regarding the future of accounting. You can hear his thoughts (and inspiration behind this article) here.