Enron. WorldCom. What comes to your mind when you think of these organizations? The use of variable interest entities and misleading classifications of assets to misstate earnings. Accounting practices can be done in a way that technically follows, but does not follow the intent of, current laws and regulations. This is how ‘creative accounting’ is defined, but this definition does a huge disservice to accountants and the accounting industry. Together, let’s redefine creative accounting as innovative practices in accounting processes that lead to more efficient and effective organizations.
Creative is not a bad word. In fact, it is through being creative, thinking outside the box, and engaging in rewarding change that an organization can grow and excel. This definition of creative doesn’t stop with the marketing department: We need to embrace this in our accounting departments as well! The accounts payable accountant who thought of uploading mass information into the accounting system and developed the method to doing so is creative. The accounting manager who heard the needs of the customer service department and adapted the way information is captured to produce better metrics is creative. The controller who leads the project on streamlining expense reporting with the use of technology is creative.
Over and over again, accountants refer to themselves as “not creative,” “process-oriented,” or “boring.” All good accountants are none of these things; their contributions are just not recognized for the true creative thought processes behind them. When we think creatively, we identify a problem that needs to be solved, come up with an idea to solve this issue, develop a game plan to accomplish this goal, and test and verify the solution. This is creativity at its best.
Through these creative process improvements, accountants are not only decreasing overall time spent by their organizations to complete required work, but increasing the bottom line by allowing for better decisions. Imagine for a moment, in a typical accounting process information is received monthly in formats that are not easily understood by departments in an organization. Instead, a creative accountant develops a chart of accounts that reflects the metrics their organization needs and links the accounting data in real time to an interactive dashboard, formatted into metrics and charts that turn the data into information leading to timely, well-informed decisions across the organization. A win for creative accounting.
After years of following the same steps to get the work done, this can be a difficult change in mindset. We are so used to plugging in the data and moving forward toward a deadline. Now is the time to take a step back and think creatively. Anytime you think to yourself, “This task is so repetitive” or “We could do this so much faster,” you have found an opportunity. Take a moment or two while you are in the task and imagine what completing this task would feel like in a perfect world. Getting from how things are now, to the best way they can be is where you can get creative. Take stock of your available resources and technology. Does anything sit with you as a promising possibility? Do some research. What are similar organizations doing and how can this be tailored to be made even better and more effective for your organization? The best change comes from innovation, and innovation comes from creativity.
Let’s all be creative accountants. Let’s drive change with innovative processes. Let’s remove the old stigma that being creative is bad and misleading. Instead, we will adopt the new definition: Creative accounting is the development and implementation of new ideas in the accounting space to produce more timely, reliable, and illuminating information for the appropriate stakeholders. Are you ready to start saying you are a “creative accountant?”
