– The most precious task for accountants is to ensure a financial foundation for companies. Accountants must prove their services and value creation and make it visible. The auditor’s report constitutes that companies and banks are aware that their financial statements comply with generally accepted accounting principles. A blank endorsement from the accountant ensures that companies are able to function.
This is the sturdy statement from Lone Strøm, CEO, FSR - Danish Accountants.
She holds a Master’s Degree in Business Economics and Auditing, and her CV carries titles such as Director and CEO in companies such as the Danish Financial Supervisory Authority, the Agency for Public Finance and Management and The Agency for Governmental IT Services. Lone Strøm even carries the title as former auditor general. Today, she is driven by an ambition to make the accounting industry a prerogative.
– Accountants are the preferred advisor for companies. It has always been like that. Accountants work closely with businesses when it comes to making critical business decisions. But the role as preferred advisor is undergoing drastic changes as a result of the increased digitalization, Lone Strøm explains.
She points out manual processes being replaced by more efficient and valuable processes as the reason, which increases the value for the clients. Through these processes, digitalization works to remove tedious, manual tasks such as validating expenses and receipts. Hereby the tasks of an accountant, such as analyzing data, are moving to next level in the value chain.
– Navigating digitally has become second nature to us. We are far ahead in the digitalization in Denmark, compared to i.e. Germany, where the infrastructure speaks a different language. We are experiencing a development that introduces more digital tools everyday, and where data in real time flows effortless and unhindered. This provides amazing opportunities to the accounting industry and its clients, Lone Strøm explains and continues:
– At the same time, this leaves new requirements to the data quality. Is the data correct? With all the available data of today new, specialized resources are needed to analyze and validate data. This should be a main focus for many accountants because they may create value and make a change. This means an increased focus on present, involved counseling of the companies and other users of financial data.
Lone Strøm emphasizes the importance that accountants must keep up with and support the digital development and use the available tools within their field. Adopting a future proof mindset that stays on top of the new digital solutions is key if accountants wish to maintain their role as preferred advisor, she underlines:
– If a company is shut down due to a security breach, and is not able to invoice, it becomes a critical issue, as the company is not able to make a profit and pay salaries. These factors are all inextricably linked today. In the past, IT was an option but today it has become the brain and heart of an entire company. As an accountant you must understand the urgence and also apply the skillset to act accordingly.
Jump on the bandwagon or get left behind?
According to Lone Strøm, accountants must look both inwards and outwards and keep their clients in mind to truly grasp what digitalization means to the industry.
– Looking inwards means preparing yourself for digitalization. Optimizing the workflow and work tasks. Dealing with physical receipts will be a task of the past. Everything is going digital. This means that you can make analyses based on the data your client provides, and at the same time optimize your workflows based on data. This is also what the new Bookkeeping Act sets out for – an optimized and streamlined system. That is why it’s an absolute must that accountants continuously develop themselves, make use of the smart solutions around them, and become even more skilled at conducting data analyses, Lone Strøm states.
On the contrary, looking outwards means adapting the work tasks to what the clients need, ensuring that accountants maximize their value proposition as a result of the opportunities brought to the table by digitalization.
– If you wish to offer thorough counseling, you must educate yourself to help your clients adapt to the digitalization. This requires knowledge about how data is born as well as understanding the cyber security issue. The latter is particularly important as a security question for both small and medium sized companies. I am not saying that accountants must be cybersecurity experts but they need to be aware of risks and pitfalls and discuss them with their clients. Worst case scenario this matter can turn into a real problem for the business. We find ourselves vulnerable in a time when data "flows" between us - accountants must also take this into account in their counseling if they want to create extra value, Lone Strøm says.
Call your accountant
If we are to optimize our collaboration not only the accountant must take a stance. As a company you hold responsibility for following up with your accountant, Lone Strøm underlines.
– It goes without being said that if accountants frequently meet with their clients they are bound to build a closer relationship, hence the better advice. It’s not about building a friendship with your client, as there is still a relationship of independence that needs to be taken care of. Companies hold part of the responsibility of checking in with their accountants more than once a year. If they wish to benefit from counseling regular check-ins and meetings with the accountant should be part of the regular work tasks of running the company. If the meeting only takes place once a year by the end of the year, it’s too late. Call your accountant as you go, and before the issues become too complex and unmanageable.
Although ‘calling your advisor’ has a price, it’s worth the money if companies get the adequate counseling in time as they avoid running into large issues that can’t be solved, Lone Strøm states:
– We must move away from the idea that the accounting industry is a necessary evil. It’s not just about accountants granting their clients the needed stamp of approval, but about adding extra value to the collaboration. I hear a lot of our members saying: “We truly wish to add value to our clients.”
More on this story: Your decisions are only as good as your data
The agenda of tomorrow for the industry
On the agenda, words such as ‘attracting talent’ and ‘sustainability’ are top funnel. Two large themes that take up a lot of capacity and thought within the accounting industry. It relates to employer and industry branding as well as how organizations can create the best foundation to meet the new requirements of legislation.
– Sustainability reporting is becoming a crucial task due to the new EU directive (CSRD) and the political agenda. Financial data remains important, but the other agenda becomes just as important. Society as a whole depends on adapting to the idea of sustainability. Here, the accountant has a leading role in helping companies with reporting, Lone Strøm says and continues:
– As an organization we must help our members prepare for the change. It’s our job to help our members prepare for the changes. After all, this is basically the most important task of an interest group. We need to stay ahead of the industry, so we can lead the way. We need a seat at the table to get input from key actors for us to guide and path the way for change.
In addition to setting the framework for the implementation of comprehensive legislation, the organization also needs to think of the profession's actual image – what does it mean to be an accountant in 2022?
– We must ask ourselves: How can we make it even more attractive and “sexy” to be an accountant? Somehow, the overall image of an accountant is equal to boring. I hear it way often and even use this framing myself from time to time. However, to change this predicate we need to make the profession more attractive, Lone Strøm explains and continues:
– We also need to look at the way people entrance the profession and how gender is distributed across the trade. If we look at the number of students across the Master’s programme of Science in Business Economics and Auditing, gender is not an equally distributed factor. Women tend to quit the programme sooner. In general the distribution sounds: 60% men vs. 40% women. But men are not by nature better accountants than women. It’s about fundamental changes of culture and the notion of accounting being a male dominated profession. We are acutely aware of this and are highly focus on changing this, and will be running several analyses over the next couple of years. We must be able to attract talent to maintain the value creation and optimize the essential system that exists between accountants, businesses and banks.