Challenges and opportunities for the accounting profession
The accounting profession is experiencing unprecChedented change. The digital age is brimming with challenges — and just as many opportunities that are yours for the taking. To succeed in the new environment, you need to understand the issues and quickly prepare to go digital by adapting your practices and developing new skills and expertise. Capitalize on the new realities and be at the forefront of change!
The profession’s positioning: Automation, redefined expectations and collaboration
Although technological innovation often leads to efficiency gains, a number of roles and functions that were once the traditional preserve of CPAs are poised to be replaced by automation.
More and more users are using widely available software to do their own bookkeeping, month-end closings, tax filings and financial reporting.
Powerful software that can process and interpret large volumes of data in just seconds is already on the market, and sometimes even for free.
Automation may be competing with or even replacing some CPA services, but it can also help you improve other processes, diversify your service offering and expand your client base.
- Focus on the human elements of advice, services and communication. Your relationship with your employer, colleagues or clients is all-important.
- Move away from routine and clerical tasks or automate certain processes yourself, and spend more time on value-added work, such as that requiring professional judgment.
- Leverage technology to become a more sophisticated, competent and productive internal or external advisor.
- Optimize your time: adopt automation solutions and explain them to your employer and clients. This will set you apart as a change agent.
Companies like Google process dozens of petabytes daily. So what’s a petabyte? It’s 1,000,000,000,000,000 bytes.1 In the age of Big Data, new needs are emerging and changing what is expected of CPAs.
Regardless of your area of practice, you hold a significant amount of data on your organization, your internal or external clients, and their activities. Information security and integrity have always been critical for CPAs, but clients are more concerned than ever about privacy. You are expected to be able to assess the importance of an organization’s information assets, and you are also expected to protect them.
The data you hold must be used wisely. It can be used not only to predict the future financing or purchasing needs of your collaborators, but also to forecast slow periods. You are expected to be key advisors who can analyze data in real time, prepare forecasts and consider the enterprise’s different functions to make the best business decisions.
More and more, decision makers are basing their decisions not only on traditional financial data, but also on other indicators of value, such as social and environmental information.
You not only need to understand the marketplace and identify how users and investors determine value, you will also need to “count” intangibles such as brand value, environmental responsibility and social capital.
More than ever, financial data has to be interwoven with non-financial data.
As a CPA, you handle large amounts of data. Who in your organization is more qualified to become a data analytics specialist?
- Consider using diversified sources of information to support your strategic thinking: make decisions outside the box.
- Enhance your role by relying on professionals with complementary expertise.
- Maintain or strengthen your advisory role by using the information on hand to clarify the expectations of different decision-making stakeholders.
- Produce real-time automated reporting and develop more sophisticated modelling of what will occur in the future. This way you’ll be able to provide value-added information for decision-making.
- Personalize the user experience by leveraging data.
- Make sure you develop all the skills required to do what is expected of you.
1 Le Big data en chiffres : la révolution des mégadonnées, L'actualité, April 6, 2018.
CPAs may be data leaders, but other leading-edge professionals are well positioned in related areas of expertise and interested in the infinite possibilities of the digital age.
The speed of change makes it hard to upgrade skills in every relevant area, so team up with seasoned partners in other disciplines and combine your expertise to make the best business decisions. Collaboration has always been a core competency for CPAs, so be sure to foster a collaborative environment in your organization.
- Initiate collaboration by fostering dialogue and information sharing as a way to drive better decision-making and excellence.
- Find partners to create a digital ecosystem around your organization.
- Build a team with varied work experience; this diversity will broaden your scope for action.
- Stay current: you can’t be an expert on everything, but you can provide input and explain certain concepts to decision makers.
The changes associated with the digital age are forcing organizations to adapt their business models. Organizations are more demanding and expect customized services that create value and are powered by technological innovation. Regulatory requirements are no longer sufficient to justify substantial investment if the services offered have no intrinsic value for the organization.
Emerging new business models are putting pressure on CPAs to upgrade their service offering and ensure they create the value their clients and employers expect.
If you think that your practice area, whatever it may be, will not change because it’s been the same for years, or that your revenue-generating activities are safe, guaranteed or even reserved to you, think again. The question is not whether your operations are going to change, but rather by how much.
In this context, you have to continually reinvent yourself and offer services adapted to the new business landscape.
A 2014 Sleeter Group survey of 500 organizations highlighted the following gap between what SMEs need and what accountants are offering:
- 85% of SMEs surveyed wanted strategic advice from their accountants, but only 25% said they were getting it.
