By Hugh Scantlebury, co-founder and CEO at Aqilla
As a long-standing function of business, accountancy has been continually refined by changes in technology. As the Greek philosopher Heraclitus claimed over two-and-a-half thousand years ago, “the only constant in this world is change”. This is still true today, and it is only becoming increasingly profound thanks to our cultural, societal, technological and physical evolution.
So, when it comes to finance and accounting, what are the key drivers of change?
Automation and the business environment
Analysis of the business environment has long been a staple of any successful organisation’s strategic management – whether it’s to understand any possible opportunities and threats, making comparisons to competitors, or to support specific strategic feasibility. Through analysis, patterns began to emerge, strategic management grew in importance, and organisations became more forward-thinking, as opposed to simply reflecting upon past decisions and analysing their success. This change in focus developed accounting departments from simply reporting on what had happened, to developing forecasts on potential outcomes.
Additionally, ranging from the days when calculators helped to speed up the job, to the use of digitised spreadsheets and the development of fully-fledged accountancy software today, automation is continually and positively ‘disrupting’ the profession. For example, the clearly defined rules and repetitive tasks that are part of the responsibilities of every accountant are well suited to emerging technologies such as Robotic Process Automation (RPA). By enabling accountancy professionals across the workforce to spend less time generating invoices, for instance, and focus on more complex value-adding tasks, the finance function is building a wider role in organisations worldwide.
Technological developments will additionally continue to have a broad impact on the financial workforce, and this will consequently influence the skills and knowledge required from the next generation of professionals. The Association of Chartered Certified Accountants (ACCA)’s report “The Race for Relevance” highlights a range of developments that are likely to have a significant and long-term impact, including cloud-based computing, data analytics, robotic press automation and artificial intelligence.
These concepts have developed immensely within the last decade – at the start of which many were still in their infancy – and their prominence and familiarity have grown within the global consciousness.
The threats posed by evermore complex malware, ransomware, DoS and DDoS attacks are among a huge range of cybersecurity issues that are increasing at an alarming rate. Preventative systems can be costly, but pale in comparison to the cost of a successful ransomware attack. According to research from Coveware, a typical ransomware attack costs $84,116 – a figure that nearly doubled in the final quarter of 2019.
With cybersecurity threats in general becoming ever more complex and even harder to predict, finance departments have become more closely tied to their IT departments due to the level of risk, working in tandem to counter an unpredictable threat. How this will develop over the next decade is impossible to predict, yet is certain to drive change for finance professionals of the future.
It almost goes without saying that social media has fundamentally changed the way we communicate. These days, businesses have never had so many choices when it comes to communicating with prospects, customers, clients and staff. Sitting alongside this powerful versatility is a responsibility on all of us to understand what to say and where to say it – this alone is changing the skill set of employees worldwide.
Additionally, organisations need to be mindful of the wider effects of social media, such as the potential it might have to decrease our attention spans. Visual content that delivers clear and concise messages that are simple to digest – it’s just one of the potential issues to be aware of.
Machine Learning (ML) is a branch of Artificial Intelligence (AI), giving technology the ability to carry out tasks without needing a specific set of instructions. More specifically, a computer that is processing data can learn from the input, output, and the process between them, to generate more cohesive and effective algorithms based on pattern recognition. This enables the computer to make more accurate predictions in new data, based upon the patterns that are perceived at the beginning of the process. A good example of ML in common use is the development of email spam filters that can learn and spot patterns in behaviour in incoming mail.
These examples help explain why the meaning of the word ‘disruption’ has morphed in recent times to imply that change – particularly when it is technology-driven – is not only positive but necessary. In the finance and accountancy worlds, those who embrace and encourage change are likely to become the future success stories we all need.