The Future of Financial Administration Is Changing – from Bookkeeper to Consultant

The future is changing, and so is the way we work. Forces of change, such as digitalization, has already impacted and will impact various fields, including financial administration, in the coming years. According to the latest industry report from the Finnish Government, the market outlook for the financial administration sector is quite positive. Financial administration is not as sensitive to changes in the global economy and public sector demand as other industries, such as the technology sector and business services, which means that the financial administration sector will continue to thrive relatively steadily in the future.

Investing in digital solutions: From bookkeeper to consultant

In financial administration, many processes and tasks have already been automated, allowing employees more time for productive work. The nature of work will shift more towards consultancy, where professionals help clients develop their own businesses by providing information and service solutions in the field of financial administration. Basic services like recording numbers, receipts, and expenses are no longer sufficient, as clients expect refined information based on numbers that will benefit their business development.

This kind of operation requires new skills, including a focus on strategic business development in addition to domain-specific knowledge. Customers expect top-notch service and are well aware of the solutions and services on offer.

The report identified customer attitudes as a threat to the industry: financial administration is seen as a necessity rather than a tool for business management. While the industry has deep-rooted traditions, agile development with customers is still relatively rare. By investing in the customer experience, real competitive advantages can be gained, ensuring that the services offered align with customer needs and desires. The report highlights opportunities to expand and diversify advisory services. Specializing in specific customer groups is one way to stand out from the competition.

Read also about reshaping accounting industry from Journal of Accountancy

A Shortage of Professionals

As the industry evolves and processes become automated, some individuals may worry about the disappearance of their jobs. However, this concern is unfounded if they update their skills. According to a sector report published by the Ministry of Economic Affairs and Employment, the employment rate for accountants is very good, and there is a shortage of skilled professionals.

Future accountants should broaden their skillset to include consultancy for clients, the development and use of digital platforms, and selling their expertise to clients. As the industry modernizes, job opportunities will increase, and job roles will become more diversified.

Polarization in the financial administration sector in the future

In the coming years, the financial administration sector will experience polarization. Similar to what has occurred in the healthcare and social services sector, where a few major players buy out smaller and medium-sized businesses, a similar trend is happening in the financial administration sector. This is an opportune time for business acquisitions, as many accounting firms’ owners are nearing retirement, and successors may not be readily available within the immediate circle or among the company’s staff. Many entrepreneurs with long careers in the industry are willing to sell their businesses because the electronic systems required in the field represent a significant investment for small businesses.

Large accounting firm chains are acquiring not only smaller accounting firms but also other businesses that support their operations, such as software and billing companies. This way, larger firms can offer a wide range of services to their clients efficiently, while smaller firms can compete with personalized service.

Read also: How Accounting Firms can Improve productivity with Workflow Management System

Need assistance with the transition? Koho is here to help!