The Roles of Accountants: Two Decades Ago vs. The Accountant of the Future
Dec 12, 2024
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In the world of business, the role of an accountant has always been synonymous with precision, analysis, and a deep understanding of financial systems. Two decades ago, accountants were primarily seen as number crunchers, working long hours to ensure accurate and compliant financial records. Fast forward to today, and the accounting profession is undergoing a significant transformation. From the rise of internal shared service centers to the increasing adoption of outsourced accounting services and more powerful software tools, the landscape of accounting is changing faster than ever. But what does this mean for accountants, both those in the field today and those entering the profession in the future?
In this article, we'll examine how accountants' roles have evolved over the past two decades and what they might look like in the future.
The Accountant 20 Years Ago: The Backbone of Business Finance
Two decades ago, accountants were often considered the backbone of any business's financial operations. Their primary duties involved manually preparing financial statements, reconciling bank accounts, maintaining ledgers, and ensuring tax compliance. This was before the proliferation of cloud computing, artificial intelligence, and data analytics. While technology existed, it wasn't nearly as advanced or accessible as it is today. (I certainly don't remember any iPhones in 2004.)
In-house accountants were typically part of a small team within a company. They managed everything from payroll to tax returns and ensured that financial documents were in order. They often worked long hours, especially during month-end or year-end closing periods, ensuring the company's finances complied with the relevant accounting standards.
But it wasn't just about the numbers. Accountants of the past were also the trusted advisors to business owners, helping to inform key financial decisions. Despite the limitations of technology, accountants were deeply involved in advising on budgeting, financial forecasting, and tax planning.
While these roles were crucial, they were also quite time-consuming. Much of the work was repetitive, and accountants were often bogged down in paperwork and manual processes. It is common to have a large accounting team for Accounts Receivable (AR) and Accounts Payable (AP) functions, especially when the company is in industries where voluminous transactions are prevalent. This was the age of spreadsheets and basic accounting software, with little automation in sight.
The Accountant of Today: Embracing Automation and Efficiency
Fast forward to the present, and the role of accountants has evolved significantly. Today, accountants are no longer just number crunchers—they are business partners who use technology to make more informed decisions. Cloud-based accounting systems have revolutionized the profession, allowing accountants to streamline tasks and gain real-time insights into a company's financial position. (Say hello to your iPad and tablets!)
Technologies such as artificial intelligence (AI), machine learning, and robotic process automation (RPA) have been integrated into accounting systems, allowing for greater automation of routine tasks. This includes everything from automated invoicing and expense tracking to predictive analytics to help accountants anticipate financial trends and issues. This automation reduces the time spent on manual tasks, freeing accountants to focus on more strategic and value-added activities.
Furthermore, the trend towards outsourced accounting services and the development of internal shared service centers (SSCs) has redefined how accounting is managed in many businesses. Shared service centers, often based in central locations with affordable staffing costs, handle financial operations for multiple branches or divisions of a company, centralizing tasks such as payroll, accounts payable, and accounts receivable. For many businesses, outsourcing accounting functions to specialized firms is an attractive way to reduce overheads and access specialized expertise without the commitment and expenses needed to maintain an in-house accounting team.
Accountants today are required to be skilled in data analysis, financial planning, and advisory roles. With accounting software that can perform many of the manual tasks, accountants are expected to offer insights into business strategy, financial forecasting, and risk management. This shift in focus from transactional work to advisory work has led to a demand for accountants to have broader business acumen and stronger communication skills. The days where volume is the cause for frequent overtimes are gone. Instead, analysis work, problem-solving, and stakeholder-management duties become the new norm that forms the daily routine of accountants.
The Accountant of the Future: A Blend of Technology, Strategy, and Consulting
Looking ahead to the future, the accountant's role is expected to become even more strategic and advisory in nature. Technology will continue to play a key role in reshaping the profession, but the human element will not be fully replaced. As automation and artificial intelligence take over many of the more mundane tasks, accountants will find themselves freed up to engage in higher-level activities such as business consulting, financial strategy, and risk management.
