Accounting is the language of business. So said Warren Buffet, billionaire, philanthropist, investor and business tycoon. He acknowledged having taken “a lot of” accounting courses over the years and understanding the language has rewarded him well financially.
In the previous article, The evolution of accounting – before and during COVID-19, Dr Josh Heniro, senior director, Southeast Asia and Australasia, Institute of Management Accountant, shared his views on how accounting has been changing prior to COVID-19.
In this second instalment, he shares his views on the role of technology in the development of the accounting profession, including some recommendations around analysis, strategy an leadership.
As he puts it rightly, accountants must elevate their roles to that of strategic partners. Why? Because it is expected of them. Across the enterprise accounts have the best visibility of how an organisation is doing relative to the direction that management has put forward.
FutureCFO hopes you find Dr Heniro’s insights and recommendations as sound guidance in your career as accountants and beyond.
How have organisations responded in terms of technology and processes or workflow in response to WFH or remote work?
Dr Josh Heniro: In the days before COVID-19, it was not unusual to see articles warning of the coming collapse of society because of technology and robotics.
Now, amid the pandemic, when human contact is giving way to social distancing and remote work, the tone has shifted; robots will not be the cause of our doom and may even be our saviours. Embracing new technology is key.
For example, bots and cloud accounting solutions make it easier than ever for small business owners to manage their accounting and bookkeeping tasks with the efficiency that only their larger counterparts formerly enjoyed.
With these changes, there is a shift in the role accountants play in working with their business clients. This shift will accelerate as more businesses jump to the cloud.
As entire workforces have moved to remote working environments and key finance and accounting activities like the financial close are being done outside of an office, technology is now the means by which organisations are ensuring business continuity.
Technology empowers accountants, and in turn, accountants wield technology as the powerful, meaningful weapon that it really is. It frees up time in the day to work with clients in a more effectively.
Think for a moment about how beneficial it would be to work off a single general ledger from anywhere, at any time and in real-time. This is not science fiction; the technology is here, allowing accountants to deliver more value-added, business advisory services.
Accountants are no longer just bookkeepers; they can now tackle tasks like business planning, controls, succession and more. Better technology creates better accountants, which enables better business owners to make better decisions.
Disruptions of all forms necessitate these skills, though the current COVID-19 pandemic has also particularly accelerated the need for technological competence.
The mass shift to remote work has left workplaces increasingly distributed, and the current economic downturn has not slowed investments in automation and artificial intelligence, among other technologies.
Within the finance function, Big Data and robotic process automation (RPA) have been particularly successful in increasing organisational efficiency and enabling finance professionals to build on their proficiencies around data governance and analysis.
But for the finance function to capitalise on new technologies, and thus keep pace with the changes in the business world, the finance professionals within those departments must continue their education. To align with the ever-shifting needs and innovations of the workplace, the desire and motivation to learn are necessary.
Given the uncertainties of COVID-19, do you anticipate these changes to be permanent? Or do you expect a return to pre-COVID-19 when the pandemic is gone/controlled?
Dr Josh Heniro: Over the course of the current COVID-19 global situation, the business world has been characterised by immense uncertainty and getting very complex and volatile. Entire industries have been subjected to questions regarding their viability to withstand a pandemic, and companies by the thousands and employees by the millions have had to adjust to the new normal of remote work.
We are now many months into this process, and questions still abound as to whether the workplace will ever be the same and what this means for businesses. To help mitigate this uncertainty, organisations require both organisational stewards, who can control costs and value creators who can identify opportunities and execute strategies for growth. Finance professionals, as the steady hands of the organisation, have a responsibility to carry both of these torches, utilising their stewardship and value creation skills to help manage their businesses through disruption.
Given the greater use of technology in accounting, do you anticipate greater calls for skills upgrade/certification to be the norm?
Dr Josh Heniro: Yes, the profession is rapidly changing due to emerging technologies. Today’s accountant is no longer burdened with task-oriented projects. Instead, the shift in dynamic accounting technology, accounting software programs are becoming more automated, and the role of the accountant is changing to that of a business advisor.
Due to the time freed up by technology more efficiently performing routine tasks, the accountant of the future will spend less time on data manipulation and reporting, and more time on creating value through decision support, data analytics, data visualization and story-telling.
Instead of preparing reports, future accountants will interpret them and make recommendations based on the data. They will capitalise on opportunities and mitigate risks.
In this way, accountants will shed the perception of “compliance cop” and become strategic business partners and trusted advisors who use their financial acumen to inform:
- Analysis: Deciphering the story contained in the numbers. Accountants cannot stumble onto patterns and trends; they must always be reading the data, proactively searching for them, being inquisitive, asking the right questions, and discovering answers in the data.
- Strategy: Using data to not only report on an organisation’s finances but to plan the future. Accountants will be called upon to make a greater contribution to long-term plans, drawing on the insights provided by Big Data and AI.
- Leadership: Accountants must be able to properly communicate their findings and agendas to the rest of the organisation and take ownership over initiatives. This will require skills that have never been fundamental to accountants, including the art and science of storytelling.
To become this strategic business partner of the future, accountants will need to make a concerted effort to expand their knowledge beyond the traditional accounting curriculum.
From current students to experienced professionals, accountants must focus on reskilling and upskilling for the future. This will include certification in relevant programs that emphasize analysis, strategy, and leadership in addition to the more traditional financial accounting body of knowledge.
As companies face a shortage of these skills with their current finance teams, they also will likely commit more resources to training and re-training; this will offer opportunities for accountants to obtain the competencies and credentials required to succeed through corporate-funded programs.
Finally, accountants must be proactive in finding the jobs that will expand their capabilities and make them increasingly in-demand for years to come. As the changing priorities of the Big Four illustrate, the 21st-century accountant will be different from that of the last century.
He or she must adapt accordingly. Nothing less than the relevance, and influence, of the accounting profession is at stake. Universities and educational institutes are adapting their curriculum to prepare their students and subsequent graduates to be more future-ready for the workforce.
Certifications like the U.S. CMA has updated its curriculum to be more relevant to the rising new demands, and the core practice areas include Technology & Analytics, Risk Management, Internal Controls, Professional Ethics, Financial Statement Analysis, and others.
When management accounting professionals have the necessary skills and abilities, they can create value in various leadership roles using strategic analysis, including:
- Helping to develop innovation and growth strategies.
- Reviewing and refining strategies to create greater long-term sustainable value.
- Analysing where the company is in a competitive life cycle.
- Communicating the strategy within the company and to the board of directors.
- Developing information for investor relations presentations by the CFO.
- Evaluating merger and acquisition (M&A) opportunities and risks.
- Assessing the strategic risks of the organisation.
- Developing a strategy for the finance organisation.