I just watched the trailer of the new(ish) film, The Current War, about the battle between Thomas Edison, George Westinghouse, and Nikola Tesla to bring electricity to America during the Second Industrial Revolution. This made me think of the Fourth Industrial Revolution in which we find ourselves, and our place as accountants in it.
We all know that the world is changing rapidly – not only when it comes to technology, but also politically, and in terms of society’s expectations – and you’re probably already aware that these changes are going to make a huge impact on how you do business and your role as an accountant and advisor in the business environment.
I recently got my hands on a report from the ACCA about the skills that accountants will need in future, and why.
Apart from the technical skills we’re all familiar with, the ACCA reckons that there are other attributes we’ll need to master if we want to be successful in future. They call these the ‘7 Professional Quotients’.
According to the report, the most important factors driving these changes are:
- Business trends
- Science and technology
- Society’s expectations of business
If we want to keep on adding value to our clients (or employers, if you work for a boss), you’ll need a combination of professional competencies:
- technical knowledge, skills and abilities (the old stuff we’re all familiar with), combined with
- interpersonal behaviours and qualities.
If you’re interested in reading the full report, you can find it here: Professional accountants – the future: Drivers of change and future skills.
So, let’s have a look at these seven professional quotients.
Introducing ACCA’s 7 Professional Quotients
1. Technical Skills and Ethics
In the centre, technical skills and ethical behaviour are highlighted. Without the proper technical skills, you simply cannot perform your job, right? And as for ethics – integrity, independence, and professional scepticism – we know how important this is to our profession, especially now when confidence in the government, big corporations, banks, the media, etc are pretty low, not to mention the recent scandals across the world that accountants have been involved in.
Intelligence is about applying your knowledge to situations, and using thinking and reasoning to solve problems. It includes the ability to understand and analyse situations that are complex and not black-and-white.
Intelligence is one of the traits that we as humans have that will be very difficult for machines to replace, and it is something that we can constantly develop as the world is changing and progressing.
Creativity in business does not mean that you need to be able to paint a masterpiece like a Van Gogh. Rather, it refers to creative thinking. It’s about generating new ideas, making connections between seemingly unrelated stuff, and exploring different options. It’s about strategising and solving business problems.
I often hear accountants say something like “I don’t have a creative bone in my body”. To them, I say: creativity can be developed. Read this blog on how you can cultivate your creativity even if you’re creatively-impaired.
I’m sure the digital quotient doesn’t come as a surprise to you. If it does, then you’d better get out from under that rock where you’ve been hiding all this time.
Now again, you don’t need to be a tech buff, but you should be aware of the changes affecting our industry and business in general. Use this knowledge to adopt technologies that can make a process faster or more streamlined, or help you to provide a better service to your clients, like up-to-date reporting from cloud tools.
5. Emotional Intelligence
Emotional intelligence is all about managing your emotions and that of others. This is where communication skills come in – both inside the firm, with clients, and with external parties. Managing multicultural teams is a big thing, especially if you outsource tasks to people in other countries.
According to the ACCA report, this is one of the skills that most accountants, especially newly-qualified accountants, struggle with.
Vision is all about thinking innovatively about solving future problems. It’s about analysing trends and leaning on your experience to envisage the changes we can expect in business and your (or that of your clients) industry, and to shape business practices around those changes. And also, to be at the forefront of that change.
This is an important skill to have not only when advising clients, but also in your own business, and that’s exactly where I want to get to in this article.
We’re all constantly gaining experience – that’s part of the job. But this quotient is about applying your experience to your client’s scenarios to create value for them. It also applies to accelerating your experience as much as it is in your power to do. The way to accelerate your experience is by interacting with real-world scenarios (obviously) and also through research, asking questions, and being curious. It’s also about not being afraid of making mistakes, and then dissecting and learning from those mistakes.
The ACCA has developed a nifty quiz which you can take to find out how your professional quotient skills measure up. You can take the quiz here.
Applying the 7 Quotients to Technical Skills
The report then goes on to explain how these quotients can be applied to each of the technical skills, which include areas like:
- Audit and assurance
- Corporate reporting
- Financial management
- Strategic planning and performance management
- Governance, risk, ethics
I’m not going to go into each of them, otherwise you’ll sit here reading for the next two days. If you want more information, check out the full report here: Professional accountants – the future: Drivers of change and future skills.
Our Role as Advisors
Where our role as accountants and advisors has been more of a backwards-looking function in the past, we need to change to a more forward-looking focus to support our clients so that they are able to make faster and smarter decisions with real-time insights. We need to look beyond just the finance function and start thinking more strategically.
“Professional accountants need to step up and become more involved in decision-making. By combining their technical expertise with business awareness, tactical and strategic thinking, resource management capabilities, communications and interpersonal skills, finance professionals can drive and shape opinion, decision-making and action, instead of being implementers or merely analysing the past.” – ACCA
I’m sure this is not news for you, but let’s look at a few specific areas where we may still lack the necessary skills listed in this ACCA report, and what we can do about it.