One of the key changes expected in the future is the continued rise of internal shared service centers and outsourced accounting firms. These models will continue to gain traction, particularly for mid-sized businesses and large corporations, as they provide cost efficiencies, scalability, and access to top-tier expertise. This shift means that many routine accounting tasks—such as bookkeeping, payroll, and tax filings—will likely be handled outside of traditional in-house teams. This is also true for smaller firms where maintaining an in-house accounting or finance team is too costly and requires higher commitment.
For businesses, outsourcing accounting services or establishing internal SSC offers the ability to scale operations without investing heavily in additional full-time accounting staff. These outsourced accounting services can handle everything from month-end closing to tax compliance, allowing businesses to focus on core activities while ensuring their finances remain in order.
However, while outsourcing and shared services will dominate, the in-house accountant will not disappear completely. Accountants will still be needed to oversee financial governance, ensure compliance, and provide strategic insights tailored to the business's specific needs. Their role will shift from purely transactional to a more consultative approach, guiding decision-makers with real-time financial insights and helping to optimize business performance. An in-house accountant will always have the advantage of understanding the company better than another outsourcing or SSC; hence, it would not be surprising if they are the best person to oversee an outsourcing or SSC engagement. This arrangement is typical in larger companies where a lean finance or accounting in-house team engages and supervises an external firm or an internal SSC team. By doing so, companies may enjoy significant cost savings while retaining control and expertise in their desired area.
How Technology and Outsourcing Will Change the Accountant's Role
Technology has already begun to reshape how accountants work, and this trend is only expected to accelerate. Powerful accounting software such as Xero, QuickBooks, and Sage, coupled with advances in machine learning, will allow for faster and more accurate processing of financial data. This technology will empower accountants to quickly analyze large amounts of data and generate meaningful insights that can influence strategic business decisions.
Moreover, the increasing trend of outsourcing accounting functions means that many businesses will look to accounting firms for comprehensive financial management solutions. Outsourcing firms will take on roles that were once the sole responsibility of in-house teams, such as bookkeeping, payroll processing, tax filings, and even financial reporting. By outsourcing these functions, businesses can reduce the administrative burden on their teams while gaining access to professional expertise at a lower cost.
Interestingly, this trend may dilute the role of in-house accountants in certain areas, but it will never fully diminish their importance. In-house accountants are still essential for complex decision-making, high-level financial management, and compliance oversight. Their role will increasingly focus on interpreting the data provided by software and external service providers, offering strategic recommendations, and ensuring that financial decisions align with the broader goals of the business, similar to what was mentioned in the earlier section where In-house accountants will undertake a supervisory role.
A Balancing Act: In-house Accountants and Outsourced Solutions
Ultimately, the accountant of the future will need to strike a balance between embracing automation and maintaining the critical thinking, expertise, and advisory role that businesses rely on. While shared service centers and outsourced accounting firms will handle many routine financial tasks, the strategic oversight provided by in-house accountants will remain indispensable. The future accountant will need to adapt to the ever-changing landscape of technology, managing both automation tools and high-level financial strategy with equal expertise.
As a result, the role of the in-house accountant will continue to evolve, but it will never disappear. Instead, it will become more value-driven, strategic, and centered around helping businesses make smarter, data-backed decisions. The key will be staying ahead of the curve, adapting to emerging technologies, and providing insight and leadership in a constantly changing financial world.
Conclusion: Embracing Change While Maintaining Value
In conclusion, the accounting profession has undergone dramatic changes in the past two decades, and these changes will only continue in the future. While outsourcing and automation may take over many of the transactional tasks that once defined the accountant's role, the accountant's importance as a trusted business advisor remains. The accountant of the future will be a hybrid of financial experts, strategists, and consultants, leveraging cutting-edge technology to provide high-value insights and drive business growth.
So, while accounting firms and internal finance teams may evolve, one thing is clear: the future of accounting will be less about spreadsheets and more about strategic, insightful financial decision-making. It's an exciting time to be in the profession, and those who embrace change and innovation will lead the way.
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DISCLAIMER: The views and opinions expressed in this article are those of the author and do not necessarily represent the views and opinions of any individuals or organizations with which the author may be affiliated, either in a professional or personal capacity, unless explicitly stated.
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