- 33% were not sure if accountants were able to stay current on market trends, and only 13% perceived accountants as being ahead of the curve.
Do you think things have improved since 2014? It’s up to you to reverse the trend.
Source: The Sleeter Group – What SMBs Want from Their CPA (2014)
Now is the time to review and upgrade your service offering to meet the needs of organizations and their new business models, and ensure that you have the competencies needed to stay current in the digital age.
- Analyze your current sources of income and identify the ones that are growing. Identify resources assigned to declining activities and assess whether they can be reassigned to other areas.
- Review your “safe” activities, the ones you don’t question.
- Determine areas where you personally contribute to the organization’s success. Is your expertise used in a growing, mature or declining area? How are you planning to change your activities to replace those in decline?
- Now that more and more clerical tasks are being automated, start offering strategy-based advice. Tap into the wealth of data at your fingertips to make informed decisions faster and advise decision makers.
- Offer services based on in-depth knowledge of the digital ecosystem and an understanding of the new mechanisms related to digital finance.
- Leverage the potential of data to personalize the client experience and develop business intelligence.
Turn data analytics into a competitive advantage for your organization.
Work tools and methods: Technological change and data protection
Keeping pace with new technologies isn’t easy. The speed at which they appear on the market, the skills needed to use them and the fact that some still need fine-tuning can hinder their adoption.
Some organizations, reluctant to take the leap or lacking the resources needed to update their practices, still do part of their business using obsolete technology or no technology at all.
You have a reputation as trusted advisors and your role is enhanced when you leverage advanced technology. In the face of developing and emerging technologies, you can harness the potential of innovation to guide your organization’s business decisions and assess business risk.
Reasons for delays in upgrading organizations’ digital ecosystems:
- The investments required to acquire and deploy new technologies as well as provide training may be too high.
- Even if organizations or firms have the means, the return on investment is not always easy to quantify or recoverable in the short term.
- Past projects have not always yielded the expected results. If an organization went through a technological change that took longer or cost more than planned, decision makers may be hesitant to undertake change.
- Foster team creativity by giving teams and employees permission to fail.
- Identify sectors that are more ready and try an innovative project. You can parlay smaller-scale successes into bigger projects.
- Don’t hesitate to support pilot projects to narrow down innovation initiatives while remaining open to novelty. The outcome of a pilot project can often be easier to identify. As they say, “fail fast, small and cheap.”
- Position yourself as a change agent, an advisor who stays current on key trends.
- Take the changing digital ecosystem as an opportunity to review your business processes, optimize your operations and develop new niches.
- Open the door to innovative solutions like cloud computing that facilitate file sharing and storage.
New technologies are transforming our society and forcing service providers to innovate in order to stay competitive.
CPAs must anticipate future market transformations and hone their expertise ahead of these changes, as well as know how to use the technological tools that are already part of their environment.
Is it possible to be at the forefront of every innovation? Of course not. As a CPA, however, you are used to staying current in your sphere of action. Don’t let the gap between your expertise and innovation widen.
Academic curriculum and continuing education
Technological skills have been added to the curriculum of future CPAs and the CPA professional development program. Still, new technologies are changing at breakneck speed and it can be difficult to keep your knowledge current. You have to learn, unlearn and relearn if you want to stay ahead of the curve in your organization.
Knowing how hard it is to stay ahead of the game and anticipate technological change, start upgrading your skills now.
- Stay current on innovative initiatives, especially in your own industry.
- Attend events, meet specialists and become an expert yourself in certain areas. Narrow the gap between innovation and you.
- Consult unusual sources of information that provide fresh insight on the potential of technology. How can you use these opportunities in your own practice?
- Seize new opportunities! The key to your own success lies in partnering with other professionals to ensure your projects come to fruition.
Recent incidents in Quebec have highlighted the public’s privacy concerns. In addition to the usual threats of identity theft, Canadian businesses are now the target of cyberattacks. As a CPA, you play a critical role in protecting both financial and non-financial information. In your role as information custodian, you must take advantage of all the tools available, including new technological solutions, and stay on the leading edge of best practices in information security.
Consult the CPA guide on best practices in IT use to assess whether your practices are current.
