The Keeper - Accountant!
How future can reshape the accountancy profession and how We can capitalize on the opportunities
I know a thousand ways & one more to spend (waste) time. I had this skill for a long time, but pandemic definitely helped me. One of time busters is to watch online automobile reviews. Aimlessly. Hopelessly. Endlessly. Though, on a positive side you can talk about exotic cars (if & when needed) without actually buying, renting or even hitch-hiking one. While consuming one of those bite size videos, v-logger suddenly got my undivided attention. He was somberly remembering the time when Mercedes used to be led by engineers vs the contemporary era when accountants cut the costs and marvels of engineering are suppressed. Same day, I heard another automobile reviewer theorizing that Ford's latest effort to enter Electric Vehicle by using its legendary brand "Mustang" is simply a compromise between its accountants, engineers and sales.
How those unamusing, dry, conservatively dressed folks knowns as Accountants have become so important that they are influencing the products companies are deciding to make or price accordingly. We need a little context with a nonconventional twist & abstract thinking. Accountants popped up whenever, wherever a transaction happened. It began with recording, strengthened with reconciling & became indispensable with reporting. Industrial revolution catapulted accountants to the forefront of 21st centuries' mega corporates. As Spider-Man famously said "with great power comes great responsibility", accountants chaperoned corporates to remain consistently measureable, auditable (accountable) - rather let me put it provocatively - Governable.
How those unamusing, dry, conservatively dressed folks knowns as Accountants have become so important that they are influencing the products companies are deciding to make or price accordingly.
One revolution paves way for another, hence along came Information Technology. Computer Science gained strength, computers became widely accessible. Corporates rushed to convert ledgers in 'pages & books' to ledgers in 'micro chips & memory drives'. Computers proved reliable. They were good at calculations yet the processing was expensive, restrictive, slow and limited to certain prioritized business applications.
We are not covering the history of computers but we are interested in a parallel timeline which was working in a mesmerizing coherence with the personal computer technology. Spreadsheets. In the fateful winter of 1978-79, two gentlemen Dan Bricklin and Bob Frankston, developed the first Spreadsheet solution.
It was named VisiCalc. Mr. Dan Bricklin conceived VisiCalc while watching a presentation at Harvard Business School. The professor was creating a financial model on a blackboard that was ruled with vertical and horizontal lines (resembling accounting paper) to create a table, and he wrote formulas and data into the cells. When the professor found an error or wanted to change a parameter, he had to erase and rewrite several sequential entries in the table. Bricklin realized that he could replicate the process on a computer using an "electronic spreadsheet" to view results of underlying formulae.
This was elegant, intuitive, liberating, enlightening. What could have been the next evolutionary stage. Of course, a pleasant GUI experience. Microsoft came with a bang. With full office suite, Excel was the star. Anyone could crunch the numbers and unsurprisingly everyone started crunching the numbers.
In the corporate machine, Accountants were best placed to capture maximum value from spreadsheets. They were not supposed to know programming unless they intend to become power users. Majority didn't bother, anyways. Yet this gave rise to a whole new subsection of professionals. Business Analysts.
Excel know-how was & still is one of the criteria for hiring an Accountant. I remember being asked in an interview, do I know how to write V-Lookup formula. I didn't. I still don't. I am committed to Sum-If. I support underdogs. Excel gave accountants what they never had. Computing power. It democratized the processing of data.
Who had the best quality and most interesting data in the whole organization. Accountants. Its about money and its reconciled. What else you need. Financial projections became the major portion of the Business Strategy sessions. From IPOs to Annual Business Plans, from credit assessments to performance analysis. Executives, Boards, Investors & all other key stakeholders spend considerable time and effort to understand present & future predictions.
Drill is simple, repeatable and universal. Download aka dump the data from database (sometimes even that database is excel), make multiplications, divisions, sorting, filtering etc. in extremely complex looking excel sheets and then copy paste selected parts to a poorly formatted power point which is later made cosmetically pleasant by marketing dept. Exceptions applied.
Story so far is not bad for Accountants.
Mankind takes another step. Digitalization. This time around change is more fundamental. So far in our Journey starting from Agriculture Revolution, we have basically outsourced physical task to inorganic entities like machines, computers. This time, we are sharing the intellectual space with machines. Algorithms take or guide decisions. They can provide insights which humans cant think of. Potential, huge. Possibilities, endless.
So the question is, what happens this time to "The Keeper". Bookkeeping, operations, reconciliations, reporting - all are becoming increasingly sophisticated and require lesser and lesser human input with every passing day. Finance professional has to justify the ROE now. Expectations are already developing. Finance has been bringing a cohesive view of organizations whether its about controls, performance, projected/estimated future, governance structure. While all areas have been slipping away into the emblem of automation, future projections have still remained very much human centric process. It involves co-ordination, negotiations, stakeholder management, expectations management, gut feel and above all a consistent story across medium to long term horizon. When this whole process could be digitized including the gut feel (say an algorithm tells the forecast. Period. No questions asked), probably the question what would happen to Accountants would be irrelevant as we would need to ask this question for all of us.
Till this happens, digitalization offers immense opportunity to Accountants. When spreadsheets democratized crunching of numbers, just because of the nature of their Jobs Accountants were best placed to take advantage of the data. Their data was structured, reliable, periodic, consistent and traceable. This time, data is Big and its coming from everywhere and from every direction. With enhanced computing powers and sophisticated pieces of code, one may monetize this resource. Who is going to be that "ONE". Why we should write off accountants. They still hold the cleanest data in the organization. Financial Data. They understand the underlying variables which impact the financial outcome, thanks to more than two decades of dominating Business Analysis discipline. What they don't know is programming. That has been a big handicap. Global accountancy professional bodies have lagged significantly in updating the curriculum. We have observed a huge gap in the employer's requirements and accountants being produced. SQL, Python, R & many are considered as foundational knowledge to leverage recent technological strides in data processing, analysis and insights. Its all spanish for most of the Business Analysts.
Coming back to automobiles, Nicolas-Joseph Cugnot, a French military engineer built in 1769 a steam-powered tricycle. It could travel at 2.25 miles per hour with four passengers aboard for about 15 minutes. Now Self Driven cars are more of a question of 'when' rather than 'if'. Inventions are done for geeks. Products are made for masses.
The tools Digitalization brings to the party are quickly becoming No Code - Low Code solutions. GUIs are becoming smarter and smarter. Drag and drop interfaces are intuitive. Sugar syntax programming languages and applications are making Business Analysts feel like seasoned programmers.
In addition to tools becoming more and more friendly. Platform economy is brining robust training resources which were unthinkable just five years back. We have now access to virtually unlimited resources, vibrant communities, idea sharing platforms. If there is one thing, our career depends upon, its our ability to learn continuously. We are in a good position to take advantage of the technology. We have all the learning tools available either free or at negligible cost. Now its upto us, if we can adapt quick, offer a value proposition & be part of the future rather than a legacy from past.