2017 Trends for CFO's Trend #4 - Accountants to Become Financial Analysts
Posted by George Rotsch on April 18, 2017
In September 2016, a major retailer announced it was eliminating the accounting and invoicing roles at approximately 500 locations in the western United States and approximately 1200 accountants lost their job. The official reason was to enable the stores to free up time for associates to work with customers. However, the accounting function was not going away… it now going to be done by machines, computers applications that count the money faster and more accurately and the invoice function will be automated and centralized.
The accountant’s role is changing. And yet, we believe this year represents a tremendous opportunity for savvy professionals as the accounting world continues to evolve.
As automation continues to streamline accounting processes, we are watching some accounting teams develop new skills that can contribute to the business in incredible ways. This is the year that savvy accountants are truly becoming financial analysts.
Here is why:
The Model is already working:
We believe that the most forward thinking accounting and finance departments are well on their way to transforming themselves from back office bookkeepers to strategic advisors leveraging IT, and specifically new accounting platforms and Business intelligence software. Technology is liberating the accountant from manual data collection and reporters of the past so accounts can engage in more value-added activities. Thought leaders, like Gary Cokins at the International Institute for Analytics, predicted this future state in 2015.
The report called for accounting and finance teams to explore data on their own (without IT) so that Accounting Departments could contribute by arming managers with better analytical insights that would in turn help streamline procurement, reduce inventory, lead to better pricing strategies or increase profitability.
However, for the less-forward thinking accounting departments, Cokins reported that transformation was happening more slowly in 2015. Most accounting teams were not yet fully automating their accounting processes or moving this way very quickly.
Enabling Technology, Business Demands and the Free Market collide to make this year!
However, we see winds shifting. Like never before, accounting software, from firms like Intacct and Microsoft, enable accounting departments to more easily integrate accounting tools with other business applications, create workflows between accounting applications and business functions and deliver the efficiency that has been promised. Accounting technology is allowing for faster closings and reducing manual data entry while increasing accuracy. History and common sense suggests it will take accountant less time to process basic transactions and perform accounting tasks.
And… in a related note, Robert Half recently reported that demand for Financial Analysts is growing at 12% per year and faster almost any other profession. They report an increased demand for professionals who can deal with financial business decisions and be able to forecast where the company's money is coming from now — and in the future — then help managers decide how to invest it in ways that generate the greatest return.
Also related is the job market. Today, Financial Analysts earn a 20% higher median salary than accountants with 34% greater up-side potential (as measured by the top 10% of earners in each role). The brightest accountants will have good reason to expand their value to their organization and take on more responsibility.
This is the Year, Accountants Finally Become Financial Analysts too!
As finance departments pursues automation with software that enables efficiency, the accounting department will have time to meet the demand for financial analysis and insight. We believe that savvy accounting professionals will seize the opportunity to provide more tools for better decisions.
The best accountants will spend more of their new-found time exploring new analysis methods, experimenting with predictive analytics and pursuing new types of reporting and forecasting. And these accountants will pilot new applications, learn tools and evaluate the latest software.
And… the other accountants who are not looking toward this direction… might be well served to consider what happened to the accountants at that major retailer.