The level of accounting automation continues to grow. Bookkeeping and accounting systems are getting smarter. While digitalization and modern information technology will continue to transform the accounting profession, at this time, we cannot say that accounting is an endangered profession. There is a huge market for accountants who can really explain numbers and add value.
Just categorizing transactions is not what accounting is becoming. Basically, we're becoming more like a virtual controller. Since Intuit launched Quicken, its first product, 36 years ago, the end of accounting as a profession has been inevitable. So your accountant may not have a job in the future, but plastic surgeons and emergency room doctors should do it right.
And the plumbers, said Pugliano, will always have jobs. The Department of Labor's Bureau of Labor Statistics (BLS) reports that accountants and accounting clerks will experience a 4% decline in employment during the decade ending 2028, compared to a projected 6% increase in opportunities for accountants and auditors during the same period of awhile. Most experts blame technological change for the expected drop in employment growth for accountants. Software innovations, such as cloud computing, have automated many of the tasks that these people used to perform.
As a result, the same amount of accounting work can be done with fewer employees, which is expected to lead to job losses. However, as more of their routine tasks become automated, accountants are expected to assume more analytical and advisory functions. For example, rather than performing manual data entry, accountants will focus more on analyzing reports and pointing out potential areas for efficiency gains. On the surface, this negative growth rate indicates that the need for administrative support will decrease substantially in the short term.
However, when we take a closer look at BLS and US, S. Data from the Small Business Administration (SBA), professional journals and media articles, as well as responses to our own small-scale survey, found that projections of lower employment and automation that replace accountants may not be entirely accurate. There will continue to be a strong demand for these professionals. However, the combination of an ageing population of current accountants and fewer new participants in the field will be insufficient to meet the needs of many enterprises, especially small and medium-sized enterprises (SMEs).
While statistics predict negative overall employment growth for accountants due to automation, there are still a large number of new and replacement jobs, driven largely by the ageing workforce entering retirement. Of course, this impending crisis did not happen to us overnight. For years, administrative accounting offices consisted of a large number of employees and bookholders who kept themselves busy with manual tasks, from writing thousands of orders in a large database to sending payments to vendors, tracking customer balances and generating aging reports. Today, “robots”, that is, software, have automated these tasks, allowing some large companies to reduce their accounting and finance departments and thus reduce their labor costs.
While large companies will no doubt continue to use high-powered software programs to automate financial and accounting functions in order to save money, the same software is too expensive for most small businesses. The bottom line is that small businesses, those defined by the SBA as having fewer than 500 employees, will still need accountants, particularly in the short term, and many of them. To test this assumption, we conducted a pilot survey of 16 U.S. UU.
,. In our sample, the average age of accounting staff was 54 years old, which classifies them as Baby Boomers and all of our respondents said they use automated accounting to at least some extent. So what have we learned? On the one hand, none of the companies reported outsourcing any of their accounting functions, although some indicated that they had plans to further automate these tasks. That said, none of them believed that this increase in automation would reduce staff.
The reduction or plans to reduce the size were not in its future either. These findings support our initial assumptions about the continuing need and imminent shortage of bookholders, which means that SMEs would be prudent in assessing their administrative accounting needs immediately. For more information about our survey, see “SME Survey. The staff of these agencies almost always come with some kind of previous experience and may be available on a full-time or part-time basis.
If your company does not have the resources or turnover to hire a full-time internal accountant, this may be a viable solution. Temporary staff often become full-time or permanent part-time employees after payment of agency fees. SMEs should initiate discussions with local private business schools and community colleges that offer accounting or bookkeeping programs. By working closely with Career Services or placement offices, companies can gain access to viable candidates in a reasonably short time.
In many cases, schools host career fairs specifically designed to connect employers with graduates. Providing paid internships is a particularly cost-effective way for SMEs to test new candidates before hiring them permanently. Small businesses may not generally offer educational benefits; however, managers may consider offering tuition reimbursement to an employee who is willing and able to obtain training, certification, or a degree in accounting. In many cases, current employees are the best candidates because they already have strong ties to the company and understand how it works.
Basic accounting courses, training in accounting software (such as QuickBooks), and some on-the-job training can transform an existing employee into a trained accountant. The challenge is to identify a qualified person whose schedules are flexible or whose tasks can be shared or ultimately taken over by someone else in the company. Small businesses will continue to rely heavily on accountants and accounting clerks because they will be more profitable than software programs used by larger companies. That said, these companies must also realize that the use of this technology will continue to spread and, as such, they must begin to look for efficient and low-cost ways to help complement and assist staff accountants as the business grows.
Independent accountants (often self-employed retirees) offer accounting and bookkeeping services at reasonable prices. In many cases, this is a good option for SMEs. But if a constant workload or a more permanent presence is required, this option could be costly. Several local and national companies whose main objective is the outsourcing of accounting and bookkeeping services are emerging and becoming viable options for SMEs.
Popular cloud-based accounting software, such as Xero and QuickBooks, enables many companies to serve customers in a completely virtual environment. Our interpretation of BLS and SBA data reveals that, even though the trend is towards lower employment and automation that replaces accountants, the aging population of accountants and accounting employees currently in the workforce, combined with the number of new entrants to the field, will not be enough to meet the needs of many companies, especially SMEs. This means that small businesses with accountants and employees in the baby boomer demographic need to start planning for staff replacement while ensuring that cutting-edge technology is used productively and profitably. With a little advance planning and following one or more of the strategies we've detailed, it's possible to avoid getting caught up in a changing work environment.
In the process, you'll develop the skills to acquire and nurture the accounting and management talent you need to ensure your company's success today and into the future. Finally, someone understands that there is a shortage of counters. Part of the problem is the fact that most “young professionals” want to become public accountants and not accountants. The first fundamental step for data security Strategic risk in the new normal Advancing digital transformation in the face of the fourth industrial revolution.
When I started my career, it was common to find accounting firms with many accountants on staff, who offered accounting as a key (and cost-effective) service to their clients. Hence the need for internal accountants to help them determine in tens of thousands of small businesses which part of the accounting process to automate next. . .