By JULIA MILLER
For years, technology has been changing how we do everything from driving to paying our bills. Just as new websites and applications have improved our abilities to handle our personal finances, software has made some aspects of accountants’ jobs more efficient. As organizing and tracking debits and credits gets easier, accountants can turn their attention to other ways to serve their clients.
“Automated processes, like point-of-sale systems, make hand recording journal entries a quaint line drawing in an antique book of an employee with a quill pen,” said Dr. Noel Addy, accounting professor in the Richard C. Adkerson School of Accountancy at Mississippi State University. “The remarkable enhances in technology are terrific opportunities for the alert and enthusiastic accountant.”
To understand the future of accounting, it is important to understand the basis of what an accountant does. Although accountants are associated with balancing books and handling financial statements, there is a deeper basis for their skill set.
“Accounting has a historical interest in making certain that the data is correct,” Addy said. “We have a set of broad principles of checks and balances that control how the data is processed. These internal controls are designed to see that the data is processed cleanly and that the person making the decision on the far end is not mislead.”
The skills needed to aggregate data, ensure its accuracy and analyze the implications can be used to provide businesses with useful analytical advice outside of their financial books. Cecil Harper, president of Harper, Rains, Knight & Company, said they offer a toolbox of analytical and valuation skills to help their clients move in the right direction.
“We sit with our clients and discuss their goals. How can they get there? What’s the game plan?” he said.
The accounting firm is then able to look at financials and metrics on a monthly or bimonthly basis to see if they are moving in the right direction. A business valuation can help as well on an annual or biannual basis. Harper said valuation gives a broader picture that can inform decisions from contracts to life insurance.
“The accountant’s approach is always that the purpose of having data is to facilitate a decision,” Addy said. “Collecting data that isn’t likely to be useful for a decision is not something that should persist for long. The accountant’s focus on decision makers is a plus and likely helps improve the data collected and how it is organized.”
Addy explained that accountants now have the ability to pinpoint products and areas where growth is taking place. For example, suppose sales are growing in one metropolitan area. The sales might be growing because the products are getting more market penetration in the existing population, or it might be that the population in that area is growing. External data sets can tell.
“The wise decision maker always kept these ideas in mind,” Addy said. “It’s easier to get the data now, and the alert and enthusiastic accountant can play a role.”
However, these innovative routes are not just for the accountants. Joey Havens, executive partner at HORNE CPAs and Business Advisors, explains that it’s equally important for CEOs and business leaders, regardless of industry, to understand the importance of these skill sets.
“CEOs are stating that the next three years are more critical than the past 50, with 4 out of 10 stating they’re transforming how they do business during the next three years,” he wrote in his blog. “This includes 62 percent who are planning to deploy disruptive technology and 65 percent who will be partnering to meet the speed of the change.”
Although a large majority CEOs understand the importance of building an organization for the future, only 11 percent reported that they knew how. Havens said his team is able to these businesses move forward and utilize technologies, such as IBM’s Watson, to improve their services.
“[AI] is a long way from moving any of us out of our offices,” he said. “In fact, I plan on using Watson and other AI to help our clients, team members and firms achieve results that were not possible before.”
As accountants adapt to the future direction of the industry, it becomes important for business owners to take advantage of their expertise to direct them toward success.