Economic subjects | Accounting » Current Trends and Outlook for the Accounting and Finance Landscape

Source: http://www.doksinet CU R R ENT TR EN DS A N D O U TLOO K FO R TH E ACCO U NTI N G A N D FI N A N CE L A N DSC A PE With optimism continuing to grow from the past several years of economic recovery, the accounting and finance profession has found itself in a state of flux. Current trends carry broad implications for business practices and staffing dynamics, and the rate of change has shifted from slow and steady to rapidly accelerating. Given the pace of progression, today’s accounting and finance landscape could serve as a modern day illustration of the ancient Greek philosophical assertion that the only constant is change itself. A closer look at industry developments suggests that while adapting to today’s market is critical, an even greater determinant of success lies in anticipating future trends and taking steps to prepare for what’s ahead, well before it comes to fruition. Development of such vision requires strong insight into the conditions of today’s

accounting and finance landscape. M O DERN I ZAT I O N A N D T ECH N O LO GY A DVA NC ES Many companies that delayed costly system and technology upgrades during the recession are now cautiously making capital investments in an attempt to come up to speed in today’s market. On the conservative end, companies with antiquated systems are implementing upgrades to improve efficiency of processes and better fulfill client requirements. Enterprise Resource Planning (ERP) upgrades, for example, are the simplest level of investment companies are making to catch up. Beyond such minimal upgrades, companies are further realizing the necessity of moving to cloud-based accounting and financial systems in order to remain current in today’s digital business environment. According to “CPA of the Future” study data from the American Institute of CPAs (AICPA), 90 percent of the 75,000 surveyed CPAs agreed the accounting profession’s digital future is “rapidly approaching,” with companies

facing a critical need to integrate digital business processes and use of the cloud to deliver accounting services. Despite this consensus, only 8 percent of study respondents believe the profession is actually prepared for this digital future. The troubling disparity between the industry’s acknowledgement of where the profession is headed and their perception of its preparation for this looming future is likely reflective of lingering recession-era practices. Overwhelmingly, though, companies recognize the necessity to transition to cloud-based software and software-as-a-service (SaaS) versions of traditional on-premise products to keep pace with competitors offering exclusively cloud-based services (Canton). Additionally, the focus on Big Data continues, with more intentional linkage between finance, IT and accounting, as well as a discernable shift toward making the audit process less of a one-time event and more of an integrated and continuous business Source:

http://www.doksinet practiceone decidedly proactive in nature. The prevalence of Big Data drives a requirement for continuous monitoring and management of large volumes of data; it also forces companies to most efficiently position their workforce to find, analyze and use the most relevant information. Access to Big Data presents not just challenges but also opportunities, with issues of fraud and cyber-security becoming less an anomaly and more an expectation in today’s digital environment. Companies “providing services in litigation support and forensics, where the ability to sift quickly and efficiently through increasingly large amounts of data will be very valuable (Accounting Today).” Even with the last several years’ economic rebound, many small to mid-market companies still keenly focused on cost-saving initiatives have adopted a moderate, almost reluctant approach to upgrading legacy systems. But the business climate of 2016 and beyond will not permit such

conservatism. And a growing sector of the market is demonstrating a more proactive stance on technology investment. The Deloitte Growth Enterprise Services’ survey “Disruption in the Mid-market: How Technology Is Fueling Growth” concludes that for mid-market firms willing and able to invest in technology, the primary motivator, above costsavings and meeting customer requirements, is the pursuit of greater profits. “The technology trends point to the middle market’s acceptance of technology as a differentiator, much more so than just an investment,” says Deloitte National Managing Partner Roger Nanney. “By and large, the middle market is determined to apply a host of leading-edge technologies to better engage with their customers (Deloitte Insights).” As greater numbers of mid-market companies make this shift in perspective, technology upgrades will progressively become a continuous business practice, rather than a periodic and reactive area of investment. Given the

