Your digital quotient
News, Student Accountant – March 2017
Insurance / Legal / Corporate
The successful professional accountant must have digital skills, but what exactly does this entail? In Student Accountant, RGL Partner Catherine Rawlin talks about digital quotient and the skills needed to be a successful professional accountant.
As appeared in Student Accountant, March 2017.
Digital quotient is one of the seven skill areas recently identified by ACCA as being essential to the evolving profession. It is defined as the awareness of existing and emerging applications, software and digital tools that are available to you, and the appropriate use of them.
Nowadays it would be hard to find someone who is not digitally aware, at least to some extent. We are all familiar with digital tools such as Twitter, Facebook, Google and Skype, and most of us would consider ourselves to be ‘digital natives’, confidently using online resources, smart devices and apps in the classroom, at home and at work.
However, the digital capabilities expected of a modern accountant are quite specific and go beyond what you may have learnt before entering the profession. We explain what it means to be a digitally savvy accountant, and what level of digital literacy accountancy employers expect their new recruits to have.
‘Accountants have always had to keep up with the latest technology but never have we lived in a time when the development of new technologies is completely changing the face of the sector,’ says Nadim Choudhury, head of careers and employability at the London Institute of Banking and Finance.
The cloud has had a huge transformative impact on the profession and many, particularly smaller practices now work almost exclusively in the cloud.
‘Cloud accounting software is the future of bookkeeping and accounting,’ says Simon Young, managing partner at Aysgarth Accountants. ‘There are loads of products out there and while no accountant can be an expert in them all, they should have a working knowledge of a few.’
Young explains other aspects of working in the cloud and how it has transformed his practice: ‘We don’t send out paper accounts or tax returns for clients to sign and return. We place them all securely into the cloud and clients then log on, review them and click approve. We then file the accounts and tax returns online – all of this takes minutes as opposed to the days or weeks it used to. Of course, all this is done after a meeting or a telephone call to discuss the figures.’
They also scan all the correspondence that comes in and then shred it.
‘Our digital filing cabinet has a long way to go before it’s full; as for our physical filing cabinets – once they were not enough and now they are rather empty,’ says Young.
A modern accountancy practice is very different from the old-fashioned firm of yesteryear, which used one clunky off-line software package in addition to ubiquitous Excel spreadsheets.
‘Before widespread digitalisation we used one or two pieces of software, now that number exceeds 10,’ says Kathryn Moran, partner at accountancy firm haysmacintyre.
New smart software helps accountants with real-time reporting and allows them to mine data necessary to optimise business decision making.
‘Analytics technologies allow us to extract and process huge volumes of data from both outside and inside an organisation. This provides us with new and better insights into our clients’ businesses, particularly around areas such as culture which were once thought to be impossible to measure,’ says Hywel Ball, EY’s head of assurance for the UK and Ireland.
‘It’s vital that we are keeping pace with these changes and that we have the right skills to incorporate new tools and techniques into our roles. This is particularly important given the pace of change, with new technologies such as Blockchain rapidly moving from theory to reality.’
Technologies such as robotics and artificial intelligence are quickly moving from theory to reality too.
‘While you may not see R2-D2 or Johnny Five walking around the office, robotics is increasingly being used to help with routine, repetitive manual processes associated with accounting,’ says Ball.
Gilly Lord is PwC's head of audit strategy and transformation. She adds: ‘Critically, we will need to learn how to work with artificially intelligent machines to make ourselves more valuable.’
Clients drive the agenda
Accountants must continue developing their digital skills because this is what their clients want and need.
‘Clients, particularly those in the tech industry, expect us to be digitally adept. They want to know we speak their language,’ says Moran.
Lord adds: ‘Our clients are seeing their business models being disrupted by emerging technologies. They need to rethink the way that they are creating value, and we have to rethink the way we measure and report that value.’
Digital skills are necessary to be able to extract the most relevant information from the vast volumes of data that clients often generate.
‘We also need to be able to analyse that important data in an efficient, logical and commercially-minded way and to be able to develop a work product that simplifies it and that makes sense to a non-financially minded reader or user of the information,’ says Catherine Rawlin, partner at specialist accounting practice RGL Forensics.
Spreadsheets still have their place in accountancy firms, they are just getting more complex.
‘It’s an increasingly important skill to be able to build a financial model that presents complex calculations in an easily-digestible way,’ says Rawlin.
‘This could mean you will need to produce a complicated spreadsheet with a simple user interface that enables the client to understand the relative weight of different variables and to see what impact changing any one of the variables would have. To do this work well requires someone to have a mind that is comfortable with data and logic.’
What employers want
With time, you will need to become an accomplished user of specialist financial software and of business intelligence and data analytics. When applying for an entry-level role, however, you usually just need to prove you have the basic digital skills.
‘Having the basic working experience of emails, Excel and Word is a must; anything more specialist will be taught,’ says Young.
You also need to prove you have a digital mindset and that you are keeping up to date with advancements in relevant technology.
‘We recruit students from a wide range of disciplines and backgrounds,’ says Lord.
‘Some join us after university, and some straight from school. The digital skills that we need aren't always embedded into school and university curriculums, but that’s not a problem as long as our recruits are intellectually curious about what the digital age can offer. They need to have an appetite and aptitude for learning and be excited about harnessing the capabilities of digital working.’
Candidates should also be aware of the new business risks that have arisen as a result of digitisation.
‘Given that we often deal with sensitive information and cyber-security has become such a serious risk, we look for candidates that are astute and naturally sceptical. We then train them in practising security awareness around data and integrity,’ says Moran.
ACCA has developed a unique model showing the seven skills and qualities needed from the successful professional accountant.