Disclaimer: This article was commissioned by CPA Australia.
Of all the careers in Singapore, accounting is arguably one of the most recommended by our baby-boomer parents and some of our older Gen X siblings.
Ah yes, the proverbial iron rice bowl. The term refers to job security, as well as steady income and benefits. Or as they’ll put it in English, a job for life.
Some even go as far as to propose accountancy as a fall-back career if you have zero interest in anything.
“If you don’t know what to do, just go and do accountancy. Sure can find a job one!”
“Even if the company closes down, you’ll be the last to go!”
But the truth is accounting has rapidly evolved since our parent’s era. And is about to change even further in the next 5-10 years.
We spoke to several accountants and industry experts, and dug through several nerdy white papers to see how the average millennial and Gen Z person will be affected.
Short answer: Accounting rice bowls will still exist, but in shorter supply
Accounting is actually a pretty broad field; spanning disciplines such as bookkeeping, audit, taxation, financial reporting and compliance.
Many people think that accounting is just bookkeeping, which is the recording and organising of financial transactions – collecting receipts, invoices, petty cash reimbursements, data entry etc.
In Singapore, bookkeeping roles are done by Accounts Assistants/Executives typically earning $1,800 – $2,200 a month.
In the past, it would have been possible for someone to work decades with just a diploma as an accounts executive. My mom was an accounts assistant for 40 years, armed with just a couple of PSLE passes.
Unfortunately, that isn’t the reality today. Bookkeeping jobs are at threat from two things: automation and ‘shared services’.
According to one study, a third of job roles in Singapore’s finance industry will be impacted by automation in the next three – five years. The result would be fewer workers, and the possible displacement of job roles.
This might seem far-fetched, but it’s closer than you think.
You may have noticed most lean startups would be using some form of cloud account software like Xero. Bigger corporations would use something like SAP, Oracle or SAGE.
These software effectively replace the need for entry level accounting staff.
Take filing claims via Xero for example: It used to be that bookkeepers had to sit down with all the petty cash claims, key them manually in to microsoft excel, then print out a report.
These days, the staff making the claim spends a few minutes making the claim instead. The bookkeeper’s job has been cut up and ‘outsourced’ within the company.
Similarly, tech like optical character recognition (OCR) means staff can use software like Deem to automatically digitise hard copy receipts. The jobs that involve scanning receipts and meddling with glue and printers? They’re gone too. (PS: You can scan documents on your iPhone with the notes app)
Of course, not all companies are ready to embrace automation – in the meantime, they’re pursuing something called ‘Shared Services.’
This is a euphemism for businesses moving their accounting capabilities (as well as IT and HR) out of the entire company; sometimes in back offices located in less developed countries with cheaper labour.
The main goal here is economies of scale. You can potentially have savings of 20% – 65% in terms of cost with shared services.
For example, a team of five account assistants paid $2.5k each will cost you $12,500 a month and can be replaced by a centre charging between $3,000 – $4,000 monthly.
The cruel reality
If you read articles by accounting institutions out there, they’ll confidently say that accountants will never be obsolete; instead automation and shared services will make their lives easier. At the same time, new jobs will be created to replace the old ones.
Accountancy will survive as a profession; but not all accountancy jobs will survive.
- Automation and shared services will make the lives of some people easier, but just as seen in other industries it will create job losses for others, especially at the lower levels.
- Yes, there will be new jobs created because of AI and automation – but not everyone will be able to master the new skills to do these jobs.
One Assistant Accountant we interviewed said, “the older generation of accountants might have the knowledge, but the work environment has become so fast paced that not all of them will be able to catch up.”
Another Accountant in a local SME shared similar sentiments about the challenges faced by these workers.
“By their 40s, they’ll most likely have some financial commitments which make it harder to upskill. They’d also be too far from retirement to coast or depend on their bosses for goodwill employment.
Some might opt to find work in slower evolving SMEs where innovation isn’t a priority, but this is only a false and temporary haven. It is unlikely organisations will preserve their jobs for the next 10-15 years; it is as the saying goes – business is rarely a charity.”
If you’re not in bookkeeping or are considered ‘higher value staff’, it can be tempting to shrug off these changes as they don’t concern you.
After all, the people most affected by both automation and shared services are likely to be less qualified than you.
That said, consider that:
- New software is constantly being developed, who knows what it can do in the future
- Shared services are always looking to expand their services
With that in mind, here’s how accounting professionals can respond:
- Stay relevant with hard skills
If you can’t beat them, join them. Master the tech that is responsible for making repetitive jobs obsolete. This means going into fields such as cloud computing, blockchain, data analysis, and robotic process automation (RPA).
You can also jump into the new accountancy related fields that are developing such as forensic accounting, valuation or sustainability accounting.
- Stay relevant with soft skills
Since automation threatens rule-based and repetitive tasks, developing your soft skills will actually bring you quite a long way.
Automation can crunch the numbers quickly, yes. But machines can’t interpret/analyse them and use them to build a persuasive case for a business decision.
Machines also cannot put your clients at ease via good communication, build meaningful connections and win new business. Not yet at least.
With that in mind, it’s also useful for you to expand your lateral thinking to include creativity.
Often, this is a skill that comes with understanding other aspects of the business such as marketing, sustainability, sales etc.
TL;DR, you’ll need to practice continuous learning.
You assume the iron rice bowl at your own peril
We’d be first to say that accounting is more stable than most industries, but being known as a ‘iron rice bowl’ industry might lull someone into a false sense of security.
Because of this reputation, it’s all too easy for people to become complacent, or even worse, attract people who assume that jobs will always be there, regardless of the value they can provide.
If too many people blindly join the industry without knowing what are the skills needed to stand out, then there are going to be a lot of misaligned expectations.
You can imagine it like this: the iron rice bowl might still be indestructible, but the number of iron rice bowls will be shrinking in the future.
The real question is: Are you ready to seize yours?
Stay woke, salaryman.
About our sponsor, CPA Australia
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CPA is a course that can be undertaken part time while having a full time job, so it’s not as financially taxing compared to a full time degree or masters. You will be provided with course materials, online learning platforms and even study groups to help you with learning. The best part is, you can learn anywhere, and at your own pace,
Finally, it’s recognised internationally with 165,000 members globally in over 150 countries, supported by 19 offices worldwide, definitely a plus if you want to work overseas, particularly in the Asia Pacific region.
Full disclosure: TWS interviewed five accounting professionals writing this article; two of which were provided to us by CPA Australia. Their roles ranged from mid to junior roles in both SMEs, the Big 4 and MNCs.