By Tod McDonald, co-founder, Valid8 Financial
The accounting field is facing a formidable challenge: the departure of many experienced professionals and the uphill battle of attracting new talent.
According to the Bureau of Labor Statistics, the profession has lost 340,000 accountants in just over a decade, and the number of accounting graduates has dropped dramatically. Many companies have cited a lack of accountants as the reason for financial reporting delays. The dwindling workforce’s impact will create a significant ripple effect if not corrected.
At the heart of this problem lies a disconnect between the tech-savvy expectations of digital natives and the outdated, manual practices that still prevail in many accounting firms. Pay compounds the problem, with entry-level accounting salaries falling below many other industries.
How can the accounting industry reposition itself to attract and retain tomorrow’s financial leaders?
It must undergo a fundamental transformation to reimagine the role of accountants and align the profession with the technological competencies and expectations of today’s digital generation. Harnessing technologies like artificial intelligence (AI) and automation will be imperative.
Redefining the Accountant Role
Today’s graduates are the most digitally proficient generation yet. They are accustomed to an environment where technology seamlessly integrates into everyday life, streamlining communication, information access and problem-solving. However, when they enter the accounting workforce, these digital natives often face antiquated systems and repetitive manual tasks, a stark contrast to the digital fluidity they expect.
The journey to revitalizing the accounting profession starts with integrating advanced technologies to eliminate tedious tasks and enhance the strategic nature of the job. This change will make the field more attractive to new graduates while also reducing attrition for current employees.
AI can streamline the arduous process of financial data preparation and management. Traditional manual approaches are characterized by their demanding nature in terms of time, effort and cost. Consider one of the most data-intensive examples of financial work – a fraud investigation. A forensic accountant might spend 90% of their time preparing data, leaving limited bandwidth for comprehensive analysis. While this kind of specialized work is just one kind of accounting, if a better approach is possible for such high-stakes work, imagine how other facets of accounting could also evolve, from traditional audit to global M&A advisory.
By moving from manual entries to an automated data preparation process, AI can automatically extract transactions from a variety of financial documents. AI-powered verified financial intelligence (VFI) streamlines data preparation. Additionally, AI-enabled platforms create financial data visualizations, turning thousands of complex transactions into understandable graphics and diagrams highlighting fund movements and potential anomalies. This capability enhances financial visibility and aids in developing clear case narratives.
By making data insights easily accessible and actionable, accountants can focus on more rewarding tasks, like analysis. This shift aligns accounting roles with the expectations of the digital generation. Incorporating these AI-driven tools into the accounting field can transform the roles of accountants, shifting them from data entry tasks to strategic, data-centric positions. For instance, accountants can become more valued as data strategists who provide crucial insights and support decision-making processes rather than being confined to the rote tasks of reconciling small details in spreadsheets.
For accounting firms, the pathway forward is clear: embrace technological transformation, reimagine the role of accountants as data and evidence-centric strategists and align work practices with the digital competencies of younger generations. By doing so, the industry not only positions itself as a cutting-edge career choice, it also ensures its long-term viability amidst a rapidly changing business landscape.
About the Author
Tod McDonald, is the co-founder of Valid8 Financial. Early in his career, he was an auditor with Ernst & Young and has spent decades navigating complex financial situations, including leading an investigation that unraveled a $200 million real estate investment Ponzi scheme in the state of Washington. He co-founded Valid8 Financial to expedite data prep, eliminate sample risk, and improve the speed and quality of rendering a professional opinion on complex financial cases.
