When it comes to choosing a career in accounting, the numbers no longer add up.
That’s because, from corporate finance departments to CPA (certified public accountant) prep courses, finance functions across America are suffering from an ongoing attrition of their most seasoned team members while the accounting profession as a whole is failing to replace them by drawing in the next generation of workers.
In 2023 alone, over 720 companies cited insufficient staffing levels across key financial and accounting departments and noted that the lack of help meant there could be potential errors in their reporting, per a March report from Bloomberg.
And the situation is only more dire for smaller businesses where the loss of even one accountant is felt much more sharply across finance teams.
Observers believe the amount of time and effort required to pass the CPA exam, combined with a relatively stale level of income growth for entry-level positions, is having a ruinous impact on Generation Z’s accounting ambitions — particularly when they look at the starting salary for Wall Street and Silicon Valley roles.
But as the reality of scarce labor resources settles in for firms’ accounting departments, a surprising solution could be on the horizon — embracing automation and investing in innovation, including artificial intelligence (AI).
Read also: How AI Co-Pilots Can Future-Proof the CFO Office
There is a critical need for innovative solutions to bridge the gap between the demand for accounting services and the available workforce.
The emergence of sophisticated tools and digital technologies has been revolutionizing finance operations over the past several years, as PYMNTS has been reporting. Automation, data analytics and AI are increasingly combining to enable modern CFOs to streamline existing processes, gain deeper insights from cross-departmental information centers and make data-driven decisions in real time and with greater efficiency.
And these benefits are trickling down all the way to junior staff members.
“AI and ML are transforming everything treasury, it’s the equivalent of the Industrial Revolution 4.0,” Jarrett Bruhn, managing director and head of data and AI in global transaction services at Bank of America, told PYMNTS. “When you think of what a treasurer does, trying to find operational and cost efficiencies, these tools and technologies fundamentally change how they can do their daily job.”
The integration of AI into accounting processes offers several benefits. For one, it allows firms to handle a larger volume of work without the need to proportionally increase their staff. This is particularly beneficial in the context of the current professional shortage. Additionally, AI can perform tasks with a high degree of accuracy and at a speed that far surpasses human capability, thereby reducing the likelihood of errors and increasing overall efficiency.
When it comes to leveraging innovation for enterprise growth, as Amy Wang, CFO at Procurify, told PYMNTS, “it’s still building out for scale, but instead of scaling with headcount, which we’ve traditionally been doing as a finance organization, it’s scaling with technology and leaning into automation.”
Read more: 2024 Is the Year Businesses Put Technical Debt to Bed
As AI takes over more routine tasks, the role of accountants is evolving. Professionals are now expected to focus more on analytical and advisory roles, leveraging the data processed by AI to provide strategic insights to businesses.
“Turning to automation transformed our finance department,” LiquidX CFO Abhishek Khandelwal told PYMNTS. “Things that used to take hours, for example analysts spending around 80% of their time pulling data and not analyzing it, are much more streamlined. It has totally transformed jobs, freeing up valuable time for more strategic exercises.”
Looking ahead, Khandelwal noted that considering advances in AI capabilities, “reporting through an Excel spreadsheet or a PDF document or even a dashboard is going to be outdated. People will have access to real-time data through a gen AI interface. They can type in any question that they want and get an answer right away. … If you want to retain good talent in today’s environment, you cannot give them something to do that is, for lack of a better word, boring.”
This shift requires accountants to develop new skills, including data analysis and interpretation, as well as a deeper understanding of AI technologies and their applications in accounting.
“The finance function has been dealing with AI for some time. I don’t want to say we’re the tip of the spear on this, but tools such as expense management tools in the accounting function [have long been built on AI],” Jim Sparks, CFO at Kalderos, told PYMNTS. “In a perfect world, I think artificial intelligence won’t replace humans, but it will make humans more effective by unlocking insights and making projections more accurate.”
That’s why it remains critical to keep a human in the loop. After all, AI tools merely surface relevant information at-scale and at-speed. It is up to human accounting and finance leaders to decide what to do with that information and how to act on it in the best interests of their business.
For further reading, PYMNTS Intelligence in the report “Navigating The Unexpected: Developing A Long-Term Treasury And Trade Risk Strategy,” a collaboration with Citi, reveals how treasurers seeking to support their organizations’ growth strategies can plan to manage risk exposure, support growth and implement digital innovations.
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