Editor’s note: Rho regularly interviews industry experts for their perspectives on corporate finance. Interviews have been edited for length and clarity.
Blake Oliver, CPA, is a leading voice in the accounting profession whose podcast, The Cloud Accounting Podcast, breaks down essential concepts and developments that impact accountants, controllers, and CFOs. We interviewed Blake to assess where accounting technology stands, where it’s heading, and more.
Q&A with Blake Oliver, CPA
Blake, how would you summarize the current state of accounting technology?
It's a mixed bag. We've had a lot of developments in some areas and very little in others. A lot of technology is focused on data entry. If you look at bookkeeping work – like getting the data into the accounting system – 80-90% of that is getting automated. With the right integrations or RPA, transaction entry gets more efficient.
Where we still don't have enough automation is generating more useful financial reporting: forward-looking financials, forecasting, budgeting, and everything that falls under FP&A. That’s an area with a lot of potential to deliver tech that has historically only been available to enterprise-grade companies down to small and midsize businesses.
I recently read a story in Accounting Today from tech writer Chris Gaetano with the headline: “Technology saves time, so why do accountants have less than ever?” With everything happening with accounting automation, what do you think explains this discrepancy?
We haven't been producing enough accountants for decades. The talent pool plateaued and declined. As the economy continues to grow over the long term, there’s this tension where the tech is helping make accountants more productive, but the profession still faces a talent crisis for 20 years. It also takes time for finance teams to learn new technology.
Do you feel that having a forward-thinking approach to technology can make the accounting profession – and finance more generally – more exciting for the next generation?
Yeah, some people are getting into accounting because of that, but the problem starts with accounting education. Traditional accounting professors will tell you to go to the Big 4 in audit or tax. There’s no expanded understanding of the available horizons, especially in fintech and other tech areas.
In a recent LinkedIn post, you said: “If you just want a job, it’s a tough time to be an accountant. But if you’re entrepreneurial, it’s never been a better time to be an accountant.” Can you elaborate on what you meant?
The accounting profession is in a time of disruption. The tools and best practices are changing, so you must learn new things to adjust and succeed. If you are the kind of person who likes to learn new things and enjoys trying to find the opportunity in the disruption, then there is a lot of opportunity for you in the accounting world. Somebody starting a career in accounting that invests time to learn how to use all the new tech coming out – or asks others for help because you won’t learn this in school – has a tremendous opportunity.
Switching gears a bit: As a CPA and someone who has worked with various organizations, how does a company’s approach to accounting and finance processes change as it scales?
I think user experience changes dramatically. You look to improve process efficiency, and many look to technology to help them do that. So, ease of user adoption is important because the political capital you must spend to enact change increases as an organization’s size does. Suppose you’re the controller in a midsize business. In that case, you want to think hard about the technology you introduce – as it is essential to truly scale – but ensure that the experience your end-users see is helpful and minimally disruptive.
Think about how expense reports used to be done, or in some cases, are still done. Someone puts together a bunch of pages that they submit to the finance team, who then spends hours entering the information into the system. In a modern expense management system, you are automating the finance team’s manual tasks so they can focus their attention elsewhere and essentially offload the expense reporting task to your employees. That’s a great productivity gain for your finance team, but you had better also make employee lives easier in the process.
In that same vein, what are the biggest mistakes you feel companies make when automating finances?
The biggest mistake I see is when they automate a bad process. I see things go wrong when leaders don’t first ask themselves if a process – your approach to month-end close, for example – is the right one to have in place before addressing how you can improve its efficiency with technology. Automating a flawed process means you're just doing the wrong thing faster. That's why accountants can't just learn the technologies and accounting. You also have to learn how to consult on business processes.
Blake is a CPA specializing in accounting technology and the co-host of the Cloud Accounting Podcast, the most popular podcast for accountants and bookkeepers. He has twice been to CPA Practice Advisor's “40 Under 40” list and Accounting Today’s “Top 100 Most Influential People” list. He founded Earmark CPE so listeners can earn continuing professional education credits for listening to my shows and many more accounting and tax podcasts.