Unless you’ve been living under a rock for the last few years, you’ve heard plenty about the war for (or on) talent in the accounting world.
Jobs in accounting and finance have ranked among the top 10 toughest positions to fill for the last six years. With unemployment for financial professionals at 1.6% for April 2018, it’s no wonder that over 60% of US companies with more than $5 billion in revenue report that their finance function is understaffed. As tough as it is to find good people now, a recent study predicts a global talent shortage of 85.2 million by 2030.
Outsourcing some of those jobs is an option, but even that’s becoming more expensive as the talent wars heat up. Plus outsourcing has its own hidden costs – quality workers cost more, and managing them will be more expensive than you think. Even in India, it’s getting tough to find accounting and finance talent.
So how can finance professionals get the work done with fewer people?
For years, the biggest enterprises have been able to customize their big price tag ERPs to automate the blizzard of transactions hitting their systems every day. But those solutions were specific to that platform – and often for that enterprise only. Typically designed by software engineers and not by accountants, they forced financial pros to work the way the engineers thought the process should work, not necessarily the way accountants work.
Smaller enterprises and those in the mid-market who couldn’t afford those pricey systems were stuck with a lot of manual data entry to get their books in order. But with the advent of cloud technology, automation is now accessible to everyone.
“Chunkification” to the rescue
In 2012, Doug Sleeter, founder of the Sleeter Group, coined the term “chunkification” to describe this phenomenon: “Splitting up separate parts of the overall business management system into discrete parts.”
Workflows for a business can be broken into chunks with discrete solutions. Cloud accounting software with open APIs means that developers don’t have to build the entire vertical stack of solutions required to run a business. Instead, they can rely on a global army of app developers who create the solutions to manage those chunks.
Now we have an explosion of apps that help businesses with everything from accounts payable to customer relationship management. Finance pros can create customized systems and repeatable processes out of these chunks to automate some or all of the workflow that used to require hours of tedious data entry. Modular solutions mean that if there’s a need to pivot and make a quick change, a new app can be easily swapped in.
This innovation also means that accountants don’t have to try to adapt to the way the software designers – who probably aren’t accountants – think the work should be done. They can choose apps that create a custom workflow that works the way they work.
Oracle NetSuite and Sage Intacct were pioneers in cloud accounting software. Netsuite, founded in 1998, is widely seen as the first cloud computing software company. Intacct was founded just a year later and is one of the first accounting applications designed in the cloud from day one. For the small business market, Xero and QuickBooks Online mean that cloud technology is in the reach of everyone.
Redesign the workflow so you need fewer people to do the same work
Enterprises no longer expect an all-in-one solution that works perfectly off the shelf — as if that ever existed! Rather, companies want a stable foundation they can assemble apps around. By selecting apps that handle accounts payable, ordering, inventory, sales tax, time tracking, proposals, workflow, and close management, finance professionals can get the work done faster, more accurately and with fewer people.
Automation does more than reduce the number of staff needed to get the work done – it also leads to greater workplace satisfaction. As I said in this interview, “Combine flexibility with technology and you get really, really happy employees that aren’t going to leave.” Moving people out of data entry into higher level deep thinking means enterprises can take advantage of the intellectual capital of their staff.
For accounting firms, Doug Sleeter described the benefits this way: “The key payoff is that by focusing less on teaching clients to enter data, and more on helping them implement zero data entry systems, everyone becomes more efficient. Your clients can focus more on growing and managing their business and you can move up the value chain and provide high-value business consulting services.”
Core competencies of accountants will change
Accounting textbooks from the generation before me taught students how to use 10-column paper ledgers. They had tips on how to find math errors when manually tallied columns didn’t tie.
Today, computers have replaced paper and pen accounting systems. Bank feeds and automated imports of invoices are eliminating manual data entry. The role of the financial professional is evolving from a focus on data entry and compliance work to higher value advisory and consulting work. These changes to workflow will also be a challenge to firms whose revenue model is based on hourly billing and the hours of data entry that justified those bills.
Cloud Accounting Architects – those who can assemble a system of apps – will be in demand. And advisors who can help enterprise leaders understand what the numbers mean will be an essential part of the new talent mix.
FloQast as the perfect first step in getting chunky
Now maybe I’m biased, but if you have to pick one painful process to fix, it’s got to be the month-end close. FloQast interfaces seamlessly with your ERP and Microsoft Excel to get the books closed faster and more accurately. Implementing FloQast is quick, and because you can keep your spreadsheets, you can keep working the way you work now, only better.