nature of technology evolution, the industry should expect this cycle to continue into the unforeseeable future. The expanding trend toward modernization substantially impacts staffing requirements and hiring. Companies will continue to seek niche specialists with relevant and current expertise on technology advances. The integration of digital business processes means companies need technically savvy employees with skillsets that include the ability to automate financial processes, strong proficiency with information technology, and understanding of mobile applications and how they integrate with accounting and finance processes. System upgrades require people with implementation experience as well as the ability to produce and interpret ERP reports and formulate key recommendations based on that analysis. Effective management of Big Data demands a workforce capable of reviewing data for trends, analyzing the information and providing relevant advice to support key business decisions.

G LO BALI ZATIO N Global expansion and the ease of doing international business carry significant implications for the accounting and finance profession. Southern US markets, for example, continue to see expansion into the Latin American market, driving moves to consolidate and transition to centralized functions. And while geographic proximity may encourage globalization, the further the industry advances into digital business practices, the less geography will matter with the transition to cloud-based, borderless practices. Consider the now common scenario of colleagues in New York holding a business meeting with associates in Singapore; remote-work capability offers both convenience and flexibility, as well as an expectation for realtime, data-on-demand accounting and financial services. With globalization a foremost corporate focus, companies still rooted in decentralized practices are compelled to make dramatic transitions. A major Aerotek client, for example, had long been doing

business with 26 different international markets and a traditionally decentralized accounting and finance model, using 26 accounting teams, each with their own ERP. Account Manager Paul Koch noted that when a new CEO took the reins a few years ago and made “globalization” a top priority, “the company had to bring in fresh eyes to evaluate and document processes, make recommendations, and implement changes in order to move to a shared service function.” This kind of expansion in international collaboration forces companies to consider a host of complex issues, including consolidation and regulation, International Financial Reporting Standards (IFRS), taxes, contracting, and overseas accounting processes, as well as ensuring their workforce is prepared for a movement that is less of a trend and more a given for the future of business practices. Globalization initiatives drive a requirement for candidates with a centralized skillset and experience with shared service centers. To

help companies navigate the global playing field, such candidates also need a less tangible, more intrinsic set of skills, including the ability to foster progress within and across teams, a level of innovation and flexibility, and a degree of cultural literacy that facilitates collaboration across borders, both literal and figurative. Source: http://www.doksinet SUCCESSI ON PLA N N I N G Succession issues will continue to significantly influence industry requirements. Those companies existing with legacy systems out of a persisting sense of caution from the recession years must now evolve; the status quo will no longer keep them competitive. Joseph Tarasco, President of Accountants Advisory Group, predicts, “the firms who have grown through the consolidation of aging practices will begin to deal with intensified succession issues. This will fuel more mergers of mega-firms into larger firms (qtd in Prince).” Shifting workforce demographics will persist in generating complex

succession issues. More firms are seeing Baby Boomer-generation partners move on to retirement, creating significant executive-level vacancies and a crucial need for succession planning to ensure continuity of operations in the wake of departing senior knowledge and expertise. Additionally, retiring owners of small and mid-size businesses are seeking proactive accounting services to ensure a seamless transition. These business owners often collaborate with a team of professionals to strategize their exit plan, and they look to accountants to take a key leadership role on that team. “CPAs must realize they need some education on how to be [the] quarterback,” says Barry Goodman, Managing Director of Birkdale Transition Partners in Chicago. “They have to know who the players are and how it all comes together. If they can’t do that, they will be doing their clients a big disservice (Goodman, qtd in Miller).” The industry continues to consider Mergers and Acquisitions an appealing

option for managing such succession challenges. Aston Carter Senior Vice President Bob Antiss commented, “More and more, we are seeing companies look at selling or merging with larger firms as a smart, strategic business decision.” As succession planning continues to drive an increase in Mergers and Acquisitions, shifting workforce dynamics will remain a key factor influencing staffing requirements, as larger firms seek mid-level talent with the potential to step up and fill the knowledge void left by departing executives, which subsequently creates vacancies at the mid-management level, resulting in a domino effect for staffing. Companies will likely look in-house first for employees who can be groomed for positions of greater responsibility. But if those individuals aren’t readily available, they may have to search the market for the right candidate. This same dynamic creating staffing challenges is simultaneously forging staffing opportunities. In the small and middle-market,

