3 min read

The future of accounting is data-driven

The future of accounting is data-driven

– by Magnus Bilke

I've been involved in accounting for about 20 years, and a lot has changed. The financial software that helps companies keep their numbers under control has gotten better and better. Some people wonder: Will we still need accountants in the future, or is the profession dying out? I am absolutely convinced that we will still need accountants in 30 years… or 300, but let’s see. The profession is changing rapidly though, and only those who keep up with the transformation are going to have a future.

Old-style accounting has no future

As an interim accountant, I, both now and then, find myself in companies where everything is still booked by hand. First a pdf is downloaded. Then it is printed out. And then the numbers are manually typed into the accounting program. I'm sorry to say, but this type of accounting practice is becoming increasingly outdated and really, has no future. That is not to say, however, that there is no place for bookkeepers anymore. Although, it means that people still working in that way urgently need to acquire new skills. Here's an example that I experienced myself. I came to a company as a consultant where everything was still booked by hand. The accountant was a highly professional and skilled person which happened to be a very fun, and nice contact as well. When I told her that their data entry really should be automated, she wasn’t convinced. Instead, she offered me a wager. "Bet I post 100 invoices faster than you with your software." No joke, that scene happened just a couple of years ago in Berlin.

I see the accountant of the future as a data scientist who needs analytical and strategic understanding.

Automation beats speedy typing

Of course I took the bet. The accountant started typing away at light speed. It was pretty impressive how quickly she entered the numbers into the system. After no more than ten minutes she was done and gave me a triumphant look until I turned my screen to her and she realized it had taken me only two minutes to upload all of the 100 transactions. The time savings were obvious and she made up her mind. That personal eureka-moment marked the day when she first started to look seriously at automation in accounting. She moved to importing data automatically instead of entering it manually. Eventually, she became the upload queen in her company.

The accounting of tomorrow has important strategic tasks

The future belongs to data-driven accounting. I can only advise every company to get ready for it. Use all of the data that your company generates digitally. This is not only faster, but also less prone to errors. However, the accountant will not become superfluous, the expertise is needed for other things. The accountant of the future:

  • monitors the computer-controlled processes,
  • prepares analyses for strategic action plans,
  • formulates forecasts for the future financial development,
  • advises management on financial strategy.

Accountants must turn into data scientists

I see the accountant of the future as a data scientist who needs analytical and strategic understanding. Monotonous accounting processes can be streamlined. The accountant must focus on the added value of his work and generate creative solutions from his perspective. But that also requires the right mindset. He or she must be willing to abandon old routines, take responsibility and think out of the box. In short, he or she must be agile, fearless, and open-minded.

Training pays off

Even if accountants often lag behind in terms of digitalization, not everything can be blamed on them. In order to unlock the potential of the digital age for the company’s accounting, the corporate culture must be aligned with the digitization and its challenges – in all departments! Maybe incentives help to digitize processes, for example through a bonus system. Accountants who may have learned their trade 25 years ago may need further training to be able to use new techniques. But let’s remember the example of the upload queen I mentioned. It pays off!

If you are interested in discussing this with me, you are welcome to send me an email