The world has changed since the 1950s, but you wouldn’t know it by the processes of a typical accounting firm. Most cling happily to antiquated operating procedures, with barely an acknowledgment of the shifting sands of a cultural, social, and workplace revolution brought about, in part, by a wave of top Millennial talent.
Like them, love them, or loathe them, Millennials are a force to be reckoned with, especially for sectors not prepared for disruption — like accounting.
Unlike their predecessors, a vast majority of Millennials take flight when their employers aren’t living up to their high expectations. More than half expect work atmospheres to offer flexibility, enjoyment, camaraderie, and technology. And Millennial accountants faced with antiquated “work is a place, not a thing” fly the coop without hesitation. Case in point: At PricewaterhouseCoopers, a Millennial migration of epic proportions prompted a 2013 investigative study.
PwC responded (eventually) to the earthquake. But most smaller and mid-market accounting companies would rather turn the other way — holding onto reams of paper, eschewing tech advances, working with regional clients representing a wide swath of industries, and offering little autonomy to up-and-comers. This is a surefire path toward self-destruction.
Getting Real About Accounting’s Flaws
Work. Bill. Rinse. Repeat. It’s been the rhythm of accounting firms for ages, and it’s causing yawns among those eager to shake up the status quo.
Yes, all accounting firms say they’re trustworthy advisors, but the truth is that they are actually opaque, profit-incentivized, difficult-to-fathom machines. Junior accountants with little experience are billed out at rates many times their salaries. Firms take on clients without giving clear thought to their particular industries.
Until recently, this lack of transparency hadn’t been apparent to clients who trust local accounting firms with their businesses’ finances. Now, cracks are showing in the foundation. Stories of bad bookkeeping and worse advice are bubbling to the surface; it’s only a matter of time before consumers realize that some accountants are charging thousands of dollars a month for nothing more than bookkeeping services.
Of course, the awakening has progressed slowly among business owners, thanks to accounting’s jargon-laden environment. When you don’t know what words or concepts mean, you’re more apt to become a sucker for scare tactics because you feel like you’re out of your league.
How can you possibly provide oversight or accountability checks if you have little expertise or time to dedicate to the process? Besides, will you know what you’re looking for in the first place if you find something amiss? You could end up with bad financial data and little insight into your business, all while shelling out too much for services.
Millennials may be a lot of things, but they aren’t foolish. Those who are entrepreneurs are starting to seek out better accounting platforms and new tools that will allow them to speed up their accounts receivable, automate invoicing and payment systems, provide online alternative options for short-term loans in cash flow crunches, and more. And Millennial accountants are asking themselves why their industry is so outdated. Very soon, these talented individuals will shake up the sector by offering accounting innovations and genuine customer service.
A collapse is imminent.
Accounting Should Change for Change’s Sake
Accounting firms needn’t change simply because gig economy-minded Millennials are moving into the marketplace. They need to change so they don’t wind up being like traditional hotels in an Airbnb world. No matter what hotels say to the contrary, they’re secretly fighting for their lives. Research from Morgan Stanley suggests Airbnb use is steadily on the rise year after year, and 25 percent of recreational travelers will use this portal in 2017.
Like leaders in the hotel sector clawing to remain relevant, accounting firm owners need to move to a wartime CEO mentality. During a war, CEOs upend culture, fix things without emotion, and explore all their options, including the “unthinkable” ones. Peacetime CEOs, on the contrary, are happy to proceed guided only by self-adjusting blinders. The former will accept — and no doubt lead — disruption. The latter will get left behind, thanks to shortsightedness and a belief that their beloved cash cow will never stop producing.
Sometimes, it takes the proverbial slap in the face to come to our senses. Accountants may relax in cushy margins today, but their relaxed attitudes make them ripe for disruption tomorrow. Millennials and their truly unique perspectives on what work is, should be, and will be are providing a wake-up call across all trades. Those in the accounting and finance worlds would be wise to listen and learn the Millennial mindset.