for example, retiring business owners specifically need accountants with the ability to strategize and lead exit planning. And as businesses increasingly opt for Mergers and Acquisitions to address succession issues, they require skilled talent to implement the resulting restructure and reorganization. With the industry in such a state of transformation, companies may feel as if they’re operating primarily in reactive mode. Joann Barry, executive director of the New York State Society of CPAs, recently reflected on the profession’s rapidly changing landscape. “The firms that are succeeding are making their moves on a chessboardif you’re a good chess player, you’re always anticipating the next two or three moves. Those next two or three moves aren’t going to happen in the next two or three years. They’re going to happen within the next two or three months (qtd in Cohn).” While the accounting and finance profession of past years has been accustomed to a relatively static

set of practices, the insurgence of modernized processes and adaptations for today’s market conditions reflect a far greater degree of variability. Companies able to strategize accordingly will likely experience the greatest progression in this climate of continuous change. D EVELOPMEN T O F N E W CO R E CO MP E TENC I ES If conservatism has in some ways slowed industry progression, on the aggressive end of the spectrum, companies more adept at anticipating and better able to invest in modernization are exercising strategies to position themselves as “future-ready” firms. In seeking to develop “future readiness,” the industry has specifically identified “anticipation” as a core competency. And it has taken steps to promote tools to help its professionals develop this fundamental capability. For example, the recently launched E-learning system “The Anticipatory Organization™: Accounting and Finance Edition,” offered by The Business Learning Institute, promotes the

learning of anticipation as a critical skill, with the objective of “[showing] CPAs and finance executives how to become more future-ready at a time when that skill is in greater demand than ever.” The system has earned strong industry endorsements. Its creator, Daniel Burrus, asserts “the ability to accurately predict future trends and new opportunities is the greatest missing Source: http://www.doksinet competency in the business world todayinstead of trying to meet your customers’ traditional expectations, you could predict their biggest future problems and help solve them (qtd in PR Web, Business Learning Institute).” These industry initiatives reflect a refreshing degree of innovation, but it would be premature to assess the effectiveness of such tools. The Top 50 CPA firm HORNE LLP recently announced it became the nation’s first accounting firm to launch the “Anticipatory Organization: Finance and Accounting Edition” for training staff to “be relevant and to

make a difference by boldly helping customers understand what is possible or needed before they need it – and provide them with a solution at just the right time (PR Web).” HORNE LLP may be the first, but the industry can expect to see more firms seeking to close the gap between recognizing the need to become future-ready and their actual abilities as such. Once the profession assesses the effectiveness of such learning programs, the profession can expect development of additional tools with similar ambitious goals toward building anticipation as a core competency. The resulting impact of current and emerging trends on hiring and staffing continues to be significant. Industry movement over the past five years has inspired identification of a more dynamic set of core competencies for accounting and finance professionals. According to the American Institute of CPAs (AICPA) “CPA Horizons 2025 Report,” a focused six-month study and survey of 5,600 accounting and finance

professionals predicted the Core Services of the profession will continue to evolve over the next 15 years. The study suggests corresponding core competencies will need to mature into “a unique combination of human skills, knowledge and technology that provides value and results to the user,” a skillset that includes leadership aptitude and a collaborative mindset, critical-thinking and the ability to anticipate and respond to rapidly evolving requirements, and the ability to analyze data and provide insightful recommendations to facilitate business decisions. THE SEARCH F O R TA LE N T Compensation figures for the profession remain positive, The current and emerging trends in the accounting and finance with modest but steady increases over the past several years. profession are deeply interconnected, and much like the chess According to the Bureau of Labor game JoAnn Barry spoke of, a change Statistics (BLS), the annual mean in the position of one piece impacts the ANNUAL MEAN

