In the early 2000s, Blockbuster's failure to adapt to the digital era was also a symptom of another issue: its heavy reliance on a human-centric, labor-intensive business model. As the video rental giant continued using a vast workforce shuffling physical media in countless physical stores, others (like Netflix) were shifting to digital streaming and online content delivery. By not embracing this shift, Blockbuster misjudged consumer trends but also stubbornly adhered to an outdated, highly manual business model. Ultimately, it couldn't compete with media companies that offered more streamlined, tech-driven services.
Of course, running a DVD video empire is not the same as running a finance or accounting department. However, Blockbuster would — like many finance organizations — have an even bigger problem today: maintaining its workforce. Low unemployment and the exodus of workers from the workforce means it's tough to fill open slots. Blockbuster's stores would be seriously short-shifted. But so would its corporate departments such as technology and (you guessed it) accounting. In fact, with high turnover and fewer professionals entering the field,
While the challenges of corporate accounting teams aren't the same as Blockbuster's, they can still learn a lesson or two from the latter's resistance to adapting their businesses to a more digital era. How can applying technology help address the talent gap facing today's CFOs and accounting managers?
Automating routine tasks: the most visible "more-with-less" benefit
Accounting departments have used software for decades, so it's not like using tech is totally foreign. However, these teams have tended to be a latecomer to task automation, a technology increasingly adopted in other departments and most industries. Perhaps the most obvious application of technology in finance would be to use software to automate routine tasks that are repeatable yet tedious and labor-intensive. By pulling people out of a process where many or all of the steps are manual and repetitive — for example, digitally receiving invoices and inputting them into your internal systems — you can do more work with fewer people.
Not only do you get the work done more accurately in a fraction of the time, but you remove the tedium and pain for the staff that otherwise would have to do it manually. Plus, it also benefits your suppliers (their invoices get paid on time automatically) and your customers (by ensuring the accuracy of their orders and payment processing).
To get started, identify repetitive tasks in your processes such as data entry, reconciliation and invoice processing that are suitable for automation. Start with a pilot program, picking one process to automate — say scanning vendor invoices into your systems. You should carefully select an RPA tool that integrates well with your existing accounting software. (What good is scanning invoice data if you can't push it into your payables system?) Now, run the test pilot and identify any measurable improvements before expanding the scope.
Going beyond bridging the obvious talent gap
With respect to the talent gap accounting teams face, the most visible benefit of automation technology is to simply reduce the time and resources required to accomplish repeatable tasks. This lessens the need to find and hire additional staff. However, these and other technologies can directly and indirectly address the talent gap in other ways too.
Scaling for growth without adding staff
Most if not all companies plan to grow over time. With manual accounting processes, adding new customers and vendors means you have to expand your team accordingly to handle that growth. But, as the vast majority of CFOs can't find or replace the accounting professionals they need to meet their current needs, that's a difficult problem. You'll either pay top dollar for AP and AR clerks or have to outsource it all, and either avenue quickly becomes expensive. Automation technologies allow you to scale operations along with your growth, so you needn't add staff proportional to support that growth. You do more, with less.
Keeping existing staff engaged
Leveraging automation technology to reduce the time accountants spend on routine tasks also addresses a key reason for turnover in the first place: lack of interesting work and limited career paths. Spending less time on menial tasks allows you to engage the existing team in more satisfying, strategic activities — activities that otherwise would require you to hire even more staff to perform. Think about it: What AP clerk wouldn't jump at the chance to be trained in managing automated tasks instead of doing data entry all day?
Reducing overpayments and fraud (without inflating the team)
Chasing down overpayments and double payments has always been painful and labor-intensive — not to mention trying to retrieve the cash that's already gone from your account. It always costs you money to track down these erroneous payments, and they inevitably affect your cash flow (since most vendors give you credit but do not send you a refund check). With accounts payable automation, duplicate entries of invoices and overpayments can all but vanish — and again, you can redeploy the staff that used to handle these matters to other tasks. And while overpayments are usually accidental, there's always the chance you'll receive a fraudulent invoice. However, with more controls in place in the payables automation, every invoice received can be compared to actual orders placed, so detecting bad invoices needn't be as time-consuming and labor-intensive as before.
Eliminating the need to continuously test the "cookbook"
If yours is like many accounting departments, you've got a cookbook — a process and procedure manual so well documented a key team member could take off for two weeks and anyone else can simply step in in their absence. The problem with "cookbooks" that document manual processes is that the interpretation and execution of them is by humans. With automation handling all the tedious tasks (those where errors can often occur), the cookbook (and the staff) can cover and execute the higher-level processes, not the menial ones. If mistakes happen, they are at a level that is quick and easy to catch and correct.
Just one less tedious task to do, leaving more time for higher-value work.
Moving accounting to the cloud
Finally, while the talent pool may be shrinking and expensive, it is also getting younger. The responsibility for making IT decisions — and running departments like accounting that rely on those decisions — is moving into younger hands. Unlike their predecessors, newer generations were raised with a computer and the cloud. This heightened acceptance of the cloud means that CIOs and CFOs and their leadership teams will now push for cloud-based solutions, including those for procure-to-pay, order-to-cash and other accounting-related functions.
Does this address the talent gap for CFOs? In a word, yes. Because much of the infrastructure tasks will be handled by cloud providers and Software-as-a-Service vendors, the need to hire more IT staff is reduced, allowing that team to do more with less, too. (Plus, if you do have to add accounting staff, it can't hurt when another department actually needs less staff.)
Accounting is "the last mile" for enterprise automation
The push to do "more with less" has been a corporate mantra for years. However, accomplishing this in an environment where it's scarcely possible to fill even the minimum team you need, that's an even taller order. It's never too late to learn from someone else's experience — both their mistakes and triumphs — when it comes to adopting automation technology. That's certainly true when it comes to accounting, which in my view has been one of the last areas in the enterprise to avail itself of the benefits of newer technologies.
Unlike Blockbuster, companies like Amazon go all in on technology and automation. The Amazon leadership team always talks about using technology to solve that "final mile" in providing their customers with the latest and greatest customer experience. Now it is time for the accounting team to embrace technology to automate functions within their domain and to leverage it to do more with less — so they and their companies aren't left behind.
