How to Navigate Accounting Changes in the 21st Century
Initially posted via LinkedIn (here)
1494. That was the year a new phenomenon known as accounting arrived on the scene. Most people don't realize this, but accounting uses very basic math in a concise way that provides checks and balances within itself. Hence, the double-entry accounting system. If one number is off, then the whole system is off. Left-brain professionals, like myself, usually love this because it's a clear indicator of an error. Picture a bright, flashing red light with a siren attached yelling, "Computer alert, computer alert!" 🚨
Accountants have spent over 500 years adding and subtracting money using these very "strange" equations. With the emergence of Artificial Intelligence (AI) and automation, the current role of the accountant is becoming more and more obsolete. Instead of using humans to do the bookkeeping and accounting - now, the systems do it all. Therefore, accountants need to switch to things like analysis and data integrity. However, with this switch, comes a new set of skill requirements.
It's one thing to DO the accounting, it's a completely different thing to know how to search for mistakes using professional skepticism and good old fashion detective work.
This is especially difficult when we still teach accounting the same way they did back in 1494 - on paper. While, yes, I understand the importance of absorbing the basics before moving on to the complications that technology introduces, I feel our students would be better served learning accounting and technology in a complimentary capacity. The current structure is to learn accounting basics, (aka Accounting 101) in the traditional way. Then, if you want (or if you're lucky), you can take a separate course to learn all about accounting information systems and accounting technology. In some cases this may just mean Microsoft Excel and Quickbooks. The issue is that our up and coming accountants do not graduate from college ready to face this AI world. I mean, come on - it's 2020, cars can move and navigate traffic without a driver behind the wheel.
Many organizations are phasing out their bookkeeping and/or accountant roles. These roles are becoming obsolete because their accounting system talks to their payables system, which talks to their records and receipts system.
Let me be clear, there's no shade here. I can personally confirm and fully vouch for the fact that all of this "talking" works beautifully and saves lots of time and money.
However, what about my friends? My students? My colleagues?
This topic was inspired by a conversation that I had with my sister this weekend. She asked me, "Can you teach me accounting?" While it was completely random and out of the blue, it got me wondering, where would I even start? Yes, the fundamentals are super important and required, but in order for her to come into this profession with marketable skills, she would also need to learn how to oversee the "talking" of these systems.
Last year, I spent so much time developing my Youtube channel with more traditional methods, but I'm wondering if there's a need for a shift. Would it make more sense to prioritize the gap that exists between current accounting education (supply) and what's actually needed in the accounting world today (demand)?
As a professor of accounting, it's my duty to prepare my students for the real world. As a lover of accounting, it's my job to ensure that my profession does not fizzle out and die due to AI and automation. So it sounds like - I have some work to do.
Please join me by checking out my website and subscribing (at the bottom) to keep up with my journey. Updating 500 years won't be easy - I'll need all the help and support I can get! 😉