WAGE FOR THE wage for the Accountant and Auditor entire board. Complex and unpredictable ACCOUNTANT AND AUDITOR occupational field as of May 2015 was as this landscape seems, it presents both OCCUPATIONAL FIELD $75,280. The top paying markets are unique challenges and considerable concentrated on the east coast, with the fortuities. Technology upgrades, proactive New York metropolitan area and the management of Big Data and the District of Columbia tipping the scales expansion of global business increase at annual mean wages of $96,570 and expectations for on-demand, real-time $93,000 respectively, followed by New accounting services. They also drive up Jersey, and Massachusetts falling in demand for talent with specialized skills, in NEW YORK $80,000-$90,000 range. Nationwide, particular within the contingent workforce salaries were expected to continue rising sector, with the industry seeing steadily into 2016 by about 5 percent, with the rising use of contract and consultant biggest

increases based on demand professionals. Yet this growing demand DISTRICT OF COLUMBIA anticipated in Utah, Texas, and Georgia for talent reveals a substantial gap in an (EMSI). industry faced with inadequate numbers of professionals to meet today’s dynamic market requirements. For financial professionals, increase in compensation also aligned with overall industry growth; according to the 2015 This gap between what the industry needs and what is actually Association for Financial Professionals (AFP) Compensation available has created its own trend, one where a simple supply Survey, financial professionals saw a 4.1 percent gain in salary in and demand economics lesson reveals a significant deficit 2014 (up from 3.8 percent the previous year), with bonuses also in talent influenced by a host of contributing factors. In the a factor as “on average, financial professionals received bonuses search for quality talent, companies must navigate an extremely tight labor market hallmarked by

healthy compensation, low equivalent to 18 percent of their 2014 base salary.” unemployment and steadily increasing hiring rates. $75,280 $96,570 $93,000 Source: http://www.doksinet Employment rates remain promising for job seekers as well. According to the BLS, in 2015 the national unemployment rate dropped to 5.1 percent, its lowest since 2008, and for the accounting and finance industry those figures were even lower, at just 2.4 percent The outlook for the next decade is in keeping with positive projections for the overall economy. For example, hiring of accountants and auditors is projected to add 166,700 jobs at 13 percent growth from 2012-2022, which is slightly ahead of the 11 percent projected increase Hiring of for all occupations. For financial analysts, accountants projected growth and auditors is in hiring was even projected to add greater, at 16 percent. For personal financial 166,700 jobs advisors, anticipated at 13% growth growth surged to a from 2012-2022

remarkable 27 percent, thanks to continued economic recovery and a generation of Baby Boomers seeking professional advice for retirement planning. For those positions requiring more traditional accounting core skills, new graduates entering the job market have found hiring up 7 percent in the past two years, with rates expected to increase in the coming years. Additionally, steady enrollment rates in accounting education programs persevere. The AICPA’s “2015 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits” found enrollment in accounting programs for the past two academic years was at a record high and anticipated to grow in the years to follow (Vien). While increased enrollment offers the promise of new talent, today’s students are several years out from entering the workforce; once they emerge with freshly minted degrees in hand, they lack the experience required to fill the most indemand positions. That ideal candidate typically has

five to 10 years of experience, often from training on the job and building expertise in implementations, system and process upgrades, and centralization. Candidates, however, may be unaware of how their unique experience fills certain skillset requirements and unsure of how to market themselves for specialized, high-demand positions, making it even more difficult to match talent to vacancies. The top echelon of the talent pool is both specialized and diversified, with the ability to fill a number of niche specialist roles as well as engage critical thinking and analytic skills to provide those proactive services the market is coveting. Those candidates exist, but their numbers are especially limited; finding and matching them to the right position requires extensive insight and diligence. Couple these tight market conditions with a tendency for accounting professionals (especially the growing cohort of Millennials filling today’s positions) to move frequently from company to

