By some measures, automation has made accounting one of the most endangered professions today. A recent report by the World Economic Forum on the future of work puts accounting, bookkeeping, payroll clerks, and accountants and auditors among jobs most likely to be eliminated through automation.
And, according to a new survey by EY of finance leaders around the globe, 53% of respondents think it’s likely that more than half of the finance and reporting tasks that humans currently do will be automated over the next three years. Over half of respondents think it’s likely that blockchain will become the foundation of finance in the not too distant future.
All is not lost, though.
Despite these omens that accounting automation will eliminate the profession, this new technology will actually make accounting the coolest job at the company. Allow us to explain why.
The Pain of Manual Processes
For centuries accounting was performed pretty much the same way as it was when Luca Pacioli first documented the double entry bookkeeping method in 1494. Transactions were written by hand in big paper ledgers, and then laboriously tallied up to create financial statements. Tiny mistakes would throw the whole system out of balance, and forget about finding that misplaced decimal point among thousands of entries. Even when accountants got computers and Excel in the 80s, most accountants simply reproduced with computers what was done with paper and pencil.
Being an accountant meant spending your days performing highly manual, error-prone tasks. To get a transaction into an accounting system meant manually keying in the information from an invoice or a bill and pushing that transaction step-by-step through the entire purchase-to-cash or procure-to-pay process. Finding errors was a maddening and stress-filled process to make sure the numbers were right.
Much of the work performed really didn’t require a degreed accountant, and that very tedium and the stress of long hours at a computer frequently drove away the best and the brightest of the profession.
Ending the Tedium With Better Numbers
Automation has changed the way accounting is being done. Today, thanks to cloud computing and an explosion of accounting applications with APIs, transactions can automatically flow into accounting systems from external sources without human intervention. Accountants have software that automates entire business processes, which means companies no longer need as many accountants to get the work done.
But this doesn’t mean that the future is bleak for accountants and that robots will take our jobs. Instead, it means accountants will get to do more of the interesting and challenging work, and less of the routine and rote work that machines can do better.
The World Economic Forum predicts that like other technological disruptions, this Fourth Industrial Revolution will create more jobs than are destroyed. Automation may mean the loss of 85 million jobs, but it has the potential to create as many as 97 million new ones.
What kinds of jobs will those be? Humans will still hold an edge for tasks that accountants do better, which includes things like collaborating, advising, making decisions, reasoning, showing empathy, and communicating. The jobs of tomorrow will be either entirely new occupations or the restructuring of old ones.
While the World Economic Forum report does put accounting, bookkeeping, payroll clerks, and auditors among the jobs most endangered by automation, that same report points out professions that will have increasing demand. Some of these are not too far off from what future-focused accountants are already doing: data analysis, process automation, and business development.
What Does This Mean for the Accounting Profession?
Automation will change the way accountants work. If you hired cfo services for small business, automation will make things a whole lot easier and faster for them. We’ll be doing less crunching of numbers and more thinking about numbers. Instead of racing through error-prone manual processes to get updated financials to decision makers quickly, those decision makers will have numbers updated in almost real time. And, because bots excel at repetitive processes, those numbers will be more accurate. Better information means better decisions.
Accountants will have the bandwidth to actually think about what those numbers mean and to provide valuable insights to company leaders. This means that accountants will have to develop the skills and knowledge base to interpret, analyze, and communicate the meaning behind the numbers. Lifetime learning will become the path to job security.
Plus, for more than a decade, a talent shortage has meant that most accountants are overworked. Baby boomers are retiring in droves, and there aren’t enough new people entering the field. It’s a constant struggle to find good people to do the work. This shortage has also meant that many small businesses that could use an accountant can’t afford one or can’t find one. Without automation, there’s no way for accountants to keep up with demand.
We’re also seeing an explosion in the volume of data that accountants are working with. The combination of the Internet of Things, 5G networks, and inexpensive data storage in the cloud are converging to offer the possibility of deeper and more detailed insights. Without automation, accountants have no hope of making sense of any of it.
Automation won’t lead to the extinction of accounting as a profession. We’ll be working alongside machines, each contributing what accountants do best. And that means that finally, accountants won’t just be counting the beans — we’ll be explaining what those beans mean. And that will make accounting the coolest job in the company.