Accounting and other complementary cloud apps are shaping how we help our clients. Accounting apps are getting simpler and quicker to use, and are accessible from anywhere at any time, which makes it extremely easy to keep your clients’ books up-to-date, and of course, help them to make smarter decisions with real-time information.
Additionally, many transactions can now be automated, and smarter technology is able to perform more complex tasks. One example of this is Xero’s machine learning capabilities (read this blog if you want to learn more about machine learning) which is replacing many of the tasks that were historically done by accountants and bookkeepers. If your firm still operates primarily with a bunch of clerks who perform tasks that can now be automated, your firm’s survival is in danger.
As mentioned before, the ability to communicate with all levels and stakeholders and develop lasting relationships is one of the skills many accountants struggle with.
If you can’t articulate what you mean clearly and plainly (without jargon), your great insights and ideas will fall on deaf ears. How can you help your clients’ businesses to perform at their best if you can’t explain to them what their numbers mean, what they need to change, and why?
Another skill highlighted in the ACCA report is around HR. The way we interact with our staff is changing as many professionals may want to work from home or on a freelance basis, while you may also want to outsource lower-level transaction work to off-shore accountants. Managing these virtual and multi-cultural relationships can be quite challenging.
Additionally, many tasks typically performed by mid-tier professionals can be (or will soon be) replaced by technology. This disrupts the traditional routes of career progression, and you should think about how you can still help your staff to up their skills to get to the next level.
Lastly, the report mentions about the accountant’s ability to take an outward-looking perspective that goes beyond the numbers, or in other words, to take a more holistic view of business.
These include things like developing a basic knowledge of brand management and marketing, and keeping abreast of local and global developments, including digital tech, law, and politics. Additionally, we should explore other opportunities and think innovatively about how our clients can exploit technology for process improvements and prepare for the challenges and risks these may pose for established business models.
Now, some accountants they interviewed when putting this report together felt that there was a danger in extending their role beyond those areas where they are comfortable and confident. And I agree with this – to an extent. We’ll discuss this more below.
Branching out or Specialising?
There are a lot of ways you can interpret this information. And how you decide to adjust your service offerings and improve your skills will differ from others.
You may also feel a bit overwhelmed with all this information and the expectation that you should add these additional skills to your portfolio. If you don’t already feel this way, you probably will after reading the whole report.
I want to get back to the previous section where I mentioned that some accountants have expressed concern about adding a bunch of skills and services to their repertoire that they do not feel confident and comfortable adding.
I do agree that you need to be aware of changes in the industry, have a good overall understanding of business, use technology where you can, and develop your soft skills.
But, if you’ve been following my emails and posts, you’ll know that I suggest the opposite – that you should become really good at one thing, maybe two, instead of trying to do all the things. You simply can’t be good at everything.
The word we’re looking for here is ‘specialisation’.
Re-Imagine Your Accounting Firm
Over the past few years, and especially the last few months, I’ve done my own (informal) research and talked to a lot of accountants. This what I have heard over and over again:
- They’re excited about the technological advancements, but they’re not sure how to restructure their firm to take advantage of this to stay relevant.
- They’re tired of working with the wrong (low-paying, high-maintenance) clients.
- They want to structure their firm around their strengths and what they love doing, but they have no idea how to go about doing this.
- Some have aspirations of writing books and talking on stage.
- Others want to work fewer hours a day so that they can travel or raise their kids while working from home.
- They know that their current business model isn’t working as effectively anymore, but the information they find online or what they hear from the stage at industry events doesn’t really help them to figure out how to do things differently.
So, this brings us to my announcement – one I’ve hinted at before. I am pivoting The Creative Accountant around the theme of ‘Re-imagine’:
Re-imagine your firm in a changing world: Create the firm you want, that fits around your strengths, goals, and lifestyle, without becoming obsolete.
My goal is to help you to carve your own path, while taking changes in the industry and business environment into account, and also what your clients want and need. I want to help you to tap into your tremendous expertise, experience, and skills, and start to make money in ways you may not have thought of previously.
(According to ACCA’s quiz, I’m pretty good with the quotients ‘creative’ and ‘vision’. So if that is your kryptonite, then stick around, because I’m going to help you to develop those skills and apply them to your firm.)
And if you’re wondering how marketing and branding fit into this picture – which is probably how you found me – this will still be a big part of the firm you aim to create. Your brand is at the core of everything, and if your marketing sucks, then it doesn’t matter how cool the firm you have envisioned is, because no-one is going to notice you.
So, are you ready to be at the forefront of the change that is coming, and that is already happening? If so, I’d love your input to help me shape the content I’m developing around this theme. I’ve done a lot of research, developing ideas with other professionals, and testing processes in the past few months, but now I’d like to hear from you. Because, after all, this is for you, not (only) for my own enjoyment.
What do you think we need to prepare for? How do you think you should re-imagine your firm? What is it that you’d like to learn to make sure you don’t become obsolete? Please complete this survey:
And, if you’re not yet on my email list, make sure you subscribe below so you can be the first to receive the new content I’m developing!