The accounting industry has changed quite a bit over the past 20 years. While this blanket statement on the past, present and future of accounting may seem like an understatement, sometimes it’s helpful to sit down with someone who has seen the changes in the industry, and get their perspective on where we’ve been and where we’re going.
On this episode of CFO Weekly, we sit down with Glen Parrillo to talk all about the past, present, and future of accounting. Glen is the Vice President of Finance & Controller at AccuWeather, and has seen a lot of the ups and downs in the finance industry, with a large bulk of them occurring in 2020 from the changing role of the finance leader to automation, talent and more. Listen below.
The Role of the CFO & Controller
It’s no surprise to anybody that has spent time in the industry that the roles of Controller and CFO have changed somewhat drastically over the past 10 to 20 years. Today’s Controllers and CFOs don’t look like those from two decades ago.
As recently as the '80s, the controller role used to be a stereotypical one. They saw the world through green glasses. Their job was all about numbers. It was all credits and debits. But as the ’90s went on, a transformation started to occur.
The controller role started to move away from more than just dollar signs. They became far more involved in the business, because so many things were crossing over and cross-pollinating. The Controller had to become more and more involved in business systems, IT and business operations. They’ve become more of strategic thinkers instead of simply being shoved into a corner office to crunch the numbers.
The CFO, specifically in the mid- to large-sized businesses, has seen a drastic shift. In the old days, the CEO would push orders down from the top, and that was the directive. But now, the CFO is right there in the CEO’s hip pocket helping to steer and strategically direct the business.
More and more CFOs across the industry are being promoted to CEO. Twenty years ago, the CFO and CEO would have been two drastically different career paths, but now those lines are being continually blurred.
“Now more than ever before, the CFO is more than just a financial position. They’re tied to the CEO’s hip more than they’ve ever been in the past," Parrillo said.
Should You Automate Your Accounting Process?
And it’s not just the roles in the industry that are changing. Obviously, technology is moving at a breakneck pace, and one of the things that every industry is looking at is automation. How to automate and simplify some of those time waste tasks.
“I think where a lot of organizations struggle is the assumption that all automation is good automation, and that’s just not the case," Parrillo said.
Automation for the sake of automation is never a good idea. It can be tempting to implement these automation features to “save time.” But what often seems like it may save time can actually incur extra costs, because typically automation comes with IT support requirements.
There are risks in automation, and the bottom line is that if your automation doesn’t drive value, you may want to rethink it. If it doesn't make your system better, leaner, more efficient, and more cost effective, it may not be worth it, and if you can’t scale your automation, it most certainly should make you stop and reconsider.
Before anybody assumes that automation means widespread job replacement, take a moment and breathe. While it may mean the automation of some of the most simple tasks (think accounts payable and receivable,) accounting is still a very human industry. It’s hard to teach a machine how to analyze a report. It’s hard to teach a machine to look at data and interpret that in a meaningful way. Humans are always going to be needed.
Preparing for Accounting Changes in 2021
The most simple piece of advice for finance professionals as we head into 2021 is a simple one: keep focusing on making your organization nimble and flexible. Regardless of a COVID crisis or political unrest, the businesses that are doing well right now are the ones that were able to adapt, flex and re-adjust the way they did business.
Obviously, there are industries that were hit hard and no amount of “readjusting” would have spared them. Restaurants and the hospitality industry were decimated, and “staying flexible” wouldn’t have done a lot in the wake of widespread stay-at-home orders.
Every CFO has to be considering three main components of their business as they head into 2021. The dynamic nature of the industry around them, risk management and talent. If you pay careful attention to all three of these components, you’re setting your organization up for success in 2021, regardless of what may come our way.