Danetha Doe sized
Technology is causing monumental shifts within industries unaccustomed to change. From streaming sites such as Spotify disrupting the music industry, to AirBnB shaking up the hospitality world, to the cable industry finding itself in a losing battle with Netflix… the list goes on and on.
And now we are beginning to see this within the accounting industry. A profession that has not experienced any semblance of disruptive innovation since the advent of double-entry record keeping. The emergence of various technologies that are enabling automation is leading to a major disruption in the role that accountants play.
This phenomenon of major disruption caused by innovation is known as a creative destruction, a term coined by Joseph Schumpeter. Schumpeter was an Austrian economist and known as one of the greatest intellectuals from the 20th century. Creative destruction describes the process of how innovation deconstructs long-standing arrangements and frees resources to be deployed elsewhere.
In addition to innovation, there is also a mindset shift occurring within accountants. Today, we are seeing an increased desire for empathy, connection, collaboration and work-life balance. These desires have always been present, but technology is now available to accounting professionals to support the manifestation of these desires. Therefore, I am renaming this phenomenon as a creative renaissance for the accounting industry.
This creative renaissance is a time period where accounting professionals will have the ability to explore opportunities that are more fulfilling and in alignment with their passions. However, in order to do this, accounting professionals must develop a new set of skills that will enable them to evolve as quickly as these emerging technologies.
The emerging technologies that are driving this creative renaissance began with accounting software moving from desktop to cloud-based programs. This enabled accounting professionals to build location-independent practices and careers. The adoption of cloud technologies, gave birth to the current need to adopt Blockchain, Artificial Intelligence and Robotics Process Automation.
Blockchain is a distributed ledger that allows for real-time verification and transparency. This will have the most impact on the audit functions of a company by tremendously reducing the hours of their workload. AI and RPA will heavily impact the tax industry by automating compliance procedures. Companies like Avalara are already showcasing the power of technology in eliminating the need of manual sales tax preparation and filing.
What does this all of this mean for the accounting professional? Will their jobs be completely replaced?
Absolutely not! If, and this is a BIG if, the accounting professional makes an effort to develop new skills to meet the changing needs of their clients. Collecting the data, inputting the data and producing financial statements will increasingly become more automated and of reduced value to the client.
The new skills needed will be in the ability to interpret the information and make qualified recommendations on how to improve the business.
Business owners will be looking for accountants that can help them with strategy in their unique situation. As automation continues to increase, the current role of the accountant will become commoditized. Not only will you need to help your clients with strategy, you will also need to learn how to differentiate yourself and your firm from other options through branding and niche mastery.
Here are three things you can do today to prepare yourself for the future of accounting.
- Choose a niche. Become familiar with your target market’s industry trends by reading their trade publications and attending their conferences. Not sure where to start? Be on the lookout for our next post, “The Riches are in the Niches: 10 steps to define and find your niche.”
- Seek out technology trainings. Be proactive in learning about RPA, AI and blockchain. Check out trainings at your local association chapter for continued education in these areas.
- Invest in developing your creative skill-set. Such as writing, photography and marketing. You can start by subscribing to our Future of Accounting podcast for weekly tips on how to develop your creative skills.
About Danetha Doe: Danetha is the creator of Money & Mimosas and the host of the Future of Accounting podcast where she covers emerging technologies and their impact on the accounting profession. Subscribe to her weekly newsletter for more insights on the future of accounting.