company, and firms are finding it extremely challenging to find the “right candidate” to fill positions. As companies increasingly realize the impact of this talent deficit, the profession finds itself entrenched in the battleground of the war for talent. UNDERSTAN DI N G T H E CUR R E NT L A BO R MA R K E T With the limited supply of specialized talent, high employability of entry-level talent and positive employment projections for the next decade, the current accounting and finance job market has shifted decidedly in favor of the job seeker. Candidates regularly receive multiple calls from recruiters, are increasingly expecting a “good sell” from prospective employers and are demanding speed to market. Aerotek Account Manager Aaron Francis commented that over the last six months, he has seen a staffing situation that is 180 degrees out from the market of two-three years ago. Francis indicated that many clients haven’t fully realized the degree of change in the talent

pool. “Many companies are still living in 2011; they think this is still an employers marketthey’re lagging behind.” Such companies are at the greatest risk of losing opportunities to acquire top talent when it’s available. And while the metaphorical labeling of the current job market as a battlefield may seem dramatic, companies with a firm grasp of market conditions and the willingness to respond accordingly will best position themselves to edge out competitors when seeking quality talent. Source: http://www.doksinet CONCLUSION With initiatives for modernization of the profession solidly underway and expanding, the war for talent has become its own trend, one as interconnected as the moves toward technology upgrades, globalization, and development of new core competencies. Those companies able to acquire top talent to meet current and emerging requirements will reap the greatest payoff from this investment in their workforce. Companies engaged in fully understanding and

arming themselves to navigate today’s tight labor market will be able to make themselves as competitive as possible in the search for talent. The industry’s drive to become more proactive and embrace anticipation as a foundation of the profession should include a strategic plan for staffing as an important part of the movement toward future-readiness. Go to www.astoncartercom for more information, or click here to find a job candidate now! ABOUT ASTON CARTER Aston Carter is a distinguished global provider of recruitment and staffing services to companies requiring highly specialized business professionals. We have an unrivaled commitment to delivering first class service to clients and business professionals across a variety of disciplines, including Accounting and Finance as well as Governance, Risk and Compliance. With more than 60 offices across Europe, Asia Pacific and North America, Aston Carter provides local, regional and global expertise to drive value and meet our

customers’ unique needs. Aston Carter is a division of Aerotek. Aerotek is an operating company of Allegis Group, a global talent solutions provider Source: http://www.doksinet BIB LI OG RAPHY Accounting Today.com (2015) “10 Great Trends for CPAs” Retrieved 16 October 2015, from http://www.accountingtodaycom/gallery/photos/10-great-trends-for-cpas-75556-1html American Institute of CPAs (AICPA) (2015). “CPA Horizons 2025 Report” Retrieved 20 October 2015, from http://www.aicpaorg/Research/CPAHorizons2025/DownloadableDocuments/cpa-horizons-report-webpdf Association of Financial Professionals (AFP) (2015). “2015 AFP Compensation Survey” Retrieved 16 October 2015, from http://www.afponlineorg/CompReport/ Bureau of Labor Statistics (May 2015). Occupational Employment Statistics Retrieved 6 April 2016 from http://wwwblsgov/oes/current/oes132011htm#st Bureau of Labor Statistics (2014). 2014-2015 Occupational Outlook Handbook Retrieved 15 October 2015, from

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Miller, Scott. (1 October 2015) Journal of Accountancy “Succession planning and CPAs’ golden opportunity” Retrieved 8 November 2015, from http://www.journalofaccountancycom/issues/2015/oct/succession-planning-cpahtml Vien, Courtney (1 October 2015). Journal of Accountancy “Hiring at public accounting firms hits all time high” Retrieved 18 October 2015, from http://www.journalofaccountancycom/issues/2015/oct/cpa-jobs-public-accountinghtml#sthashJwHDSbrudpuf