What does automation mean for small to medium accounting firms? Supposedly, according to research by Oxford professors Frey and Osborne, 94% of Accountants and Auditors could likely be replaced by new technology by the mid 2030s.
However, it is still early days for automation, and the likelihood is that these positions won’t disappear completely; they will just adapt to become more sophisticated and strategic.
“Let’s not forget that the accountant’s role has evolved with time; they are no longer just number crunchers. Businesses rely on their finance team to provide strategic advice on top of compliance and cost saving guidance,” says David Chin, Head of ACCA Malaysia.
Furthermore, research from Deloitte’s 2014 report (below) indicates that managerial and directorial roles are relatively safe, whilst administrative and technical roles are facing a high possibility of automation.
“As technology becomes increasingly sophisticated and present in all aspects of businesses, accounting professionals can expect a shift towards more strategic and analytical roles,” says recruitment firm Randstad Singapore.
Predictions for the Future of Accounting
In a recent article by Forbes magazine, they asked six members of the Forbes Financial Council to talk about what influence automation will have on the field of accounting.
Clockwise: J. Goodbread, J. Almond, E. Christman, I. Wrixen,, D. Lyons and L. Reams.
1. Web-based software to replace brick and mortar firms
“As technology drastically increases and older accountants hesitant to use these tools retire, we’ll likely see software take a bigger role in this arena. For example, we’ll probably see a trend of web-based coaches replace your brick-and-mortar accounting firms.”
– Justin Goodbread, Heritage Investors
2. Finance professionals able to focus on strategy
“Today even great financial teams get bogged down in laborious manual activities: reconciliation, chasing A/R, managing cash application or cutting checks. The future is finance that auto-reconciles, contract and payment terms that auto-execute, AI routing cash applications, and smarter billing. These innovations will free up time for the finance team to be less stuck in the weeds and more strategic.”
– Jeremy Almond, PayStand
3. Business owners will have access to CFO services
“Business owners need financial data at their fingertips to run their firms effectively, but hiring a controller-level professional isn’t always feasible. Virtual CFO services will leverage online finance tools to seamlessly integrate payroll, billing, financial statements, financing and more at a fraction of the cost of traditional CPA firms, freeing business owners to do what they do best.”
– Erik Christman, Oxford Financial Partners
4. Accounting will become simpler and more efficient
“We’ve already seen how companies like Wealthfront have come to rely on technology as opposed to human involvement. The short answer is that investing will become easier, filing taxes will be easier, and creating reports in a business context will be easier. The longer answer is that this shift may not happen in the next five years.”
– Ismael Wrixen, FE International
5. The automation revolution could be all hype
I remember earning my undergrad in accounting in 1999, and I was told that accounting out of the box was going to kill the profession. Ironically, my last two CPAs stopped taking new clients because of demand. Smart people want to reduce complexity and increase accuracy. Automation has a long way to go to convince us. – Darryl Lyons, PAX Financial Group LLC
6. Accountants will act more like CFOs than number crunchers
Software is a great tool to minimize the tedious side of accounting and bookkeeping. But you still need to know what the numbers mean. Free from the tedious tasks, accountants will be able to focus their efforts on developing KPI’s, budgeting for growth and assisting in improving cash flow: more CFO like advice without the cost of a full-time employee. – Lee Reams, ClientWhys, Inc.
Tips to Survive the Automation Revolution
Depending on how you look at it, automation can be seen as a threat or an opportunity for your accounting business. It’s hard to separate fact from fiction when it comes to this new technology.
1. Have A Secure Understanding of Your Role and It’s Value
According to Dwayne Bragonier, chartered professional accountant and founder of BAI Bragonier & Associates Inc., being able to interpret the accounting data will be in demand in future.
CFOs will be busy keeping up with the changes. Although staffing costs may drop, the rising cost of technology and experts to manage that technology are expected to grow significantly.
In future an accountant’s job will likely involve interpreting data and finances that aren’t neatly categorised or interpreted.
“There are whole bunch of parameters that are, by their very nature, grey areas. They require a professional to figure them out because they can’t be coded,” says Bragonier.
2. Do Not Hesitate
Technology futurist Rick Richardson, managing partner at Richardson Media & Technologies, makes the point, in his interview with The Journal of Accountancy, that firms tend to focus on the immediate needs of clients. As clients aren’t necessarily concerned with automation, this can be risky. As technology reaches a tipping-point, some firms will be better prepared than others.
“Auditing is going to end up being done by 50 or 100 firms. Those firms are smartly building software and systems as we speak to start auditing in this new era, “ says Richardson.
“You need to understand this new world like you understand accounting. There are very fundamental changes that people need to understand are happening, and they need to begin the process. There is a lot of training that most professionals are going to have to go through to get themselves to the level where they are really comfortable to play in this space.