The disconnect between CPAs’ technological environments (both their work and social environments) and their expertise and ability to protect the information entrusted to them has various effects:
- Ethical risk and possibility of breaching the duty of confidentiality
- Inability to identify at-risk situations
- Difficulty assessing the reliability of evidence
- Incomplete understanding of their clients’ business environments
- Reputational risk for CPAs and their organizations
Because they hold huge amounts of data that may be threatened by cyberattacks or leaks, organizations have to take effective precautions against cybersecurity risks. As a CPA, you are well positioned to understand these risks and propose mitigation solutions. You can choose to be an expert not only on how to add value to data, but also on how to protect it.
- Does your organization have financial and non-financial data management and protection policies in place?
- If so, do they consider the most recent data theft or corruption risks? The most recent protection tools?
- If your organization does not have a policy, should this be your responsibility?
- Define how financial and non-financial data should be collected, secured and used: assume the role of data controller.
Knowledge and talent: Continuous learning and agility
Training is now perceived as an event where CPAs carve out some time in their schedule to “catch up.” But the talent market is rapidly changing, and the skills in demand today may be out of date tomorrow. In this new environment, it is critical to review how you learn.
The CPA Canada Foresight initiative has qualified as crucial the ability to continually learn, unlearn and relearn.
In 2015, the gap between supply and demand in Canada for management professionals with data analytics skills was estimated at around 150,000 jobs.
Source: Canada's Big Data Consortium – Closing Canada’s Big Data Talent Gap (2015)
Although some tasks will be automated, the market will more than ever need professionals to guide decision-making by prioritizing, validating, interpreting and assessing the relevance of results. In short, professionals will be needed throughout the process, both upstream and downstream of technology, to incorporate innovation into operations, train employees, manage different technologies, analyze data and make the best possible decisions.
Reasons for delays in developing the necessary expertise to use technology solutions:
- Changes happen so quickly that it is difficult for CPAs to keep their knowledge of the current digital ecosystem up to date.
- Monitoring technology trends in each industry is time-consuming and resource-intensive.
- Some work habits are hard to change.
- Some people are more resistant to change.
- Others don’t understand just how much innovation affects their practice and why they should question how they do things.
Reflecting current trends, many organizations, including universities, are designing programs that focus on the new skills in demand. They are attracting professionals from different areas seeking to upgrade their expertise and set themselves apart.
The Order also offers several training activities that focus on the digital age and will continue to expand its course offering in line with members’ needs.
Take advantage of the training offered to specialize in specific areas, position yourself at the forefront of change and stay current on key trends.
Diverse, sustained and mentored work experiences can also provide opportunities to develop your skills.
It is important that CPAs have the necessary tools to face the changes brought about by the digital economy. There are many constraints: the importance of core competencies in accounting, the complexity and depth of peripheral competencies, and limited time and resources (training and course availability).
To stay relevant as a professional, you will be required to learn, unlearn and relearn very quickly.
You have to take control of your development and acquire the skills you need to perform your duties and meet expectations without running into difficulty. Appropriate and continuous training will also help reduce the risk of ineffectiveness (poor instincts or methods) and the risk of error that can affect your reputation and erode the public’s trust.
The digital age is the age of lifelong learning. Opportunities to train, learn and specialize abound: reading, continuing education, university education, workshops, conferences, mentoring, etc.
- Identify the competencies you want to develop in the future and draw up a training plan to acquire them.
- Identify technologies that interest you and get the necessary training to increase your relevance and continually enhance decision-making in your organization.
A demographic shock is on the horizon, and it will hit the CPA profession like the rest of the labour market. As the population ages, the profession will need to renew itself and attract new blood, as well as ensure that all CPAs in the workforce stay current and adapt their practices.
As an employer, managing four generations of employees can be challenging, since they do not necessarily have the same work methods or aspirations, and yet they must work together harmoniously.
An attractive profession for the next generation
To bring in new members, the profession has to remain attractive. The competencies, values and technological appetites of generations X, Y and Z are now receiving a lot of attention.
Many experts have nonetheless emphasized that technology is not the only factor transforming the workplace: global influences, advanced specializations, the rapid development of staff, significant demographic changes, as well as changing client and employee expectations are all contributing factors. Changes in organizational structures, regulations and competencies are required to ensure effective leadership.
To attract new members, professionals have an incentive to create a dynamic, evolving and inclusive work environment where everyone’s contribution is recognized.
- Take advantage of the digital transformation to revamp your methods, question your practices and become more agile.
- Offer an attractive work environment that emphasizes achievement motivation, work/life balance and recognition.
- Use innovative methods to promote your employees’ personal and professional development.
- Embrace creativity and initiative.
What skills do CPAs need in the digital age?