Technology has moved on and a whole host of new apps has been introduced, but accounting firms are exactly the same. They have sleek new websites that talk about technology but the work that they do has been unchanged for hundreds of years.
This lack of innovation is causing serious problems: Startups aren’t getting the support they need. Worse, young people today are no longer proud to call themselves accountants.
If this situation continues accounting will get more and more sh*t every year.
In this article I’ll explore what went wrong and why. Most importantly I’ll reveal why today we have a surprising new opportunity to do something about it.
Some people love accounting, but on the whole it’s not giving the next generation what they want in a career. It’s still geared up to provide a prestigious job for life, when what we really want is variety, impact and progression.
It’s crazy to think that over 50% of accountants under the age of 30 describe themselves as unhappy.
I’ve definitely felt this pain myself. Like the vast majority of accountants I started my career in a big firm. I was really excited to be there, but I quickly realised that the people a few years above me were desperate to get out.
The penny really dropped for me one night at a house party in Clapham: A girl I was chatting to promptly ended the conversation when I told her I was an auditor. Something is clearly going wrong here!
The lack of innovation has caused big problems for young people starting out their careers in accounting:
If the situation is getting so bad, why is nobody doing anything about it?
The uncomfortable truth is that some people really benefit from the status quo.
Let's look at the top of the industry: CFOs of FTSE 100 companies and partners at big audit firms both enjoy average compensation of around £1m per person. That’s over 40 times more than the typical graduate starting salary.
These individuals put in their time when they started out and over many years they rose to the top. Now they want to enjoy the rewards.
Why would they want to shake up the system that benefits them?
Membership bodies like the ACA, ACCA and CIMA are supposed to protect the interests of the profession. But in fact they’re funded by these big companies.
Today most young accountants start their careers in large organisations controlled by these powerful individuals: large accounting firms or companies with finance functions big enough to fund training programmes.
So is it any surprise that the exams created by the membership bodies are perfectly calibrated to working in a big firm?
Last year I got so frustrated with the representation I was getting from my membership body that I decided to resign my membership as a chartered accountant. Looking back I’m convinced that it was the right thing to do.
Why does nothing ever change?
Let’s recap - the most powerful people in accounting benefit from the status quo and they’re the ones who fund the membership bodies.
So will anything ever change?
I believe it just might.
There’s a tectonic shift taking place in the UK economy right now that’s changing the playing field: The growth of the startup sector.
Low interest rates, tax incentives and new technology have come together to create a perfect startup storm. Since 2015 the sector has grown by around 50% every year.
I can’t emphasise enough how massive this change is. To put it into perspective the startup and scale-up sector employs around five times as many people today as it did just six years ago.
These companies are fast becoming a really significant part of the overall economy, employing more and more people and utilising more and more capital.
This shift towards fast moving technology companies and away from the traditional UK employers will have a massive knock on effect on the accounting profession.
Startups need a totally different kind of finance support, and traditional accounting firms can’t give it to them. Accounting firms are geared up to provide tax and compliance services but these startups really need systems to drive growth.
I learned this the hard way myself on my first day working in a startup. After getting promoted at PwC and passing all the accounting exams I thought I knew it all. Then the founder of a marketplace business asked me to design a process that would record and collect thousands of payments across 15 different territories. I literally had no idea where to start.
There’s something wrong with a profession where you can do 15 exams and three years of training and still not be ready to help a growing business.
So, just like young accountants, startups too are feeling totally let down by the lack of innovation in accounting.
Startups don’t need accounting, they need FinOps.
The growth of startups is a phenomenal opportunity. Just by working in a startup you instantly get more variety of work and more potential for personal impact than you get in a larger organisation. This is exactly what young people are looking for in a career today.
More than that, every startup we help using FinOps helps us transform the image of accounting. Right now the public perception of accountants is that of boring men in grey suits. We now have an opportunity to change that.
Every startup we support means that we can:
So it’s a symbiotic relationship. FinOps is facilitating the growth of startups, and in return startups are helping us bring about our FinOps vision. The more we support their growth the faster the wheel turns.
Changes like this don’t come along every day. This is a unique, once in a lifetime opportunity to change a sector for the better.
But it won’t happen by itself. If accountants are allowed to continue doing the things they’ve always done this opportunity will pass us by. Startups will continue to struggle and the best people will leave the accounting profession.
If we get it right we can totally transform not just our sector, but the wider economy too.
I see a future where most young accountants don’t start their career in large organisations, learning how accounting was done in the past.
Instead I see them starting their career the way they mean to carry on: working with innovative companies where they can truly make a difference. The training they receive must equip them with the skills they need for the future, not the past.
Quantico’s operating model is designed to make this option a reality.
Each member of our team splits their time between four, five or more startups. That gives young accountants the opportunities they need for fulfilment at work and it gives startups access to more talent, sooner.
Everything we do is geared towards making this change happen. We’ve made a big start but we still have a long way to go.
Will you join us?